UnitedHealthcare and Humana are ending Medicare Advantage plans affecting almost one million people in 2027, as insurers respond to rising medical costs and increased use of healthcare services.
UnitedHealth Group said about 390,000 UnitedHealthcare members would be affected by plan closures, while Humana has said around 600,000 of its members are enrolled in plans that will end. The figures represent a combined total of nearly one million people.
Humana’s affected members account for about 8% of its nearly 7.2 million Medicare Advantage customers. UnitedHealthcare reported 7.6 million Medicare Advantage members at the end of the third quarter of 2026, after reducing its membership following unexpectedly high costs and utilisation.
Humana chief financial officer Celeste Mellet said the company had taken a targeted approach, ending plans with lower returns while retaining those that were performing better. She said Humana hoped to “recapture a significant portion” of the members affected by the withdrawals.
UnitedHealthcare has concentrated its 2027 reductions on preferred provider organisation plans, continuing a strategy of prioritising health maintenance organisation plans and special needs plans, according to company president Bobby Hunter.
Medicare Advantage benefits face pressure
The changes come as insurers reduce some benefits and increase costs for members, despite the Centers for Medicare and Medicaid Services describing the overall 2027 Medicare Advantage market as stable, with lower average premiums.
An analysis of Medicare Plan Finder data by Leerink Partners found that several major insurers had reduced dental benefits and increased cost-sharing requirements for 2027, while primary care charges were generally unchanged.
Clover Health, UnitedHealthcare, Humana and Centene were identified as showing the strongest shift towards protecting margins rather than pursuing growth. Humana was the only one of the four not to reduce dental allowances in the plans examined, while Clover recorded the largest increase in maximum out-of-pocket costs, rising by $1,144 for all sampled members.
Alexis Levy, a senior partner at HealthScape Advisors, said members who stayed in the same plan might still see significant changes to their cover.
“A senior may be able to keep their plan, but that doesn’t mean they’re going to have the same level of benefit that they had from the previous year, and in many cases, they may not,” she said.
There will also be fewer zero-premium options. A KFF analysis found that four million people enrolled in standalone Part D prescription drug plans who received them free last year would no longer have a $0 premium in 2027, although people eligible for low-income subsidies may still qualify.
Zero-premium Medicare Advantage plans have also become less common. Brooks Conway, a principal at Oliver Wyman, said insurers were either withdrawing such products or making the benefits attached to them less generous.
“In most regions, for a long period of time, if you wanted to be a competitive Medicare Advantage insurer, you needed a $0 product,” he said. “In 2026 and continuing into 2027…you’re either seeing no options for a $0 product or the benefits that are associated with that $0 product becoming leaner.”
Insurers favour HMOs and special needs plans
Experts said insurers were increasingly favouring HMOs and special needs plans over PPOs. HMOs generally have narrower networks and higher cost-sharing, which can give insurers greater control over healthcare use, while special needs plans can offer higher margins and more targeted care management.
Arielle Trzcinski, principal analyst at Forrester, said the shift towards special needs plans was continuing, while Ms Levy said chronic special needs plans remained “the growth engine for the MA market”.
The changes follow reductions in PPO offerings during the 2025 and 2026 plan years, alongside maintained or increased availability of HMOs and special needs plans. Insurers have been responding to higher utilisation and medical costs recorded over the past two years.
