Medicare Advantage plans cut by UnitedHealth and Humana, hitting one million seniors

UnitedHealth Group and Humana are dropping Medicare Advantage policies covering roughly one million older Americans ahead of the 2027 plan year, marking a sharp retreat from unprofitable regions as healthcare costs climb.

A UnitedHealth spokesperson confirmed that the company is discontinuing plans that hold about 390,000 members. Humana is trimming even further, with cancellations set to touch around 600,000 policyholders. Wall Street analysts examining newly released government figures found that Centene and CVS Health’s Aetna are also paring back their footprints.

Letters warning members that their policies will not renew are dated 2 October. Those affected have from 15 October until 31 December to pick a replacement Medicare Advantage policy that takes effect on 1 January 2027. Anyone who takes no action will fall back onto standard government Medicare, though they will retain a special enrolment window through 28 February 2027 to switch back into an Advantage plan.

Why insurers are withdrawing

Private insurers have faced a squeeze on margins after years of expansion. Older patients are using hospital services and specialist care in higher numbers, prescription drug spending has accelerated, and federal payments have tightened.

"We can't ignore the realities facing the healthcare system," UnitedHealthcare President Bobby Hunter said. "Funding pressures, rising medical costs, rising drug costs, and increased utilization are affecting every part of healthcare."

The Centers for Medicare & Medicaid Services finalised an average payment rate increase of 2.48% for 2027, adding more than $13 billion in funding. While that beat a near-flat 0.09% bump floated in January, health plans argue the adjustments still fail to track actual medical inflation. Washington has been dialing back payment formulas to Medicare Advantage operators since 2024.

Narrower networks replace broad cover

Where carriers remain, they are overhauling what they sell. Insurers are moving away from preferred provider organisation (PPO) products, which allow patients to consult out-of-network doctors at higher operating cost to the underwriter.

Hunter said UnitedHealth is reducing its exposure in markets dominated by PPO options. Aetna is expanding its health maintenance organisation (HMO) roster instead, keeping patients inside strict, cheaper networks. Humana will trim its presence from 85% of US counties to just over 80%.

Government projections compiled from industry submissions estimate total Medicare Advantage enrolment will slip to approximately 34 million people in 2027 — a drop of roughly 6% from current levels.