Why are insurers cutting Medicare Advantage plans and counties for 2027?
The 2027 pullbacks followed cost-driven retrenchment that had already begun at large carriers, then a proposed 0.09% payment update that offered little additional funding. CMS raised the final update to 2.48%, but insurers still faced changes to star-rating inputs and continued to identify unprofitable plans and markets: UnitedHealth signaled selective participation changes, Humana identified roughly 600,000 affected members, Centene withdrew from three states, and HCSC cut its county footprint from 948 to 478 while exiting seven states. If your plan is ending, watch for the required notice by October 2 and use the October 15 to December 7 open-enrollment period to choose 2027 coverage.
Trace the chain
The insurer retreat
- 2UnitedHealth cost-driven exitsFinancial
UnitedHealthcare will exit plans serving more than 600,000 Medicare Advantage members in 2026
Reporting second-quarter results under returning CEO Stephen Hemsley, UnitedHealth said outpatient medical costs were running well above expectations and that its insurance arm would leave plans covering over 600,000 people for 2026, mostly PPOs, and might also shrink its Affordable Care Act footprint. UnitedHealthcare CEO Tim Noel said the company would prioritise margin over membership.
Healthcare Finance News ·
Without giving details of which markets would be affected, UnitedHealthcare CEO Tim Noel said, “Additionally, and unfortunately, given these pressures, we have made the difficult decision to exit plans that currently…
Why it matters here. Outpatient medical costs above expectations prompted UnitedHealthcare exits serving more than 600,000 members, so the 2027 pricing proposal arrived after a major carrier had already reduced exposure.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 3Near-flat 2027 proposalRegulatory
2027 advance notice proposes an almost flat 0.09 percent payment update
CMS proposed a net average increase of just 0.09 percent, about $700 million, for 2027, its smallest in years, citing the star ratings, risk-adjustment trends and the continued phase-in of the 2024 risk model. Insurers and Wall Street read the notice as confirmation that 2027 benefits and footprints would shrink further.
Centers for Medicare & Medicaid Services ·
If finalized, the proposed policies are projected to result in a net average year-over-year payment increase of 0.09%, or over $700 million in MA payments to plans in CY 2027.
Why it matters here. The proposed 0.09% update, worth about $700 million, offered far less new funding than the prior year's increase, so CMS's final rate decision became pivotal.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 5Clover ratings rulingLegal
Clover wins a ruling that CMS exceeded its authority on ten star-ratings measures
A federal district court granted Clover Insurance partial summary judgment, holding that CMS exceeded its statutory authority in calculating ten star measures and skipped notice-and-comment on ten more, the second court in a year to upend the ratings. Humana cited the decision in its pending Fifth Circuit appeal a week later.
Groom Law Group ·
On May 27, 2026, a federal district court granted partial summary judgment for Clover Insurance Company (“Clover”), holding that CMS exceeded its statutory authority in calculating ten Star Ratings measures and…
Why it matters here. The court's ruling that CMS exceeded its authority on ten star measures led CMS to reconsider affected quality-bonus calculations.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 6Bonus ratings recalculatedRegulatory
CMS begins recalculating certain 2027 quality bonus ratings
CMS issued guidance that it was voluntarily recalculating 2027 Quality Bonus Payment ratings for certain Medicare Advantage contracts. CMS said the recalculation resulted from the preceding court decision.
Clover Health Form 8-K ·
On June 17, 2026, CMS issued updated guidance informing all Medicare Advantage Organizations that it was voluntarily recalculating the 2027 Quality Bonus Payment ratings for certain Medicare Advantage contracts as a…
Why it matters here. CMS was recalculating certain 2027 Quality Bonus Payment ratings when UnitedHealth later said its 2027 bids would include benefit adjustments and selective market-participation changes.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 7UnitedHealth selective changesFinancial
UnitedHealth's MA membership is down 965,000 since year-end as it plans 'selective changes in market participation' for 2027
Second-quarter results showed seniors served through Medicare Advantage had contracted by 965,000 in the first half of 2026, and UnitedHealthcare CEO Tim Noel told analysts the 2027 bids relied on benefit adjustments and selective exits to protect margins. Trade reports later put the 2027 county exits in the dozens across a dozen states.
