Medicare Advantage Plans Pull Back, Leaving Seniors With Fewer Choices for 2027

Millions of older Americans who get their Medicare benefits through private insurers will have fewer plans to choose from next year, and many will have to find new coverage during the open enrollment period that runs until December 7, as insurers withdraw Medicare Advantage plans from markets across the country.

Medicare Advantage lets private companies run Medicare benefits for people who choose it over traditional Medicare, which the federal government administers directly. More than half of the roughly 70 million people in Medicare are enrolled in these plans, drawn by extra benefits such as vision and dental coverage, often lower premiums, and drug coverage bundled into a single plan.

The trade-off is that insurers can decide where to sell plans and can leave markets they find unprofitable. That has been happening on a growing scale for three years, according to research published in JAMA and cited by NPR. Last year about 2.9 million people were in Medicare Advantage plans that closed. For 2027, estimates of how many will be affected range from at least 2 million to as many as 5 million.

The retreat is uneven. According to a KFF analysis of federal data cited by NPR, 193 counties, most of them rural, will have no Medicare Advantage plans at all next year, up from about 120 this year. Some large cities are also seeing sharp cuts, with Dallas, Minneapolis, Seattle, Houston and Portland each losing between a quarter and a third of their plans.

Nationally, the change is more modest. KFF found that the average beneficiary will be able to choose among 28 Medicare Advantage plans with drug coverage in 2027, down from 32 this year and from a peak of 36 in 2024, but still more than in 2021 or any year before it. Federal officials at the Centers for Medicare and Medicaid Services have emphasized the overall stability of the market, and KFF noted that most people whose plans are ending live in counties that will still have many options, along with traditional Medicare.

For those affected, the rules matter. If a plan is ending and the enrollee does nothing, they may be moved into another plan from the same insurer or placed in traditional Medicare without supplemental or drug coverage. People whose plans are ending can buy a Medicare supplement, or Medigap, policy without the usual restrictions, which can help those with preexisting conditions who were previously turned down.

There is a new complication this year: insurers can cap enrollment in some of the plans they still offer, so a plan may fill up before a late shopper gets to it. Companies are supposed to enroll people on a first-come, first-served basis and may not pick customers based on health, age or demographics.

Because so many people will be shopping for new coverage at the same time, NPR noted, it may take longer than usual to get help, another reason for those whose plans are ending not to wait until the deadline.