Medicare Advantage Adjustments by Major Insurers Amid Rising Costs

Medicare Advantage is entering 2027 with lower average premiums and broad consumer choice, but beneath that headline stability, major insurers are reshaping networks and leaning harder on HMO-style plans to control medical costs.

UnitedHealthcare, Aetna and Humana are among the national carriers adjusting their Medicare Advantage footprints as they respond to elevated healthcare utilization, prescription drug costs, changing federal payment policies and the challenge of maintaining competitive benefits without allowing expenses to outrun revenue.

For insurance professionals, one of the most important developments is not simply where carriers are entering or leaving. It is the type of coverage being emphasized. Some insurers are reducing exposure to broad PPO products while putting more weight behind HMOs, coordinated-care models and plans built around more controlled provider networks.

That shift has practical consequences for agents conducting plan comparisons, agencies preparing for Medicare enrollment conversations and carriers attempting to balance affordability, member experience and sustainable economics.

UnitedHealthcare Puts More Emphasis on HMOs

UnitedHealthcare, the country's largest Medicare Advantage insurer by enrollment, is placing greater emphasis on HMO plans for 2027. The carrier says approximately 95% of Medicare-eligible consumers within its geographic footprint will have access to one of its Medicare Advantage HMO plans, with most of those plans carrying a $0 premium.

The company is still maintaining a substantial Medicare presence. More than 94% of Medicare-eligible individuals nationwide are expected to have access to a UnitedHealthcare Medicare plan, and roughly 90% of consumers who have access to one of the company's Medicare Advantage plans will have a $0 premium option.

The strategic distinction is the increased focus on coordinated networks. HMOs generally use more structured provider relationships than PPOs and often place primary care at the center of a member's healthcare experience. PPOs traditionally provide greater flexibility to use a wider selection of providers, frequently including some level of out-of-network coverage, but that flexibility can make costs more difficult for insurers to manage.

“It’s important that the primary care provider is in the driver seat.”

UnitedHealthcare has said members in its HMO products experienced lower out-of-pocket spending than comparable PPO members in markets where both options were available. From the carrier's perspective, a more coordinated network can also create additional opportunities to manage referrals, close care gaps and direct members toward providers with established plan relationships.

Aetna and Humana Are Reworking Their Footprints Too

The movement is not limited to UnitedHealthcare. Aetna is also adjusting its Medicare Advantage portfolio for 2027. Its overall number of Medicare Advantage plans is expected to increase slightly, but the mix is changing as the carrier reduces PPO offerings while adding Chronic Condition Special Needs Plans.

Aetna is expected to offer 654 Medicare Advantage plans for 2027, compared with 642 previously, while cutting 20 PPO products and adding 29 Chronic Condition Special Needs Plans. The carrier is also withdrawing standard Medicare Advantage plans from more than 100 counties and leaving Maryland and New Hampshire with those offerings.

Humana is making its own geographic adjustments. After offering Medicare Advantage coverage across roughly 85% of U.S. counties for 2026, its 2027 footprint is expected to cover more than 80% of counties. The company is leaving dozens of counties and withdrawing from Minnesota while maintaining a large national Medicare Advantage presence.

Humana previously indicated that its 2027 plan exits could affect approximately 600,000 members. That figure illustrates why footprint changes matter even when the national market appears relatively stable. A modest percentage change for a large carrier can translate into substantial numbers of beneficiaries who need to compare new options.

The National Market Still Looks Broad

The carrier pullbacks should not be confused with a broad disappearance of Medicare Advantage. Federal projections for 2027 continue to show extensive availability across the country.

Medicare Advantage enrollment is projected at approximately 34 million people in 2027, representing about 47.4% of the total Medicare population. Federal projections have historically understated final enrollment, so actual participation could ultimately come in higher.

The number of available Medicare Advantage plans nationwide is also expected to remain relatively steady, declining only slightly from 5,553 plans in 2026 to approximately 5,532 in 2027. More than 99% of beneficiaries are expected to have access to at least one Medicare Advantage plan, and 97% are projected to have at least 10 options.

Those national figures, however, can obscure meaningful local changes. Medicare Advantage is fundamentally a county-by-county market. A beneficiary may technically have numerous plans available while discovering that a preferred physician, hospital system or specialist participates in only a portion of them.

Lower Premiums Do Not Mean Less Need to Compare

One of the more striking features of the 2027 Medicare Advantage market is that average premiums are projected to decline at the same time carriers are making targeted network and footprint adjustments.

The weighted average monthly Medicare Advantage premium is projected to fall from $14.37 in 2026 to $12 in 2027, a decline of approximately 16.5%. Supplemental offerings such as dental, vision and hearing benefits are also expected to remain broadly available.

Approximately eight in 10 Medicare Advantage beneficiaries are projected to be able to remain in their existing plan with the same or a lower premium.

For agents and beneficiaries, however, premium is only one part of the comparison. Provider participation, specialist access, prescription coverage, maximum out-of-pocket exposure, referral requirements and supplemental benefits can have a much greater financial impact than a relatively small difference in monthly premium.

