Humana and UnitedHealthcare Cut Medicare Advantage Plans for Over 1 Million Seniors

Two of the biggest names in Medicare Advantage are shrinking their footprint, and more than a million seniors are caught in the middle.

Humana confirmed last month it's exiting a batch of Medicare Advantage plans for 2027, forcing roughly 500,000 seniors to shop for new coverage, according to Yahoo Finance. Humana also cut three states and 194 counties last year, affecting about 500,000 members. Humana CFO Celeste Mellet pointed to high costs and thin profit margins in certain markets as the reason.

UnitedHealthcare isn't sitting this one out either. The company dropped Medicare Advantage plans covering more than 600,000 seniors, according to Yahoo Finance. Between Humana and UnitedHealth Group, the two companies account for nearly half of all Medicare Advantage enrollees nationwide, according to KFF research cited by Yahoo Finance.

Some states are getting hit especially hard. KFF found that in Wyoming, South Dakota, New Hampshire, North Dakota, and Vermont, 60% or more of Medicare Advantage enrollees faced a terminated plan this year.

Why insurers say they have no choice

The Centers for Medicare & Medicaid Services finalized a 2.48% average payment increase for Medicare Advantage insurers in 2027, according to FinanceBuzz. Factor in risk-score adjustments for things like population changes, and the real bump is closer to 4.98%. Either way, that's over $13 billion in added federal spending.

Insurance executives say it's not enough. Medical costs and utilization are rising faster than that, they argue, and something has to give.

That's a legitimate business problem, not a fake one. Medicare Advantage plans are privately run, and if the cost of care outpaces what the government pays them, insurers either eat the loss, raise costs elsewhere, or walk away from unprofitable markets. That's how private insurance works — nobody's obligated to run a business at a loss forever.

But there's a real critique on the other side too. David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy, told Yahoo Finance that "churning of the market by plans pulling out of certain areas in order to maximize profit and minimize losses reflects the challenges of a healthcare system that is overly reliant on private, for-profit insurance companies." He argues plan sponsors are making decisions "more attuned to the needs of shareholders than plan enrollees," leaving seniors scrambling every year to figure out new coverage.

Both things can be true. Insurers face genuine cost pressure. And a system where profit margins determine whether a 78-year-old in rural Wyoming keeps her dental coverage is going to produce exactly this kind of churn, year after year.

What's actually getting cut

Medicare Advantage plans have ballooned in popularity because they bundle in perks Original Medicare doesn't cover: dental, vision, hearing aids, gym memberships, meal delivery, transportation. Enrollment has grown from 24 million people six years ago to more than 35 million now, about 55% of everyone eligible for Medicare, according to Yahoo Finance.

That growth is exactly what's straining the system. More enrollees using more services means higher costs for insurers, and insurers are responding by trimming the extras that made these plans attractive in the first place.

FinanceBuzz reports that 2027 plans may come with higher annual benefit caps, less comprehensive dental coverage, and cuts to routine eye exams, hearing aids, transportation, and in-home support. Humana hasn't finalized its specific cuts, but gym memberships, enhanced dental and vision benefits, and meal delivery or grocery allowances could all be affected. None of this is locked in yet. It depends on how competitive each local market is.

What Humana says, and what seniors should actually do

Humana insists it's not abandoning Medicare Advantage as a business. According to MARCA, the company reiterated during its second-quarter earnings update that it still expects Medicare Advantage membership to grow about 2.5% in 2026, even while trimming unprofitable plans and markets. Executives described it as a market-by-market evaluation, not a nationwide pullback, and said the goal is concentrating resources on plans that deliver "stronger value to members."

Nobody enrolled in a discontinued plan is getting dropped from health insurance overnight. Affected Humana members will get official notice before the 2027 coverage year starts, according to MARCA, and everyone will have options during the Annual Election Period, which runs October 15 through December 7. Seniors in that situation can pick another Humana Medicare Advantage plan if one's available in their county, switch insurers, or go back to Original Medicare and layer on a Part D drug plan and possibly a Medigap supplement.

The practical move right now: watch your mailbox for the Annual Notice of Change. That document will spell out exactly what's changing in your specific plan, and it's the only way to know for sure whether you're one of the seniors who needs to shop around this fall. CMS hasn't finalized 2027 plan benefit details industry-wide, so the full scope of cuts, including whatever Humana ultimately decides on gym and dental benefits, won't be public until insurers file their final plans later this year.