UnitedHealth Group Q2 2026 earnings release (SEC 8-K exhibit) ·
Seniors served through Medicare Advantage, including programs serving complex populations included in Medicaid, have contracted by 965,000 since year-end 2025.
Why it matters here. UnitedHealth's 965,000-member decline and planned selective market-participation changes showed continued reduction in exposure, so Humana's announced pullback was not isolated.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 8Humana plan cutsFinancial
Humana will drop 2027 plans covering about 600,000 members, 8 percent of its base
On its second-quarter call CFO Celeste Mellet confirmed that Humana's 2027 plan exits would affect roughly 600,000 members, concentrated in the least profitable plans, most rated 3.5 stars or lower for the 2027 bonus year, while the company expected to recapture a share similar to the 40-plus percent it kept after the 2025 exits. Non-renewal letters go out in September and October.
Becker's Payer Issues ·
Humana expects Medicare Advantage plan exits next year to affect around 600,000 members as the insurer continues to focus on margin recovery. “We will work to recapture a significant portion of that volume as we did in…
Why it matters here. Humana identified roughly 600,000 members in plans it would drop, concentrated in its least profitable offerings, extending the retreat to another major carrier.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 9Centene state exitsAnnouncement
Centene will cut Medicare Advantage plans and exit three states in 2027
Centene told third-party marketing organisations it would withdraw completely from Oklahoma, Tennessee and Hawaii for 2027, part of a cost-cutting retreat from Medicare Advantage. Trade reporting put the pullback at 133 plans across 158 counties and roughly 340,000 members.
KFF Health News Morning Briefing (Modern Healthcare) ·
“The insurer plans to completely withdraw from Oklahoma, Tennessee and Hawaii, according to a notice the company distributed to third-party marketing organizations last week.”
Why it matters here. Centene's withdrawal from Oklahoma, Tennessee and Hawaii made its reductions part of a broader carrier retreat rather than a single-plan adjustment, framing the next carrier's county cuts.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 10HCSC county cutsReport
HCSC plans to cut its Medicare Advantage county footprint
Health Care Service Corporation will sell Medicare Advantage plans in 478 counties in 2027, down from 948, and will exit Connecticut, Kansas, Montana, New York, Oregon, Utah and Washington, D.C. Counting standard Medicare Advantage plans alone, the footprint falls from 948 counties to 450, the largest county exit of any insurer, following HCSC's purchase of Cigna's Medicare business in 2025. Its sharpest pullbacks are in its own Blue Cross Blue Shield states, where Texas falls from 229 counties to 47.
Becker’s Hospital Review ·
HCSC will sell MA plans in 478 counties in 2027, down from 948, and exit Connecticut, Kansas, Montana, New York, Oregon, Utah and Washington, D.C.
Why it matters here. HCSC's reduction from 948 to 478 counties and exits from seven states added another major footprint contraction, so members in ending plans needed the required notice process.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
What members are toldRuns from 2026, alongside the strands above, not after them
- 11Member notice deadlineReport
Plan non-renewal letters are due by October 2; open enrollment runs October 15 to December 7
With insurers having told investors which 2027 plans will end on December 31, members learn by letter in early October, leaving a window before open enrollment closes on December 7. Those whose plan is terminated get a guaranteed-issue right to buy Medigap if they return to Original Medicare, a protection lost if they simply pick another MA plan.
24/7 Wall St. ·
Insurers spent the summer telling Wall Street exactly which Medicare Advantage plans are disappearing on December 31. Enrolled members get a letter in October, a closing enrollment window in December, and a rare legal…
Why it matters here. Members whose plans end must receive notice by October 2 and can use the October 15 to December 7 enrollment window to select 2027 coverage.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
What pushes back
- 12026 rate increase
CMS finalizes 2026 Medicare Advantage rates: a 5.06 percent increase, about $25 billion more for plans
Two months into the Trump administration, CMS finalized the 2026 rate announcement with a net payment increase of 5.06 percent, more than double the 2.23 percent the Biden administration had proposed in January, largely by using more recent claims data. It followed the April 4 final rule that dropped Biden-era proposals such as covering anti-obesity drugs.
