Several of the largest health insurance companies in the United States, including UnitedHealth, Humana, and CVS Health's Aetna, have announced they will scale back their Medicare Advantage offerings for 2026. The decisions are a response to reduced government payments and an increase in medical service usage among members.
These changes will result in fewer plan options in hundreds of counties across the country, potentially affecting hundreds of thousands of enrollees who rely on these privately managed health plans.
Key Takeaways
- UnitedHealth, Humana, and CVS Health are withdrawing Medicare Advantage plans from numerous U.S. counties and some states for 2026.
- The primary reasons cited are lower government reimbursement rates from the Centers for Medicare and Medicaid Services (CMS) and higher-than-expected healthcare costs.
- UnitedHealth's withdrawal will impact approximately 180,000 people across 109 counties.
- Humana is reducing its presence from 89% to 85% of U.S. counties, while Aetna is pulling prescription drug plans from 100 counties.
Dual Pressures on the Insurance Industry
The move by leading insurers to reduce their Medicare Advantage footprint is driven by a challenging financial environment. Companies point to two main factors: reduced government funding and a surge in patient demand for medical services.
Since 2024, the U.S. government has been adjusting payment rates to Medicare Advantage plans as part of a broader effort to manage federal healthcare spending. These plans are privately administered but publicly funded alternatives to traditional Medicare for individuals aged 65 and older or those with specific disabilities.
At the same time, insurers report that members are using healthcare services more frequently than anticipated, leading to higher operational costs. This combination of lower revenue and higher expenses has made operating in certain markets less profitable.
"The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs and increased utilization have created headwinds that no organization can ignore," stated Bobby Hunter, who manages government programs for UnitedHealth, during a press briefing.
What is Medicare Advantage?
Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare (Part A and Part B) offered by private insurance companies approved by Medicare. These plans often bundle prescription drug coverage (Part D) and may include extra benefits like dental and vision care. The government pays these private insurers a fixed amount per member to provide care.
How Major Insurers Are Adjusting
The nation's largest providers of Medicare Advantage plans are making significant changes to their service areas for 2026. The adjustments vary by company, with some exiting entire states and others trimming their presence in specific counties.
UnitedHealth's Significant Withdrawals
UnitedHealth, which operates the largest Medicare Advantage business in the country, will cease operations in 109 counties. According to the company, this decision will directly affect about 180,000 members.
A broader group of approximately 600,000 members will be impacted by the shutdown of over 100 plans. Many of these members are enrolled in Preferred Provider Organization (PPO) plans, which typically offer more flexibility by allowing patients to see providers outside of a designated network.
Humana Reduces National Footprint
Humana, the second-largest Medicare Advantage provider, is also scaling back. The company will reduce its plan availability from 89% of U.S. counties in 2025 to 85% in 2026. This includes a complete exit from two states, with its offerings dropping from 48 states to 46.
Despite the reductions, Humana is also introducing new plan types in 177 counties across four states. The company also noted that 83% of its standalone prescription drug plans are expected to feature lower premiums in 2026.
Market Share at a Glance
- 1st: UnitedHealth Group
- 2nd: Humana Inc.
- 4th: CVS Health Corp. (Aetna)
These three companies represent a substantial portion of the Medicare Advantage market, making their strategic shifts highly impactful for seniors nationwide.
CVS Health's Aetna Refocuses
CVS Health's insurance arm, Aetna, is set to offer plans in 43 states and 2,159 counties next year. This is a reduction from 44 states and 2,259 counties in 2025. The company specified that its prescription drug plans will be available in 100 fewer counties than the previous year.
However, Aetna is also expanding in a key area. It plans to increase its offerings for individuals who are dually eligible for both Medicare and Medicaid, the government program for low-income Americans. These specialized plans will be introduced in 16 new states.
What This Means for Enrollees
The widespread market exits mean hundreds of thousands of seniors and other eligible individuals will need to find new insurance coverage for 2026. When an insurer leaves a county, members enrolled in its plans must select a new one during the annual open enrollment period to avoid a gap in coverage.
The changes reflect a strategic realignment within the health insurance industry. Companies are exiting markets they deem unprofitable while, in some cases, investing in other areas like plans for dual-eligible populations or offering lower premiums on certain products to remain competitive.
As the healthcare landscape continues to evolve under new payment structures and utilization patterns, consumers will need to pay close attention during the upcoming enrollment season to understand how these changes may affect their coverage options and costs.