Why Network Design Has Become So Important

The increased attention to HMOs reflects a larger financial challenge facing Medicare Advantage insurers. Carriers have spent several years dealing with elevated medical utilization, particularly among older adults who postponed some care during the pandemic and later returned to hospitals, outpatient facilities and physician offices.

Prescription drug costs and specialty therapies have added another layer of pressure. At the same time, Medicare Advantage payment methodology has been changing, including revisions to the federal risk adjustment model and rules governing which diagnoses contribute to risk scores.

Federal payment policy for 2027 is more nuanced than simply describing it as a reimbursement cut. The final Medicare Advantage rate announcement projected an overall average payment change of 2.48% before considering anticipated changes in enrollee risk scores. When estimated risk-score trends were incorporated, the projected increase was higher.

For carriers, the issue is therefore not only how much federal payment changes from one year to the next. It is whether expected revenue is sufficient relative to medical trends, utilization, benefit commitments, provider contracts and the characteristics of each local membership population.

The Trade-Off Between Flexibility and Cost Control

PPO plans have historically appealed to Medicare beneficiaries who value provider flexibility. Depending on the plan, members may be able to obtain care outside the contracted network, although higher cost sharing or other restrictions can apply.

HMOs typically rely more heavily on contracted networks and coordinated care. That gives insurers additional tools to negotiate provider arrangements, manage utilization and develop closer relationships between primary care providers, specialists and other participants in the care system.

Neither design is automatically better for every beneficiary. A retiree who spends part of the year in another state may value PPO flexibility differently from someone whose physicians and hospital are all part of a strong local HMO network. A beneficiary with several specialists may have different priorities from someone primarily concerned with prescription costs and primary care.

That makes network structure increasingly important to the sales and enrollment conversation.

What Insurance Professionals Should Be Reviewing

For agencies preparing for Medicare enrollment season, carrier and network changes make it risky to approach renewals as a simple premium comparison. A plan that looks similar on the surface can produce a very different member experience if its provider network, referral requirements or drug coverage has changed.

• Provider participation: Confirm physicians, specialists, hospitals and preferred facilities remain in network.
• Plan structure: Explain clearly when a beneficiary is moving between PPO and HMO coverage.
• Prescription coverage: Review formularies, pharmacy networks, deductibles and member cost sharing.
• Out-of-pocket exposure: Compare copays, coinsurance and maximum annual limits, not premiums alone.
• Service-area changes: Identify discontinued plans and county withdrawals before enrollment deadlines approach.

These conversations are especially important for beneficiaries whose plans are being discontinued. A forced plan change creates both a coverage decision and a service opportunity. Agents who can clearly explain why the available choices have changed can help reduce confusion while identifying differences that might otherwise emerge only after a member attempts to use the plan.

For Agencies, Network Knowledge Becomes a Competitive Advantage

As plan designs become more localized, an agency's knowledge of local healthcare systems becomes increasingly valuable. Knowing which major hospital groups, physician practices and specialty providers participate in competing plans can be just as important as understanding premiums and supplemental benefits.

That raises the importance of maintaining accurate product information and avoiding assumptions based on prior years. A carrier may continue operating in the same county while replacing a PPO with an HMO, changing cost sharing or altering the provider relationships that made the previous plan attractive.

Agencies with significant Medicare books may also want to identify affected clients proactively rather than waiting for beneficiaries to call after reading an Annual Notice of Change. Large carrier exits and plan consolidations can concentrate a significant amount of renewal work into a relatively short enrollment window.

Carriers Are Trying to Preserve What Consumers Notice Most

Another notable feature of the current strategy is that insurers are attempting to control expenses without abandoning many of the benefits that have driven Medicare Advantage growth.

UnitedHealthcare, for example, says its 2027 members will continue to have access to $0 primary care visits, $0 preventive services and $0 copays on Tier 1 prescription drugs. Dental, hearing and vision coverage also remain prominent components of the company's offering.

That illustrates the balancing act facing carriers. Supplemental benefits and low premiums are highly visible to consumers, while network configuration operates more quietly in the background. Restricting or reorganizing networks can therefore become one of the mechanisms insurers use to preserve attractive front-end benefits while trying to improve the economics of the underlying plan.

What to Watch During the 2027 Enrollment Cycle

The next question is whether the greater emphasis on HMOs remains concentrated among the largest carriers or develops into a more sustained Medicare Advantage trend.

Some insurers are contracting while others continue expanding. Newer and regional competitors are entering counties vacated by larger organizations, and Special Needs Plans remain an important area of product development. That means the market is not moving uniformly toward fewer choices. Instead, the mix of carriers, networks and product types is changing.

Medicare's annual open enrollment period runs from October 15 through December 7, making the coming weeks an important test of how beneficiaries respond to those changes.

For insurance professionals, the practical takeaway is straightforward: the 2027 Medicare Advantage story is about more than premiums. Network structure, local carrier footprints and coordinated-care models are becoming increasingly central to how plans manage costs and differentiate their products.

Agents and agencies that understand those changes at the provider and county level will be better positioned to explain what beneficiaries are actually gaining or giving up when they move from one Medicare Advantage plan to another.