Medicare Advantage’s evolution a sign of the times

As the open enrollment period for Medicare Advantage continues, seniors are confronting significant changes to the MA landscape, even though the market seems stable at the surface. Multiple analyses suggest the private option for Medicare may be amid a shift from growth to stability. 

The number of plans available in 2026 is virtually unchanged from 2025, according to one report from ATI Advisory. A senior in a typical county has about 42 plans to choose from during open enrollment this year, compared to 43 last year. In addition, the firm found 96% of beneficiaries have access to a plan with no monthly premium.  

Those figures hint at stability. Below the surface, five related factors point to a market shift. 

Big insurers are retreating. ATI noted national carriers are reducing their MA footprint, with UnitedHealthcare covering 3.7% fewer U.S. counties, Humana covering 6.8% fewer, and CVS Aetna covering 4.4% fewer. Based on recent earnings calls, United expects to lose 1 million MA members, or 12% of its total enrollment, while Humana will likely shed 425,000 members (more than 8% of members). 

Costs are increasing. A major motivation for the retreat: Care costs increased more than projected following open enrollment in 2025. Vermont has felt this pain acutely. Blue Cross Blue Shield Vermont lost roughly $50 million on the small state’s MA marketplace in five years and pulled out of the market for 2026 (along with United). That leaves just one insurer and three MA plans in Vermont in 2026 – and nearly 65% of Vermonters with no MA option. 

Offerings are evolving. ATI found the number of general enrollment MA plans is down 10% for 2026, and MA-only products (those without prescription drug coverage) are down 13%. Meanwhile, special needs plans (SNPs) now make up 33% of all MA plans offered, up from 25% in 2025. SNPs for chronic conditions represent the fastest-growing category, ATI said, as they “are attractive as vehicles for targeted benefit design.” 

Supplemental benefits are contracting. While SNPs are increasing non-medical benefit offerings such as food assistance and caregiver support, a second ATI Advisory report found general MA plans are scaling back on supplemental benefits. Dental, vision, and hearing remain table stakes, but fitness, over-the-counter, and transportation benefits are on the decline as plans shed low-value offerings. 

Overall growth is flattening. A KFF analysis showed MA made up 54% of Medicare enrollment in 2025. While that’s the highest MA enrollment has ever been, the overall growth rate is leveling off: The figure increased from 53% in 2024 and is anticipated to continue to rise by just 1% annually until 2034, when MA enrollment will likely hit 64%. Meanwhile, traditional Medicare enrollment increased in 2025 after years of losses. 

What do these trends mean for Medicare Advantage’s future? A briefing from HealthScape Advisors earlier this year described “intensified headwinds” and a “cooldown” in the market. Long-term growth is possible, the firm said – provided health plans “first address challenges around financial performance and sustainability.” 

Here, regional and provider-led health plans are well equipped to fill the void, ATI said. Growth for national plans has traditionally meant expanding geographic footprint; that strategy seems to be buckling under its own weight. Smaller plans, on the other hand, have localized resources and expertise to emphasize the value of provider relationships and specialized products to beneficiaries shopping for better MA options. 

Brian Eastwood is a Boston-based writer with more than 10 years of experience covering healthcare IT and healthcare delivery. He also writes about enterprise IT, consumer technology, and corporate leadership.