Profits Over Patients. That is the only explanation for why healthcare insurance companies will terminate 4.3 million Medicare Advantage (MA) or stand-alone prescription drug plans on December 31, 2026. We need to flip the paradigm to Patients Over Profits.
According to an analysis released on October 27 by KFF, the independent source for health policy research, the 4.3 million includes about 3.1 million people in MA plans. When an MA plan is terminated so is the prescription drug plan (MA-PD). This is similar to enrollees affected by plan terminations last year (14% vs.13%). UnitedHealthcare and Humana are the two largest MA providers. According to a Yahoo Finance report, UnitedHealthcare will eliminate 1.1 million plans, and Humana will drop 600,000 plans.
About 1.2 million enrollees in stand-alone prescription drug plans (PDP) will see their plan terminated, according to KFF. This is double the share of PDP enrollees affected by plan terminations last year (6% vs. 3%). Most of these enrollees – 81% or 950,000 – are in the SilverScript Choice PDP sponsored by CVS Health. Another 190,000 enrollees (16%) are in HealthSpring Extra Rx, sponsored by Health Care Service Corporation. The remaining 3% of enrollees in terminated PDPs are in BlueCross Rx Value, Blue Rx PDP Complete and Blue Rx PDP Plus.
A KFF analysis released on October 30 found that the average monthly premium for Medicare Part D coverage in stand-alone prescription drug plans (PDPs) will increase to $51 in 2027, up 50% from $34 in 2026, if current enrollees don’t switch into lower-premium plans during open enrollment, which runs through December 7. The analysis of premium and cost-sharing requirements for Part D coverage in 2027 also finds that the projected average monthly premium of $51 for PDPs is more than five times higher than the drug coverage premium in MA plans that offer Part D coverage (MA-PDs), which is projected to average $9 per month next year. The estimated $17 increase in the average monthly PDP premium contrasts with an expected increase of less than $2 in monthly premiums for drug coverage through MA-PDs.
Healthcare insurance companies are terminating or scaling back MA and stand-alone prescription drug plans primarily to boost their corporate profits and stem heavy financial losses in unprofitable regions and service lines.
Churning of the Profitable Medicare Market
“Churning of the market by plans pulling out of certain areas in order to maximize profit and minimize losses reflects the challenges of a healthcare system that is overly reliant on private, for-profit insurance companies,” David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy, told Yahoo Finance. “Every year, plan sponsors make business decisions that are more attuned to the needs of shareholders than plan enrollees, leaving individuals scrambling to figure out their coverage.”
UnitedHealth Group reported $4.1 billion in profits for the 3rd quarter of 2026, up 75% year over year. Humana is not scheduled to release its 3rd quarter 2026 financial results until November 6. However, the company was highly profitable in the 2nd quarter of 2026 with a $694 million profit, up more than 27% year over year.
Doctor Cites Stranglehold of Insurers’ Profits
In a February 28, 2023, viewpoint article in JAMA (Journal of the American Medical Association), Dr. Donald M. Berwick wrote: “The grip of financial self-interest in US health care is becoming a stranglehold, with dangerous and pervasive consequences. No sector of US health care is immune from the immoderate pursuit of profit, neither drug companies, nor insurers, nor hospitals, nor investors, nor physician practices.
“Particularly costly has been profiteering among insurance companies participating in the Medicare Advantage (MA) program. Originally intended to give Medicare beneficiaries the choice of access to well-managed care at lower cost, MA has mushroomed into a massive program, now about to cover more than 50% of all Medicare beneficiaries and costing far more per beneficiary than traditional Medicare ever has.1 By gaming Medicare risk codes and the ways in which comparative “benchmarks” are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next 8 years than would have been the case if the same enrollees had remained in traditional Medicare.2 Opinions differ about whether MA enrollees experience better care and outcomes than those in traditional Medicare, but the weight of evidence is that they do not.”
NRLN Continues to Advocate Against MA Cost to Taxpayers
The NRLN’s 2026 Legislative Agenda notes that over the ten-year budget period 2025-2034, MA plan rebates will add over $1.5 trillion to the deficit. Examples: $89 billion 2025, $111 billion 2027, $155 billion 2030 and $240 billion 2034. After 53 years, private MA plan insurers have failed on their promises to be competitive with Medicare Fee-for-Service (FFS). MA rebate-to-bid ratios grew from 10.1% in 2015 to 19.9% in 2025. Trustees projected 24.2% by 2034. Rebate dollars include 15% insurer overhead and profit. The average cost for each of 35.5 million enrollees in MA in 2025 was 120% of the cost of Medicare FFS enrollees. MA plans hold a 51% share of the Medicare market but fail to deliver better quality or service, and insurers have delayed, withheld and denied Medicare payments, and are repeatedly cited for upcoding and risk adjustment payment practices.
Protecting Seniors When MA or Rx Plans Are Terminated
When an MA plan or an original Medicare supplement (Medigap) plan or prescription drug plan is ceased or terminated such as by a healthcare insurance company or by a company-sponsored benefit plan, federal law requires plan participants to be informed of their Medicare Guaranteed Issue Right (GIR) and Special Enrollment Period (SEP). A GIR prohibits insurance companies from denying coverage or overcharging an applicant for a Medigap or MA policy, regardless of pre-existing health conditions. A SEP allows one to shop for the best deal possible for an MA, Medigap or Rx plan.
If you were notified that your plan(s) would be terminated on December 31, 2026, you should have received a notice you are entitled to a GIR and SEP. If you were not notified that you are entitled to a GIR and SEP you should contact your insurance company, agent or corporate plan administrator to insist that you receive a GIR and SEP letter.
You won’t have a plan as of January 1 unless you take action now. The best time to decide what to do for 2027 coverages is during the current Medicare Open Enrollment Period, which continues until December 7. Use the Medicare Plan Finder at www.Medicare.gov to compare plans during the Open Enrollment.
With Medicare’s plan finder tool, you can shop for different MA plans, Medicare supplement plans (Medigap) and Medicare Part D prescription drug plans. If you have questions about signing up for a plan, assistance is available from the State Health Insurance Assistance Program at www.shiphelp.org or call 877-839-2675. SHIP is a national network of trained volunteers who provide one-on-one assistance, counseling and education to Medicare beneficiaries and their families.
Bill Kadereit, President
National Retiree Legislative Network
