U.S. health insurers including UnitedHealthcare and CVS Health’s Aetna will shift toward Medicare Advantage plans with tighter provider networks in 2027. The changes come as insurers respond to higher medical and drug costs, increased use of healthcare services and pressure on government reimbursement.
UnitedHealth, Aetna and other insurers manage Medicare Advantage plans for adults aged 65 and older and people with disabilities on behalf of the federal government.
About 34 mn people are expected to be enrolled in the plans in 2027, down 6%, according to government estimates based on insurer feedback.
UnitedHealthcare plans to leave some areas where its business currently has a higher share of preferred provider organization plans. PPOs give members the option to receive care outside a plan’s provider network, making them more expensive for insurers to operate.
Aetna is moving further toward health maintenance organization plans, which generally restrict coverage to a smaller network of lower-cost providers. The insurer will offer Medicare Advantage plans in 41 states in 2027, compared with 43 states this year.
Aetna will lose about 950,000 members next year as it withdraws from some states. UnitedHealthcare said 66% of its members will have access to both an HMO and a PPO in 2027, down from 70% in 2026.
Humana is also reducing its Medicare Advantage footprint. The insurer said it will offer plans in more than 80% of U.S. counties next year, compared with 85% in 2026.
Insurers have said during quarterly earnings calls that government reimbursement hasn’t kept pace with rising medical expenses. The federal government has reduced payments to companies operating Medicare Advantage plans since 2024 as part of efforts to lower spending.
The Centers for Medicare and Medicaid Services expects average Medicare Advantage premiums to fall more than 16% in 2027, to about $12 from $14.37.
The decline in premiums comes as some insurers narrow geographic coverage and increase the share of plans with more restricted provider networks.
UnitedHealthcare operates the largest Medicare Advantage business in the U.S., followed by Humana and CVS Health’s Aetna, according to KFF data. Insurers also reduced their county footprints last year after higher-than-expected medical service use made some Medicare Advantage markets less profitable.
