I’m thrilled to sit down with James Maitland, a seasoned expert in healthcare policy and insurance markets with a deep understanding of the Medicare Advantage program. With years of experience analyzing trends and shifts in the industry, James offers invaluable insights into the recent decisions by major insurers like UnitedHealthcare, Humana, and Aetna to scale back their Medicare Advantage plans for 2026. In this conversation, we explore the reasons behind these cutbacks, the impact on seniors, the strategies of other players in the market, and what this all means for the future of healthcare choices for older Americans.
Can you walk us through why major insurers like UnitedHealthcare, Humana, and Aetna are reducing the number of states and counties they cover for Medicare Advantage plans in 2026?
Absolutely. The primary driver behind these cutbacks is profitability—or the lack thereof in certain regions. These insurers are facing tighter margins due to a combination of factors. Over the past couple of years, they’ve seen seniors utilizing more medical care, often at a higher cost than anticipated. This unexpected spike in utilization has squeezed their financial models. On top of that, policy changes from Washington, including adjustments to reimbursement rates and risk adjustment methodologies, have added pressure. So, these companies are strategically pulling out of underperforming areas to focus on geographies where they can maintain or improve their bottom line.
What role does the increased use of expensive medical care by seniors play in these decisions?
It’s a significant factor. Insurers build their plans and premiums based on actuarial predictions about how much care their enrollees will need. But when seniors access more services—think inpatient stays, specialized treatments, or even just more frequent doctor visits—than expected, it throws off those calculations. The costs pile up quickly, especially for complex or chronic conditions that require pricey interventions. For these large carriers, continuing to operate in areas where this trend is pronounced just isn’t sustainable without major adjustments, which is why they’re retrenching to more predictable markets.
How are policy changes from Washington contributing to the challenges these insurers face?
Washington has been tweaking the Medicare Advantage framework in ways that directly impact profitability. For instance, changes to how payments are calculated through risk adjustment mean insurers might receive less for covering sicker patients than they did before. There’s also been a push to control overall program costs, which translates to lower reimbursement rates in some cases. Add to that increased scrutiny on plan quality and compliance, and you’ve got a tighter operating environment. Insurers are finding that some regions just don’t pencil out under these new rules, so they’re scaling back to focus on areas where they can still turn a profit.
Can you break down the specific reductions in coverage by UnitedHealthcare, Humana, and Aetna for 2026, and what this means for seniors in affected areas?
Sure. According to recent data, UnitedHealthcare is dropping coverage in one state and 108 counties. Humana is pulling out of three states and 194 counties, while Aetna is reducing its footprint by one state and 98 counties. For seniors in these areas, this can be a real disruption. They may lose access to their current plan, which means they’ll need to shop for a new one during open enrollment. That process can be daunting, especially if they’re not aware of the changes or if the remaining options don’t match their previous coverage in terms of costs, benefits, or provider networks. It’s not just about finding a plan—it’s about ensuring it meets their healthcare needs without breaking the bank.
What kind of disruptions should seniors brace for in the regions where these big insurers are pulling out?
The disruptions can vary, but at the core, seniors might find themselves without their current plan and forced to switch. This could mean higher premiums or out-of-pocket costs if the new plans aren’t as generous. They might also face narrower provider networks—especially as insurers lean toward HMOs to control costs—potentially losing access to their preferred doctors or hospitals. On top of that, benefits like over-the-counter allowances or supplemental perks might be reduced or eliminated in the new options. And honestly, the emotional toll shouldn’t be underestimated; navigating these changes can be confusing and stressful, especially for those who aren’t tech-savvy or lack support to research alternatives.
While some big players are scaling back, others like Elevance and Centene are expanding their Medicare Advantage footprint. What’s behind their decision to grow in 2026?
