UnitedHealthcare and Humana Cancel Nearly 1 Million Medicare Advantage Plans Amidst Rising Costs
Two of the largest health insurers are ending specific Medicare Advantage plans, primarily PPOs, affecting almost one million beneficiaries as they seek to protect corporate profits.
UnitedHealthcare and Humana, major providers of Medicare Advantage plans for seniors, are discontinuing benefits for nearly one million individuals. This decision comes as the companies aim to safeguard their profits amid increasing healthcare expenditures and usage.
The insurers are primarily canceling Preferred Provider Organization (PPO) plans, which offer greater flexibility in choosing doctors. These cancellations are concentrated in less profitable regions, according to reports.
UnitedHealth Group spokesperson Eric Hausman confirmed that approximately 390,000 members will lose their current plans. The company cited unexpectedly high healthcare usage and rising medical costs as factors impacting its financial performance in 2025. Humana's Chief Financial Officer Celeste Mellet indicated that about 600,000 members, representing roughly 8% of the company's Medicare enrollment, are affected by plan terminations slated for 2027. Humana has stated its intention to retain a significant portion of these members under alternative plans.
Industry experts suggest that insurance companies often discontinue plans to encourage beneficiaries to switch to options that are less costly for the insurer. Humana indicated that it is focusing on canceling low-profit plans while maintaining high-performing ones, rather than implementing across-the-board coverage reductions.
These changes are part of a broader trend where insurers are adjusting benefits to manage a recent surge in medical care usage and costs. This can lead to increased out-of-pocket expenses for beneficiaries, limitations on provider networks, and the reduction of additional plan perks. For instance, while Humana maintained its dental benefits, Clover Health increased its maximum out-of-pocket cost for members by $1,144 for 2027.
Furthermore, Medicare Part D prescription drug plans that previously offered a $0 monthly premium are becoming scarce. Many policyholders who relied on these zero-premium plans will now face monthly costs for prescription coverage.
UnitedHealthcare's strategy involves reducing benefits in plans that allow beneficiaries to see out-of-network doctors. The company is increasingly favoring plans with restricted provider networks and those designed for individuals with specialized medical needs. This approach allows insurers to better manage patient care and control overall spending.
Companies are also expanding specialized plans for individuals with severe or chronic conditions, partly due to government subsidies that cover sicker patients, enabling insurers to maintain profitability by closely managing complex health cases. Experts note that these chronic condition plans are driving growth in the Medicare Advantage market.