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Insurers Slash Medicare Plans, Limiting Choices
1 Oct
Summary
- Insurers to offer fewer Medicare Advantage plans with limited provider access.
- Companies cite funding pressures and rising healthcare costs.
- Government payments are decreasing while utilization is increasing.
US health insurers, including UnitedHealthcare and CVS Health's Aetna, will be offering fewer Medicare Advantage plans with limited provider access starting in 2027. This decision stems from significant financial pressures, such as rising medical and drug costs, and increased utilization of services. Insurers have stated that government reimbursement rates have not kept pace with these escalating expenses.
UnitedHealthcare will exit locations with a higher proportion of preferred provider organizations (PPOs), which offer more flexibility but are costlier to operate. Aetna is expanding health maintenance organization (HMO) plans, which typically limit coverage to a smaller network of providers. Rival Humana will reduce its plan offerings to over 80% of US counties. These changes are expected to impact millions of enrollees, with Aetna potentially shedding nearly a million members as it withdraws from some states.
The Centers for Medicare and Medicaid Services anticipates a more than 16% decrease in Medicare Advantage premiums for the upcoming year. This move by insurers comes as the government has been reducing payments to companies operating these plans since 2024 to curb spending. The largest Medicare Advantage businesses are managed by UnitedHealthcare, followed by Humana and Aetna.