It’s a mix of strategy and opportunity. Elevance and Centene see potential in markets where others are retreating. Elevance, for instance, is adding one state and 64 counties, possibly betting on less competition in those areas to capture market share. Centene, adding 41 counties, often focuses on underserved or lower-income populations through their plans, which might align with regions where they can still operate profitably. Both companies likely have different risk tolerances or operational efficiencies compared to the bigger players pulling back. They’re positioning themselves to fill gaps, even if modestly, while others retrench.
How does Elevance’s exit from the Part D prescription drug market fit into their broader strategy for Medicare Advantage?
Elevance’s decision to exit Part D seems to be about streamlining their focus. Prescription drug plans can be a complex and sometimes less profitable segment due to fluctuating drug costs and regulatory oversight. By stepping away from Part D, they’re likely redirecting resources toward strengthening their Medicare Advantage offerings, where they see more growth potential. It’s a way to double down on core competencies in certain geographies, especially as they expand into new states and counties, rather than spreading themselves thin across multiple product lines.
What gives Centene the confidence to expand into more counties while others are cutting back?
Centene’s confidence likely stems from their business model, which often targets specific demographics, like dual-eligible individuals who qualify for both Medicare and Medicaid. They’ve built expertise in managing care for these populations, which can be more predictable in terms of costs and needs in certain regions. They might also have operational efficiencies or partnerships that allow them to enter new counties at a lower risk. Plus, with bigger players like UnitedHealthcare pulling out, Centene sees a chance to grab market share in areas where competition is thinning out.
With smaller and regional carriers potentially stepping in to pick up members in 2026, how realistic is this opportunity for them?
It’s a real opportunity, but not without hurdles. The retreat of major insurers leaves a void—potentially hundreds of thousands, if not a million, seniors looking for new plans. Smaller carriers can capitalize on this by offering competitive plans tailored to local needs. However, their success depends on their ability to scale quickly, market effectively during open enrollment, and build trust with seniors who might be wary of lesser-known brands. It’s feasible, but they’ll need to move fast and smart to seize the moment.
What challenges might these smaller carriers face in attracting seniors who are losing coverage from bigger insurers?
Smaller carriers often struggle with brand recognition—seniors are more likely to trust household names like UnitedHealthcare or Humana. They also might lack the robust marketing budgets or broker networks that big players use to drive enrollment. On the operational side, they could face challenges in building provider networks that match what seniors are used to, especially in rural or less populated areas. And if their plans aren’t competitively priced or don’t offer comparable benefits, they risk being overlooked during the enrollment window when seniors are making quick decisions under pressure.
Even though the average number of Medicare Advantage plans per county is holding steady at around 41 to 42, what should seniors be aware of when choosing a plan for 2026?
While the raw number of plans might look stable, the devil is in the details. Seniors need to dig into the specifics of each plan because insurers are tweaking things in ways that aren’t immediately obvious. Premiums for general enrollment plans are actually creeping up—by about $2.84 on average, which is a 22% jump. Deductibles and out-of-pocket maximums are also rising in many cases. Then there’s the trimming of benefits, like reduced allowances for over-the-counter items or shifts to HMOs with tighter provider networks. So, even with plenty of plans to choose from, seniors should carefully compare costs, coverage, and access to ensure they’re not caught off guard.
Looking ahead, what is your forecast for the Medicare Advantage landscape over the next few years given these shifts?
I think we’re in for a period of continued turbulence. The push and pull between profitability and policy will likely keep major insurers reevaluating their footprints, which could mean more cutbacks or strategic expansions depending on how reimbursement rates and regulations evolve. Enrollment might dip slightly, as projected with the drop to 34 million in 2026, but I don’t see Medicare Advantage losing its overall appeal—it’s still a huge market. Smaller and regional players have a window to grow, but they’ll need to innovate to compete. And for seniors, the complexity of choices will probably increase, making education and support during open enrollment more critical than ever. I expect we’ll see ongoing efforts from CMS to balance costs with access, but the real question is whether those efforts can keep pace with the industry’s rapid shifts.
