Rising health care costs, paired with minimal rate growth for Medicare Advantage plans, could accelerate insurer withdrawals from states and counties nationwide, potentially disrupting coverage options for millions of older Americans.
Several of the nation’s largest insurers — including UnitedHealthcare, Aetna, Elevance Health and Humana — have already scaled back Medicare Advantage offerings in 2026 after years of geographic expansion, according to a report published Monday by Forbes. The decisions have potential impacts on senior homeowners who may need additional funds to make ends meet in retirement.
UnitedHealthcare provides a clear example of the trend.
The insurer exited some markets in 2025 and expects Medicare Advantage enrollment to shrink by more than 1.1 million older adults, the company said last week in its full-year 2025 earnings report.
When insurers leave a market, enrollees are forced to select new plans that may not include the same doctors, hospitals or benefit packages, Forbes reported.
Last week, the Centers for Medicare & Medicaid Services, led by Dr. Mehmet Oz, said it plans to increase payments to insurers by 0.09% — far below prior industry estimates.
Health insurance lobbyists warned that flat funding could translate into fewer benefits for seniors.
“Health plans welcome reforms to strengthen Medicare Advantage,” said Chris Bond, spokesman for America’s Health Insurance Plans. “However, flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors’ coverage. If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026.”
UnitedHealthcare has felt the pressure acutely.
Its full-year adjusted 2025 medical care ratio — the share of premium revenue spent on medical costs — rose to 88.9%, up from 85.5% in 2024. The ratio topped 91% in the fourth quarter alone.
“As part of our efforts to address elevated trend and funding cuts, we planned for some Medicare Advantage contraction in 2026,” UnitedHealthcare CEO Tim Noel told analysts. “We now expect UHC Medicare Advantage contraction will be in the range of 1.3 million to 1.4 million members for the full-year, including group, individual and (dual-eligible special needs plans).”
Elevance Health, the nation’s second-largest insurer, reported similar trends. Its benefit expense ratio reached 93.5% in the fourth quarter, up steadily from earlier in the year, according to the Forbes report.
Insurers will not disclose their 2027 Medicare Advantage market participation until this fall.