For the first time in nearly two decades, enrollment in Medicare Advantage is expected to decline, according to new projections from the Centers for Medicare & Medicaid Services (CMS). The agency forecasts that enrollment will drop to 34 million in 2025 from nearly 35 million this year, as health insurers prioritize profitability over growth by reducing benefits and exiting certain markets.
This shift comes after years of rapid expansion in the private Medicare market. Now, seniors preparing for the upcoming open enrollment period will face a landscape of higher costs, more restrictive plans, and significant changes to how insurance brokers are compensated, making it crucial for them to carefully review their options for 2026.
Key Takeaways
- Enrollment Decline: Medicare Advantage enrollment is projected to fall to 34 million in 2025, the first decrease in almost 20 years.
- Insurer Strategy Shift: Health insurance companies are focusing on profitability by cutting benefits, increasing out-of-pocket costs, and discontinuing unprofitable plans.
- Changes for Seniors: Enrollees may see higher premiums and deductibles for 2026, particularly for popular Health Maintenance Organization (HMO) plans.
- Broker Commission Cuts: Insurers are eliminating commissions on 15% to 20% of plans, potentially limiting the options presented to seniors by advisors.
Insurers Pivot from Growth to Profitability
After more than a decade of aggressive expansion, health insurers are now pulling back from the Medicare Advantage market. This change is driven by shrinking profit margins over the last two years, a result of members using more medical services than anticipated and new government regulations that have pressured reimbursement rates.
In response, major carriers are discontinuing less profitable plans and, in some cases, leaving entire regional markets. The primary goal for 2025 and 2026 is no longer to attract the maximum number of new members but to ensure the financial stability of their existing plans.
"We’re seeing most health insurance carriers — most Medicare Advantage carriers — be much more focused on profitability relative to growth this year," said Cobi Blumenfeld-Gantz, founder and CEO of the brokerage Chapter. "Some of the plan benefits will not be as robust as they have been in the past."
Despite the projected downturn, CMS stated it “anticipates that enrollment in [Medicare Advantage] in 2026 will be more robust than the plans’ projections,” suggesting the market will remain stable overall.
What Plan Changes Mean for Seniors
As the open enrollment period for 2026 begins, seniors will likely notice significant changes in the plans available to them. While CMS projects a slight decrease in the average monthly premium across all plans to $14, this figure can be misleading. Many of the largest insurers are expected to raise prices.
Understanding HMO Plans
Health Maintenance Organization (HMO) plans are a major focus for insurers in 2026. These plans typically require members to use doctors, hospitals, and specialists within a specific network. While often offering lower premiums, they provide less flexibility than other plan types, such as Preferred Provider Organizations (PPOs).
Analysts from Evercore ISI have observed that major players like UnitedHealthcare, Aetna, Elevance, and Humana are adjusting their offerings to improve margins. This involves more than just premium hikes.
Higher Costs and Reduced Benefits
According to an Evercore ISI research note, insurers are taking several actions to bolster their finances. “Our preliminary analysis shows that payors took action to improve margins through benefit reductions including higher premiums, deductibles and out-of-pocket maximum,” wrote analyst Elizabeth Anderson.
These changes are particularly evident in HMO plans, which are seeing a “more sizable cut to benefits.” Even though insurers are raising deductibles on these plans, many will still be offered with a $0 premium. Experts say carriers are reluctant to add a premium to these popular plans and will cut other benefits first.
“They’re more likely to cut benefits long before they would add a premium to a $0 product. But the products that already have premiums today … are likely to see increases,” explained Brooks Conway, a principal at the consulting firm Oliver Wyman.
The Hidden Impact of Broker Commissions
One of the most significant but least visible changes affecting seniors is how insurers are compensating insurance brokers. To steer enrollment toward more profitable plans, carriers often offer higher commission rates on those specific products.
For the 2026 enrollment season, insurers are taking the dramatic step of eliminating broker commissions on a wide range of plans they deem less profitable. This practice is known as "decommissioning" a plan.
Decommissioned Plans by the Numbers
- Nationwide: 15% to 20% of plans have had broker commissions eliminated.
- New York: More than 25% of plans have been decommissioned.
- Georgia (select areas): Over 35% of plans have been decommissioned.
Source: Data compiled for CNBC by Chapter
While not a new practice, the scale of these cuts is unprecedented. “It’s not something that’s out of the norm for that to happen, but the amount of the plans cutting and being decommissioned, that’s what’s not normal,” said Michael Antoine, an independent agent with Partner Insurance Solutions.
How This Affects Consumer Choice
This trend creates a potential conflict of interest. A broker may not be financially motivated to present a plan that pays no commission, even if it is the best option for a client. In some cases, brokers may not even be able to access or enroll clients in these non-commissioned plans through their systems.
Antoine described an experience where a plan was “being completely suppressed” by a carrier. “I couldn’t even enroll the person into the plan,” he said.
This makes it essential for consumers to be proactive. “This year in particular, it’s so important that people ask their Medicare advisor if there are plans that are available that the Medicare advisor may not be looking at because of these noncommission challenges,” advised Blumenfeld-Gantz.
Navigating the 2026 Open Enrollment Period
With so many changes underway, experts are urging seniors not to simply let their current plan renew automatically. The Medicare open enrollment period, which runs from October 15 to December 7, is the critical time to compare options.
“This is not the year to go on autopilot,” stated Whitney Stidom, vice president at the online brokerage eHealth. She emphasized the financial benefits of being diligent, noting that “doing comparison shopping can save over $1,800 in out-of-pocket costs just by simply comparing plans.”
Seniors should receive notices from their current insurers about any changes to their plans this week. These notices are the first signal that it is time to start researching and weighing the costs and benefits of all available options for the year ahead.
Uncertainty in the market remains high, as even insurers find it difficult to project enrollment when so many competitors are also adjusting their strategies. A carrier might reduce benefits expecting lower enrollment, only to gain members when a rival exits the market entirely.
