Why Medicare Advantage enrollment might fall in 2026

After years of steady growth, Medicare Advantage (MA) plans are showing signs of strain — and that could slow or even reverse their momentum in 2026. Several factors are contributing to the trend.

For starters, some large insurers are exiting or reducing their MA footprints. UnitedHealth, the largest MA plan administrator, has announced it will stop offering MA plans in 109 counties — affecting hundreds of thousands of beneficiaries. 

Many of these are in rural or lower-density areas, where margins are tighter. Other insurers, including Humana and Aetna, are reportedly scaling back in certain regions. 

These exits mean fewer plan choices for some beneficiaries, and in some cases, people will be forced off their prior MA plans. Some will have to return to original Medicare, or choose a different MA or Part D plan, simply because their prior plan is no longer offered.

MA plans operate under fixed per-person payments from CMS. When enrollees need more care — especially with hospitalizations, expensive specialists, or more frequent chronic disease management — insurers may see costs exceed what they were paid. 

Rising utilization and healthcare inflation can make it harder for insurers to maintain generous benefits without squeezing margins.

When margins tighten, insurers may respond by trimming benefits, narrowing networks, or exiting less profitable areas — all of which could make MA less appealing to some beneficiaries.

Regulatory changes

The coming year brings a number of regulatory and technical shifts aimed at increasing oversight and accountability in MA and Part D (prescription drug) plans.  Examples include:

• New or stricter rules around provider directory accuracy, appeals, prior authorization protections, and data reporting.
• Adjustments in how MA and Part D payments are calculated, pushing plans to align more closely with costs and demand more efficient care. 

• Changes in Part D (drug benefits) under the redesign that could raise out-of-pocket costs for some enrollees or change how benefits are structured.

These regulations may raise administrative burdens or reduce flexibility for insurers, who may respond by reducing supplemental benefits or exiting markets.

Growing awareness of limitations

Historically, one of the major draws of MA vs. original Medicare has been the extra benefits: vision, dental, hearing, wellness programs, and capped out-of-pocket costs. But in recent years, insurers have reduced some of these “extras” or made them more constrained in order to control costs. 

But not everyone is unhappy. More beneficiaries and advisors are becoming aware of the trade-offs: narrower provider networks, prior authorization requirements, network restrictions when traveling, and sometimes more complex claims/appeals processes. Some may prefer the predictability and flexibility of original Medicare plus a Medigap or supplemental plan. 

Over the past decade MA enrollment share has climbed a lot. In 2025, more than half (54 %) of eligible Medicare beneficiaries are enrolled in MA. The growth, however, has begun to slow. In 2025, growth was only ~1.3 million new enrollees, which is slower than earlier double-digit years. 

Some analysts interpret this as a market “correction” phase since many who prefer MA already enrolled. Further growth becomes more challenging — especially under cost and regulatory pressure.

Medicare Advantage vs. Original Medicare: a refresher

To understand why people might switch—or avoid MA—it’s helpful to revisit how MA differs from “traditional” Medicare (often called Original Medicare).

Feature	Original Medicare (Parts A & B)	Medicare Advantage (Part C)
Structure / payer	Fee-for-service model run directly by the federal government	Private insurers contract with CMS to deliver Medicare benefits
Choice of providers	Virtually any doctor or hospital that accepts Medicare	Network-based (HMOs, PPOs) — out-of-network care often limited or more costly
Supplemental benefits	Basic Medicare doesn’t cover vision, dental, hearing, fitness, etc. Beneficiaries often add Medigap + Part D	Many MA plans bundle in extras like dental, vision, hearing, wellness, cell phone, over-the-counter benefits
Cost sharing / premiums	Beneficiaries pay Part B premiums, deductibles, coinsurance. Medigap supplements fill many gaps.	Many MA plans have $0 premium beyond Part B (though some charge extra); cost sharing and out-of-pocket limits are defined by plan
Out-of-pocket maximum	No absolute cap under original Medicare — costs can be high for serious illness unless insured with Medigap	MA plans are required to have an annual out-of-pocket maximum for in-network services
Rules and restrictions	Fewer restrictions; no prior authorization for most services	Prior authorizations, step therapy, utilization management, referral rules are more common
Flexibility / portability	Travel more easily; original Medicare works nationwide	Outside your service area, network restrictions may apply; emergency services still covered
Administrative complexity	Claims are processed by Medicare; supplemental/Medigap is relatively straightforward	More plan rules, appeals, denials, network complexity, plan changes year to year

Because of these tradeoffs, some beneficiaries will prefer to return to or stay with original Medicare plus a Medigap/Part D supplement if they value broader provider access, less complexity, and predictability — even at somewhat higher premiums.

What to watch and what it means for beneficiaries

• Fewer plan choices in some regions. As insurers exit counties, some seniors may find they have only one or no MA option, forcing them to consider original Medicare or out-of-area options.
• Benefit erosion. Supplemental benefits may be scaled back, or cost sharing may increase. Seniors who expected rich extras may find the new balance less appealing.
• Greater scrutiny during enrollment. Beneficiaries will need to compare carefully, especially in the annual election period (Oct. 15 – Dec. 7), to ensure their doctors and medications remain covered.
• Budgeting for costs. Although average MA premiums are projected to fall slightly (to about $14/month in 2026 from $16.40 in 2025) (Healthcare Finance News), other costs (Part B premium increases, higher deductibles, more cost sharing) may offset that gain.
• Advocacy and oversight demands. With more rule changes, beneficiaries and consumer groups are likely to push for transparency, better appeals rights, and protections from abrupt plan withdrawals.