There will be no Medicare Advantage plans in 181 counties in 2027, up from 67 in 2026
Medicare Advantage controls more than half of the overall Medicare market of about 69.6 million subscribers.
Millions of older adults will need to find new healthcare coverage for 2027 after several insurers exited markets and cut back on their offerings to protect profit margins.
Medicare's open-enrollment period will begin Oct. 15 and run through Dec. 7. The average Medicare beneficiary can choose from among 35 plans in 2027, compared with 39 plans in 2026, according to healthcare policy and research firm KFF.
"Across most states, the average beneficiary will have fewer Medicare Advantage plan options in 2026 compared to 2027," KFF said.
During open-enrollment periods, eligible adults can switch from traditional Medicare to a private Medicare Advantage plan, change from one Medicare Advantage plan to another, and join or change a Medicare Part D prescription-drug plan. These changes start on Jan. 1.
Medicare Advantage is the private-plan alternative to traditional Medicare. Medicare Advantage, which controls more than half of the overall Medicare market of about 69.6 million subscribers, offers extra benefits such as vision and dental coverage and caps annual out-of-pocket costs, but with a limited choice of doctors and extra requirements for specialist referrals.
UnitedHealth Group, Humana and CVS Health subsidiary Aetna are among those exiting markets or tweaking their coverage offerings as they try to protect profit margins instead of pushing for growth in new subscribers, analysts said.
At least 3.8 million enrollees will be forced to find new coverage for 2027, and there will be no Medicare Advantage plans in 181 counties - up from 67 this year, according to a report by Modern Healthcare.
"The modest decrease in the number of Medicare Advantage plans available to the average beneficiary means that some Medicare beneficiaries will find that their current coverage is no longer an option for next year," KFF said. "In most cases, these beneficiaries live in counties where they will continue to have robust Medicare Advantage plan options available for 2027, as well as traditional Medicare."
Still, there are yearly changes to Medicare Advantage plan benefits and costs, including the scope and generosity of extra benefits, out-of-pocket limits, rules for using covered services such as referral requirements and prior authorization, and provider networks.
Beneficiaries should read their annual notice of change documents from their insurers to find out exactly what has changed for 2027 and what their new costs will be.
The changes for 2027, however, are seen as less dramatic than 2026, when as much as 10% of the Medicare Advantage market was forced to find new plans as insurance companies exited markets, according to an analysis published in February in JAMA, a medical journal published by the American Medical Association. In 12 states, more than 20% of Medicare Advantage enrollees lost their plans in 2026. In Vermont, 92% of Medicare Advantage enrollees were dumped from plans.
"Insurers have made plenty of statements indicating that they are pulling back in MA for 2027. And that's not surprising. Policymakers have taken some steps in recent years to rein in payments to MA plans (which have consistently been far above what the law intends), which one would expect to reduce plan benefits to some degree," Matthew Fiedler, interim director of the Center on Health Policy at the Brookings Institution, said in an emailed comment to MarketWatch. "It also appears that some insurers misjudged utilization trends or other aspects of the market environment."
"At the same time, this is likely to remain a fairly robust market. Almost everywhere in the U.S., Medicare beneficiaries are likely to have a choice of multiple MA plans, and those plans are likely to generally offer benefits that are, at least in some ways, richer than traditional Medicare," Fiedler said.
The robustness of the Medicare Advantage market reflects that the federal government continues to pay Medicare Advantage plans more than if those subscribers were in traditional Medicare, Fiedler said.
The federal government pays Medicare Advantage plans an estimated 14% more per enrollee than it would spend if those same beneficiaries were in traditional Medicare. That overpayment costs about $76 billion in additional federal spending a year, according to the Medicare Payment Advisory Commission (MedPAC) March 2026 report to Congress.
"Paying MA plans more is likely an inefficient way of delivering better benefits to beneficiaries," Fiedler said. "But I do think it's important to keep whatever happens this year in perspective."
These plans have faced questions about the quality of coverage they provide to older adults. On Thursday, the U.S. announced the latest ratings, which are used by consumers to shop for plans and the government to decide if the insurers that offer higher quality plans deserve extra payments.
Humana said 95% of its MA plans have four stars on a five-star ranking; its stock $(HUM)$ soared 15% in premarket trading on Friday. Alignment Health and Centene had the lowest-performing plans, according to the consulting firm Veda Partners.
CVS Health (CVS), Elevance $(ELV)$ and UnitedHealth Group (UNH) all reported that enrollment in plans with at least four stars dropped between 15% and 17%.
Jaimy Lee contributed to this article
-Jessica Hall