More Counties to Lose Medicare Advantage Plans, Limiting Choices for Millions

Millions of Americans enrolled in Medicare Advantage may need to reconsider their healthcare coverage for 2027 as insurance companies reduce their presence in certain markets. The number of U.S. counties without any Medicare Advantage plans is expected to rise from 67 in 2026 to 181 in 2027, reflecting a broader pullback by insurers seeking to protect profitability.

The changes come as Medicare beneficiaries prepare for the annual open-enrollment period, which runs from October 15 through December 7. During this window, eligible individuals can move from traditional Medicare to a private Medicare Advantage plan, switch between Advantage plans, or enroll in and change Medicare Part D prescription-drug coverage. Elections made during this period generally take effect on January 1.

According to healthcare policy research firm KFF, the average Medicare beneficiary will have access to 35 Medicare plans in 2027, down from 39 in 2026. Although the reduction in average plan availability may appear modest, its effects will vary across geographic markets. At least 3.8 million enrollees are expected to be forced to seek new coverage for the coming year as insurers discontinue plans or withdraw from selected areas.

Medicare Advantage serves as the private-plan alternative to traditional Medicare and covers more than half of the approximately 69.6 million people in the overall Medicare market. These plans can offer additional benefits, including dental and vision coverage, as well as annual limits on out-of-pocket expenses. However, beneficiaries may face more restrictive provider networks, requirements for specialist referrals and other conditions when accessing covered services.

Major insurers, including UnitedHealth Group, Humana and Aetna, the insurance subsidiary of CVS Health, are among the companies adjusting their Medicare Advantage offerings. Rather than continuing to prioritize membership growth and expansion into new markets, insurers are increasingly concentrating on maintaining their profit margins. Changes in healthcare utilization, market conditions and government payment policies have contributed to the industry's reassessment of its business strategies.

The expected contraction follows a particularly disruptive period in 2026, when insurance companies withdrew from markets and discontinued coverage options for substantial numbers of beneficiaries. An analysis published in February in the Journal of the American Medical Association estimated that as much as 10% of the Medicare Advantage market was affected by the need to find new plans. In 12 states, more than 20% of enrollees lost their existing plans, while Vermont experienced a particularly severe impact, with 92% of its Medicare Advantage beneficiaries losing their plans.

Although the changes planned for 2027 are expected to be less severe than those experienced in 2026, beneficiaries will still need to review their coverage carefully. Insurance plans can change their premiums, additional benefits, out-of-pocket limits, provider networks and rules governing access to medical services from one year to the next. Requirements such as prior authorization may also affect how easily patients can obtain certain treatments.

Matthew Fiedler, interim director of the Center on Health Policy at the Brookings Institution, noted that insurers have indicated they are reducing their Medicare Advantage participation for 2027. He pointed to policy efforts aimed at limiting payments to these plans, which have historically received more funding than the government would spend covering the same beneficiaries through traditional Medicare. He also suggested that some insurers may have misjudged healthcare utilization trends and other market conditions.

Federal payments remain an important factor in the economics of Medicare Advantage. According to the Medicare Payment Advisory Commission's March 2026 report to Congress, the federal government pays these plans an estimated 14% more per enrollee than it would spend if the same individuals were covered by traditional Medicare. Those additional payments represent approximately $76 billion in annual federal spending.

Despite the reductions in available plans, the Medicare Advantage market is expected to remain competitive in most parts of the country. Fiedler indicated that beneficiaries will generally continue to have multiple plan options and that many offerings are likely to provide additional benefits compared with traditional Medicare. Nevertheless, the changing market could leave some communities with fewer alternatives and require consumers to pay closer attention to differences in coverage.

Insurer performance ratings are another consideration for beneficiaries evaluating their options. The federal government uses these ratings to help consumers compare plans and determine whether insurers offering higher-quality coverage qualify for additional payments. Humana reported that 95% of its Medicare Advantage plans received four stars on the five-star rating scale. Meanwhile, CVS Health, Elevance Health and UnitedHealth Group reported declines of between 15% and 17% in enrollment in plans rated at least four stars.

For investors, the developments highlight the challenges insurers face as they balance membership growth, healthcare costs, regulatory requirements and profitability. For beneficiaries, the immediate priority is to determine whether their existing coverage will remain available and whether its costs or benefits will change in 2027. Reviewing annual notices of change and comparing available alternatives before the December 7 enrollment deadline will be essential to making informed healthcare coverage decisions.