Major US Insurers Scale Back Medicare Advantage Plans for 2026 Amid Rising Costs and Reimbursement Cuts

America's largest health insurers are pulling back sharply from the Medicare Advantage market for 2026, creating significant disruption for millions of seniors enrolled in the privatized Medicare program. UnitedHealthcare, Humana, and CVS Health's Aetna have all reduced the number of states and counties they serve, following through on earlier commitments to exit underperforming geographies in an effort to restore profit margins.

The scale of the retreat is substantial. UnitedHealthcare, the nation's largest Medicare Advantage carrier, is exiting plans that collectively serve roughly 600,000 members — primarily in less-managed PPO products — and is offering plans in one fewer state and 109 fewer counties. Humana is offering plans in three fewer states and 194 fewer counties, while Aetna is exiting one state and 100 counties. The cutbacks are concentrated in rural areas where operational efficiencies are harder to achieve.

The primary drivers are financial. The Centers for Medicare and Medicaid Services (CMS) has been scaling back Medicare Advantage reimbursement payments to insurers since 2024 to reduce federal spending. At the same time, insurers face rising medical costs — UnitedHealth executives noted higher-than-expected costs in outpatient care and expensive emergency room visits, along with growing prescription drug costs from cancer, obesity, and gene therapy treatments. UnitedHealth leaders projected Medicare Advantage costs would rise about 10% in 2026, with the industry facing its steepest benefit cost increases in over a decade.

For enrollees, the changes go beyond plan exits. While CMS projects the average monthly Medicare Advantage premium will fall, an analysis of CMS data by Morgan Stanley found that for the general-enrollment population — the bulk of the program — average monthly premiums weighted by enrollment are actually rising by $2.84, or nearly 22%, compared to 2025. Insurers are also raising deductibles and out-of-pocket maximums and trimming supplemental benefits: Aetna, Elevance, and UnitedHealthcare cut allowances for over-the-counter health and wellness items. With UnitedHealthcare, Humana, Aetna, Elevance, Kaiser, and Centene together covering nearly three-quarters of the Medicare Advantage population, hundreds of thousands of seniors — potentially over one million — may need to shop for new plans, while smaller regional carriers see an opportunity to gain members.