Centers for Medicare & Medicaid Services ·
Today, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2026 Rate Announcement for the Medicare Advantage (MA) and Medicare Part D Prescription Drug Programs that finalizes the payment…
What it pushes against. Despite the 5.06% 2026 payment increase, UnitedHealthcare later cited outpatient medical costs above expectations when it announced exits affecting more than 600,000 members.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- 4Final rate improvement
CMS finalizes 2027 rates at 2.48 percent, over $13 billion, up from the near-zero proposal
The final 2027 rate announcement raised the net payment update from 0.09 percent to 2.48 percent, about 4.98 percent once expected risk-score growth is counted, mainly by updating the effective growth rate with newer fee-for-service data. Plan stocks rallied, but the update still trailed the 5.06 percent of 2026 and medical-cost trends insurers said were running near 7 percent.
Centers for Medicare & Medicaid Services ·
The final policies in the CY 2027 Rate Announcement are projected to result in an increase of 2.48% or over $13 billion in payments to MA plans in CY 2027. When accounting for estimated risk score trend in MA due to…
What it pushes against. Although CMS raised the final 2027 payment update to 2.48%, the next development was a court ruling that CMS had exceeded its authority in calculating ten star measures.
Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
Changes to this chain
- The member-notice step moved into its own strand: inserting HCSC left it out of date order inside the retreat strand, and it was never one of the retreats anyway.
- Proposal #199 accepted (publish:medicare-advantage-2027): replace step 9: [cause] Centene state exits -> medicare-advantage-2027#1008: Centene's withdrawal from Oklahoma, Tennessee and Hawaii made its reductions part of a broader carrier retreat rather than a single-plan adjustment, framing the next carrier's county cuts.; insert after 9: [cause] HCSC county cuts -> medicare-advantage-2027#1880: HCSC's reduction from 948 to 478 counties and exits from seven states added another major footprint contraction, so members in ending plans needed the required notice process.; answer: The 2027 pullbacks followed cost-driven retrenchment that had already begun at large carriers, then a proposed 0.09% payment update that offered little additional funding. CMS raised the final update to 2.48%, but insurers still faced changes to star-rating inputs and continued to identify unprofitable plans and markets: UnitedHealth signaled selective participation changes, Humana identified roughly 600,000 affected members, Centene withdrew from three states, and HCSC cut its county footprint from 948 to 478 while exiting seven states. If your plan is ending, watch for the required notice by October 2 and use the October 15 to December 7 open-enrollment period to choose 2027 coverage.
- Proposal #141 accepted (verify:v2): why of step 4 -> Although CMS raised the final 2027 payment update to 2.48%, the next development was a court ruling that CMS had exceeded its authority in calculating ten star measures.; why of step 6 -> CMS was recalculating certain 2027 Quality Bonus Payment ratings when UnitedHealth later said its 2027 bids would include benefit adjustments and selective market-participation changes.; why of step 10 -> Members whose plans end must receive notice by October 2 and can use the October 15 to December 7 enrollment window to select 2027 coverage.
- Proposal #41 accepted (verify:v1): why of step 1 -> Despite the 5.06% 2026 payment increase, UnitedHealthcare later cited outpatient medical costs above expectations when it announced exits affecting more than 600,000 members.; why of step 4 -> Although the final update rose to 2.48%, the next star-ratings ruling created a separate source of uncertainty for affected quality-bonus calculations.; why of step 6 -> CMS's recalculation of certain 2027 quality-bonus ratings left payment inputs for affected contracts unsettled before UnitedHealth described selective 2027 market-participation changes.
Timelines in this chain
- Medicare Advantage's Retreat: From the 2026 Rate Hike to the 2027 Plan Exits and Open Enrollment
- Social Security's Next Raise: From the 2.5% COLA to the 2027 Announcement
A chain is written by the editor from entries already published on the timelines above, each of which was read against its source before publication. The chain changes when those entries do. Data and terms.