Health insurers are scaling back participation in Medicare Advantage (MA), cutting benefits, and tightening provider networks as rising medical costs, declining federal reimbursements, and stricter oversight reshape the market, according to the New Hampshire Insurance Department.
Six carriers currently sell MA plans in New Hampshire, but regulators warn that consumers should expect further market exits in the coming year.
In 2024, more than half of the state’s MA enrollees saw changes in benefits or carrier withdrawals. While state regulators do not control MA plan designs, a new law now requires insurers to provide early notice of market exits.
Insurance Commissioner DJ Bettencourt said the legislation, passed with support from Gov. Kelly Ayotte, strengthens oversight to ensure residents receive clear and timely guidance when carriers pull out. He emphasized that these disruptions are not unique to New Hampshire but reflect a nationwide trend.
Thanks to legislation advanced by the NHID and enacted by the Legislature and Gov. (Kelly) Ayotte, the department now has stronger oversight of Medicare Advantage withdrawals to ensure that Granite Staters receive clear, accurate information and timely support
DJ Bettencourt, Insurance Commissioner
That warning is echoed by major insurers. During Q2 earnings calls, UnitedHealth Group reported medical costs that exceeded expectations by $6.5bn.
The company cited a 7.5% MA cost trend compared to a projected 5%, with CEO Stephen Hemsley calling it a “generational pullback” in Medicare funding.
He said rising demand, higher unit costs, and aggressive provider billing practices will continue to pressure the business through 2026.
Hemsley noted that Medicare supplement plans, often a proxy for overall utilization in fee-for-service Medicare, show activity levels climbing sharply.
UnitedHealth now projects a cost trend above 11% in 2025, compared with 8–9% in prior years—evidence, he said, of broad-based pressures across the system.
Other carriers with heavy exposure to federal programs also reported weaker Q2 results. Beyond Medicare Advantage, several insurers flagged stress in Medicaid and Affordable Care Act exchanges, citing elevated demand for behavioral health services.
Not all players are experiencing the same headwinds. Humana, which restructured its portfolio last year by cutting unprofitable MA plans and rebalancing its membership mix, said its 2025 cost trends are in line with expectations. CEO Jim Rechtin told investors the company has been willing to lose members in the short term to protect long-term profitability.
Through July 30, Humana shed about 432,500 MA members, less than its original forecast of 550,000. Roughly 43% of departing members rejoined under redesigned plans with new benefit structures, while the company also saw stronger-than-expected “bounce-back sales” during open enrollment.
We don’t see bad membership. We see bad benefit packages and products. If your product and benefit structure is in the right place, all members can be good, profitable, attractive membership.
Jim Rechtin, Humana CEO
The split strategies highlight two diverging paths in Medicare Advantage: some insurers are retreating amid surging costs and shrinking margins, while others are reshaping product design to sustain long-term growth.
