Blog

Reasons for MA Plan Cuts – What’s going on

Recently, many insurers are pulling back or dropping Medicare Advantage plans in certain counties. Many Medicare advantage carriers are reducing offerings. This is especially true for PPO plans, which tend to be less restrictive for patients, but also costlier/riskier for insurers. Here’s a breakdown of the reasons for MA plan cuts and why some Medicare Advantage (MA) plans are leaving the market, what it means for enrollees, and how to prepare.

Why Some Medicare Advantage Plans Are Leaving the Market

In 2025 and beyond, several major insurers are scaling back or exiting certain Medicare Advantage (MA) markets. Companies like UnitedHealthcare, Humana, and Aetna are discontinuing specific plans or leaving select counties, affecting hundreds of thousands of beneficiaries. So, what’s driving these exits and what does it mean for Medicare enrollees?

Rising Costs and Slower Reimbursements

The main driver behind these exits is financial pressure. Health care costs; doctor visits, hospital stays, and prescription drugs continue to rise. Meanwhile, the Centers for Medicare & Medicaid Services (CMS) has limited how much funding increases for MA plans each year.

When reimbursement rates don’t keep pace with actual medical spending, insurers are forced to make tough decisions. Some reduce coverage areas; others leave markets entirely. The challenge is even greater in rural counties, where fewer enrollees mean higher per-member costs and less opportunity to spread financial risk.

Increased Regulation and Administrative Burdens

Medicare Advantage plans are subject to strict federal oversight. CMS star ratings, which measure quality and satisfaction, directly affect plan payments and bonuses. Plans with low ratings can face penalties or reduced funding.

New rules around prior authorization, marketing practices, and network adequacy have also added administrative costs. While these policies aim to protect consumers, they make operating certain plans more expensive and complex; especially for smaller carriers.

Shrinking Margins and Risky Plan Types

Preferred Provider Organization (PPO) plans, which allow greater provider flexibility, are especially expensive for insurers to run. In response, many companies are narrowing their focus to Health Maintenance Organization (HMO) plans with tighter networks and lower costs.

However, even with these adjustments, many insurers report that the combination of higher utilization, slower reimbursements, and increased regulation has made some plans unsustainable. As a result, certain counties are seeing fewer plan options for 2026.

Cutting Back on Benefits

To stay competitive and manage costs, insurers are also reducing extra benefits that have become popular selling points for Medicare Advantage plans.

Perks such as dental, vision, hearing, over-the-counter allowances, and fitness memberships are being scaled back or dropped altogether. Some plans have increased copays for specialists, raised out-of-pocket maximums, or restricted drug formularies.

While these changes help insurers control spending, they can leave beneficiaries with fewer incentives to stay on a plan—prompting more people to explore other options like Original Medicare with a Medigap supplement.

What This Means for Beneficiaries

If your Medicare Advantage plan is ending or changing benefits, you’ll receive an Annual Notice of Change (ANOC) this fall. It’s important to read this document carefully. You may find that your premiums, networks, or covered benefits are changing even if your plan remains available.

Here’s what to watch for:

• Fewer local plan options—especially in smaller or rural markets.
• Higher out-of-pocket costs due to benefit reductions or network changes.
• Provider access changes as plans narrow their networks.
• Reduced extra benefits, such as dental, vision, and wellness perks.

Watch a video on discontinued Medicare advantage plan special enrollment periods

If your plan is leaving your area entirely, you’ll qualify for a Special Enrollment Period (SEP) to choose a new plan or return to Original Medicare.

Agents, if you are ready to join the Crowe team; click her for online contracting.

What You Can Do

1. Review your ANOC early to understand all upcoming changes.
2. Compare new plans on Medicare.gov or with a licensed agent to see what’s available in your ZIP code.
3. Look beyond the premium. Consider total out-of-pocket costs, copays, and your provider network.
4. Verify your prescriptions. Ensure your medications are still covered under the plan’s formulary.
5. Explore Medigap and Part D options if you want more stability or broader provider access.

The Bottom Line

Medicare Advantage remains a strong and growing program, but rising costs and tighter reimbursement rules are forcing insurers to reassess their participation. Many are choosing to leave certain counties or reduce extra benefits to stay financially viable.

Stay updated on agent events and information

For beneficiaries, staying informed is key. Review your plan each year, compare options carefully, and don’t assume your current benefits will stay the same. A little preparation can help avoid surprises and ensure you continue to get the coverage and care you need.