UnitedHealthcare and Humana cut Medicare Advantage plans for 1 mn

UnitedHealthcare and Humana, the two largest private health insurers serving older Americans, are discontinuing Medicare Advantage plans covering nearly 1 mn people as they withdraw from less profitable markets and adjust their businesses to rising medical costs, according to New York Post.

The reductions primarily affect Preferred Provider Organization (PPO) plans, which offer members greater flexibility when choosing doctors, including access to providers outside an insurer’s network.

Both companies are concentrating their operations on products and geographic areas that generate stronger financial returns, according to reporting by Healthcare Brew and Fortune.

• UnitedHealthcare is discontinuing plans covering approximately 390,000 members, while Humana is ending plans affecting around 600,000 people in 2027.
• Insurers are withdrawing from less profitable markets and reducing flexible PPO coverage as rising medical expenses put pressure on profitability.
• Medicare beneficiaries face narrower provider networks, higher out-of-pocket costs and fewer supplemental benefits, while $0-premium prescription drug plans are disappearing.

More than 70 mn Americans are enrolled in Medicare, the federal health insurance program covering people aged 65 and older and certain younger individuals with disabilities. Medicare represents the federal government’s third-largest expenditure after Social Security and interest on the national debt.

UnitedHealthcare and Humana discontinue plans covering nearly 1 mn members

UnitedHealth Group spokesperson Eric Hausman confirmed to Healthcare Brew that approximately 390,000 UnitedHealthcare members will lose their existing plans.

The company has faced pressure from unexpectedly high healthcare utilisation and rising medical expenses, which contributed to a decline in its share price during 2025. Its latest Medicare Advantage reductions concentrate on products that permit patients to receive care from doctors outside designated provider networks.

Humana is making similar adjustments. Chief Financial Officer Celeste Mellet said during a July financial call that approximately 600,000 members were enrolled in Medicare plans scheduled for discontinuation in 2027.

That represents roughly 8% of Humana’s 7.2 mn Medicare members, according to Fortune.

Mellet explained that the company was targeting plans with weaker profitability rather than reducing coverage uniformly across its portfolio. Humana intends to retain a substantial proportion of the affected members by transferring them to other available insurance products.

Discontinuing plans can encourage customers either to leave an insurer or select alternative products that offer fewer benefits and cost less to administer.

Remaining with the same insurance company does not necessarily mean retaining comparable coverage.

Alexis Levy, senior partner at healthcare consulting firm HealthScape Advisors, told Healthcare Brew that older Americans may be able to continue their relationship with an existing insurer but should not assume their new plan will provide the same benefits as the previous year’s coverage. In many cases, the level of protection will be reduced.

Rising healthcare costs drive changes to Medicare Advantage coverage

The cancellations form part of insurers’ responses to increasing medical utilisation and treatment expenses.

Insurers are raising members’ out-of-pocket expenses, restricting access to certain healthcare providers and reducing supplemental benefits to control spending.

UnitedHealthcare has concentrated its reductions on plans offering access to out-of-network doctors, company executives reportedly explained during an October earnings call.

The company is placing greater emphasis on plans with restricted provider networks and insurance products designed for members with specialised healthcare needs.

Restricted-network insurance arrangements give companies more control over where patients receive medical services. Members may have to select doctors from smaller approved networks and obtain referrals before accessing certain services.

These requirements allow insurers to manage the frequency of medical consultations and diagnostic testing, helping limit overall claims expenses.

Humana’s decision to discontinue lower-performing plans follows a similar financial approach, preserving products that meet profitability objectives while withdrawing offerings that generate weaker returns.

The changes mean some Medicare Advantage beneficiaries will face fewer choices even when their current insurance company continues operating in their region.

Medicare Advantage dental benefits and out-of-pocket costs change in 2027

Insurers are also modifying the benefits and cost-sharing arrangements available under Medicare Advantage plans.

Several major providers have reduced dental coverage and increased the amounts members may be required to pay directly for healthcare services in 2027.

Among UnitedHealthcare, Humana, Centene and Clover Health, Humana was the only insurer that did not reduce dental benefits.

Clover Health recorded the largest increase in maximum out-of-pocket costs among those providers, raising the amount members could potentially be required to pay by $1,144.

Such changes can increase members’ financial exposure even when their Medicare Advantage plans remain available.

An insurance policy may continue to offer medical coverage while requiring higher contributions from members or providing fewer additional services.

For older Americans evaluating their 2027 insurance options, the distinction between retaining a plan and retaining its previous benefits is therefore significant.

Zero-premium Medicare prescription drug plans are disappearing

Changes to Medicare coverage extend beyond Medicare Advantage plans to standalone prescription drug insurance. Approximately 4 mn older Americans with separate prescription drug coverage paid $0 in additional monthly premiums.

Zero-premium prescription drug plans are now disappearing, with nearly all affected policyholders expected to face monthly charges for their drug coverage.

Industry experts said insurers previously regarded $0-premium plans as an important competitive tool for attracting members.

Offering at least one such option had been a common feature of the market, particularly for insurers seeking to maintain or expand enrollment.

That competitive approach is changing. Some beneficiaries can no longer find plans without monthly premiums, while others may discover that the remaining $0-premium products provide substantially fewer benefits.

The changes introduce another potential expense for Medicare beneficiaries who previously obtained standalone prescription drug coverage without paying an additional monthly insurance premium.

Insurers expand restricted networks and specialised Medicare plans

UnitedHealthcare’s strategy reflects the financial incentives associated with different Medicare Advantage products. Plans offering broad access to doctors, including out-of-network providers, give members more flexibility but can make medical spending more difficult for insurers to control.

Products using restricted networks allow insurers to manage access to healthcare services through approved providers and referral requirements.

At the same time, insurers are expanding specialised Medicare Advantage plans intended for people with severe illnesses and complex medical needs.

Government payments are higher for beneficiaries with more serious health conditions, giving insurers additional financial support for covering patients whose treatment needs are greater.

These payment arrangements can help companies maintain profitability while managing care and spending for members with complex conditions.

The combination of narrower provider networks, targeted specialised products and withdrawals from lower-performing markets is shaping the plans insurers intend to offer in 2027.

For the approximately 990,000 UnitedHealthcare and Humana members affected by the announced discontinuations, the immediate consequence is the need to consider alternative coverage. Remaining with an existing insurer may be possible, but the available replacement plans could carry different provider restrictions, out-of-pocket obligations and supplemental benefits.