Growth of Medicare Advantage Plans and Market Dynamics in 2026
Medicare Advantage, a private insurance option tailored for Medicare beneficiaries, has seen substantial enrollment growth, overtaking half of eligible participants since 2023. This shift significantly affects federal expenditures as payments to these plans now surpass those for traditional Medicare. According to the Medicare Payment Advisory Commission (MedPAC), by 2026, payments to Medicare Advantage plans are projected to be 14% higher per person, leading to an additional $76 billion in federal spending compared to $24 billion two decades ago.
Policymakers are currently assessing potential adjustments to payments for Medicare Advantage plans. Their focus is on balancing the need to maintain beneficiary choices while addressing the financial implications. This involves evaluating access to supplemental benefits like dental, vision, and hearing coverage, which are increasingly influential in plan selection.
An analysis for 2026 indicates that 55% of eligible Medicare beneficiaries, approximately 35 million people, have opted for Medicare Advantage plans. This represents a significant increase from 19% in 2007 to a robust 55% by 2026. The Congressional Budget Office predicts this percentage will remain stable at 63% through 2036.
In individual Medicare Advantage plans, there has been a slight decline in market share from 62% in 2025 to 61% in 2026. Special Needs Plans (SNPs), designed for beneficiaries with specific health conditions, have experienced rapid growth, contributing to 85% of the total increase in Medicare Advantage enrollment over the past year. SNPs, which benefit from legislative changes like the Bipartisan Budget Act of 2018, currently account for 23% of enrollees, up from 21% in 2025.
SNPs are categorized into three types. Dual-Eligible SNPs (D-SNPs) make up the majority but saw a slight decrease to 78%. Conversely, Chronic Condition SNPs (C-SNPs) experienced increased enrollment, now covering 20% of SNP beneficiaries, mainly for diabetes or cardiovascular conditions. Institutional SNPs (I-SNPs) continue to hold a small market share at 2%, albeit with modest gains.
Group plans, partnering with employers or unions, saw a slight decrease to 16% of total Medicare Advantage enrollment. Despite this, the total number of enrollees surged from 1.8 million in 2010 to 5.7 million in 2026. Group plans remain appealing due to potential additional benefits and lower cost-sharing structures.
Market concentration is notable, with UnitedHealth Group and Humana dominating the Medicare Advantage market, collectively capturing 46% of enrollees. However, UnitedHealth saw a significant enrollment drop by nearly 647,000, while Humana gained 1.3 million between 2025 and 2026. Other market players like CVS Health and Kaiser Permanente control smaller shares, with CVS Health also leading the prescription drug plan market alongside Centene Corporation.