UnitedHealth and Humana to cut Medicare Advantage plans for one million seniors
Rising medical costs and tighter federal funding push major US health insurers to abandon unprofitable counties and shrink doctor networks.
UnitedHealth Group and Humana are dropping Medicare Advantage plans that cover nearly one million older Americans, scaling back their operations ahead of 2027 to protect margins against surging healthcare expenses.
A UnitedHealth spokesperson confirmed that approximately 390,000 members are enrolled in plans slated for discontinuation. Humana's withdrawal is larger still, eliminating coverage for around 600,000 enrollees. Competitors are moving in the same direction: Wall Street analysts reviewing federal data noted that CVS Health's Aetna and Centene are also trimming their Medicare Advantage footprint.
What happens to affected members
UnitedHealthcare will post non-renewal notices dated 2 October to affected policyholders. Those members have between 15 October and 31 December to pick an alternative Medicare Advantage plan for coverage starting 1 January 2027.
Anyone who takes no action will automatically revert to traditional, government-run Medicare on New Year's Day. Those who land back in fee-for-service Medicare will get an extended special election period running through 28 February 2027 to select a private plan if they prefer.
Shift away from broader networks
Alongside outright market exits, insurers are overhauling the types of plans they sell. Companies are retreating from Preferred Provider Organisation (PPO) offerings, which allow members to see doctors outside an insurer's immediate network but carry substantially higher operating overheads.
"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."
In response, carriers are steering customers toward tighter, lower-cost coverage. Aetna said it is expanding its Health Maintenance Organisation (HMO) lineup, which restricts patients to designated provider networks. Humana is curtailing its physical presence: its coverage will reach just over 80% of US counties in 2027, down from 85% this year.
Why insurers are retreating
The retrenchment follows protracted tension between private insurers and Washington over reimbursement rates. The Centers for Medicare & Medicaid Services finalised an average payment rate increase of 2.48% for 2027, injecting over $13 billion in additional funding. While that marked an upgrade from a 0.09% proposal floated in January, health plans argue it still lags behind double-digit cost inflation and heightened demand for operations and prescription medicines.
Federal payments have faced sustained downward pressure since 2024. Government projections based on insurer filings indicate total nationwide Medicare Advantage enrolment will fall by roughly 6% to 34 million people in 2027 as insurers pull out of regions where margins have vanished.
Key numbers
| What | Figure | Source |
|---|---|---|
| Humana plan cuts | Around 600,000 enrollees | Humana |
| UnitedHealth plan cuts | Approximately 390,000 members | UnitedHealth Group spokesperson |
| CMS 2027 rate increase | 2.48% (over $13 billion) | Centers for Medicare & Medicaid Services |
| Projected 2027 enrolment | 34 million (down 6%) | US Government projections |
| Humana county coverage | Contracting from 85% to just over 80% | Humana |
Questions readers are asking
When must affected seniors select a new Medicare plan?
Enrollees can pick a new Medicare Advantage plan during open enrolment between 15 October and 31 December. Those who miss the window revert to original Medicare and will have until 28 February 2027 to choose a private plan.
Why are insurers dropping Medicare Advantage plans?
Insurers cite rising medical and prescription drug costs, higher patient utilisation, and federal reimbursement increases that have not kept pace with overall healthcare inflation.
In this story
| Name | Role in the story |
|---|---|
| UnitedHealth Group | Discontinuing plans affecting roughly 390,000 Medicare Advantage members. |
| Humana | Cutting plans covering around 600,000 enrollees and shrinking county footprint. |
