Medicare Advantage in 2026: Insurers rethink strategy amid market pressures

A wave of Medicare Advantage market exits, plan consolidations, and slowing enrollment growth suggest that insurers are adjusting their strategies—some retreating entirely, others expanding into new areas.

For decades, it seemed like there was no stopping Medicare Advantage. Enrollment in the private plan alternative to traditional Medicare, has more than doubled since 2010 and by 2023, more than half of eligible Medicare beneficiaries were enrolled in a Medicare Advantage plan.

But the year 2026 appears to mark a turning point for the industry. Insurers predict a decrease in members, estimating that enrollment will represent 48 percent of all people eligible for Medicare compared to 50 percent in 2025.

Insurers exiting the market

Indeed, several insurers have announced plans to fully or partially exit the Medicare Advantage market, citing unsustainable economics and regulatory challenges. In recent weeks, the following carriers say they will discontinue Medicare Advantage plans:

Blue Cross Blue Shield of Vermont will terminate its Vermont Blue Advantage MA plan, affecting about 5,500 members. The plan was offered to Vermont seniors for the last five years, but the insurer said the state has been severely affected by payers choosing to leave the Medicare Advantage market and high utilization of medical care by Vermont Blue Advantage members.

“These combined forces make the Vermont Medicare Advantage market unsustainable for Vermont Blue Advantage to be able to offer reasonably priced and affordable products to serve as an alternative to traditional Medicare coverage,” the insurer said in an announcement.

Sentara Health Plans will no longer offer certain plans for members in Viriginia and North Carolina due to higher costs and reimbursement pressures, 13NewsNow reports. The exits impact Medicare Advantage members enrolled in Sentara’s non-dual, prescription drug HMO, and chronic condition special needs plans. The insurer will continue its Medicaid dual eligible special needs plans and employer, individual, and family plans.
Samaritan Health Plans in Oregon has also announced plans to withdraw from the market due to rising costs of care, changes to federal reimbursement, and changes in the demographics of enrollment. Samaritan said it will no longer offer three Medicare Advantage health plans. Its D-SNP plan for those who are dual eligible for Medicare and Medicaid will still be available.

The decision is “disheartening,” Bruce Butler, CEO said in an announcement, but “we simply cannot continue to offer these plans at a loss…We have not been immune to the nationwide challenges in health care and as part of an integrated health system, we needed to evaluate how these plans are impacting the overall well-being and long-term sustainability of Samaritan Health Services.”

Louisiana-based Ochsner Health Plan will exit the Medicare Advantage market entirely.
In New Hampshire, Anthem and Martin’s Point will no longer offer individual Medicare Advantage plans and Aetna will no longer offer plans in most counties. The New Hampshire Insurance Department also warned that several other insurers will scale back the number of plans they will offer in 2026 or will narrow their service areas, resulting in fewer choices for many Medicare beneficiaries. These changes will impact approximately 77,000 residents. In some counties, WellSense and Humana will remain the only carriers in Coos County, but Humana will introduce new plan options in five counties.
Independence Blue Cross is scaling back in southeastern Pennsylvania, affecting thousands of seniors who are currently enrolled in one of its three Medicare Advantage PPO plans, according to the Philadelphia Business Journal. The reason? Rising costs. The publication reports that Independence will introduce one new option for seniors during open enrollment.

These announcements come in the wake of previous reporting by RISE that other Medicare Advantage insurers are pulling out of some markets, including UnitedHealth, Aetna, Humana, Sonder Health Plans, UCare, and Elevance Health.

Overall, Oliver Wyman, the global management consulting firm, reports that the total number of non-SNP Medicare Advantage-only and Medicare Advantage prescription drug plans will decline 10 percent from 3,719 plans in 2025 to 3,373 plans in 2026.

Why insurers are pulling back

The reasons for the withdrawal from Medicare Advantage are multifaceted but much has to do with finances. A recent report revealed that higher utilization of services since 2023 led to a $5.7 billion underwriting loss for the Medicare Advantage line of business in 2024.

Analysts from Oliver Wyman also say the latest exits are driven by the inability of insurers to control cost and quality due to wider networks, increasing financial risk, and operational complexity. “In contrast,” they wrote, “HMOs with tighter networks offer better cost predictability and management.”

Regulatory pressure is also a factor. Medicare Advantage plans have faced accusations of overbilling Medicare for services and denials of care while dealing with changes and challenges of Star rating measures, risk adjustment practices, and supplemental benefits.

Insurers expanding their footprint

Despite the wave of exits, some insurers see 2026 as a year of opportunity. They cite the growing Medicare population and the need for special needs plans.

RISE previously reported that SCAN Health Plan, one of the largest not-for-profit Medicare Advantage organizations, intends to expand into Washington state and broaden its presence in California and Texas. Through these expansions, SCAN will offer plans to nearly nine million Medicare-eligible seniors in its new service areas, while continuing to serve more than 310,000 members across 33 counties in six states: California, Arizona, Nevada, New Mexico, Texas, and Washington.

“In today’s environment, when many insurers are narrowing or exiting their Medicare Advantage offerings, SCAN is stepping up to serve communities that deserve the stability, compassion, and personalized care that come with a nonprofit health plan,” Karen Schulte, president of Medicare at SCAN Health Plan, said when the expansion was announced.

In recent weeks, other insurers announced expansion plans:

Chicago-based Health Care Service Corporation (HCSC) will debut MA plans in 30 states in 2026. Plans will be offered in Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas, Kentucky, Maryland, Missouri, Mississippi, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, and the District of Columbia.

In addition to Medicare Advantage, HCSC offers standalone Medicare prescription drug plans (PDP) in 48 states and Puerto Rico as well as Medicare Supplement plans in 48 states.

Stephen Harris, president of government markets at HCSC told Becker’s Payer Issues that though the economy is changing and there is reimbursement pressure, the company is taking a long-term view of the market. The country’s Medicare-eligible population is projected to surpass 70 million by 2030, he said.
Alignment Health has announced plans to offer new and enhanced plans in Southern California, Nevada, and Texas. In total, the organization will offer a total of 68 plan options across 45 counties in five states.
AmeriHealth Caritas is also expanding its Medicare Advantage footprint, focusing on dual-eligible populations, and leveraging its Medicaid infrastructure. The company’s offering will include new markets in metro-Detroit, South Carolina, North Carolina, southern Louisiana, and Delaware.

“We see tremendous potential in the D-SNP space as more of the Medicaid population becomes Medicare-eligible,” said AmeriHealth Caritas Medicare Markets President Chris McDade in the announcement. “By expanding our Medicare Advantage D-SNP offerings, we are empowering dual eligible members by providing them with more choices and improved care coordination. This leads to better health outcomes and a member experience tailored to their unique circumstances.”

Like AmeriHealth Caritas, more health insurers plan to offer special needs plans of SNPs, particularly for chronic conditions, in 2026.

While general Medicare Advantage plans will shrink in the upcoming year, SNPs will represent about one-third of all Medicare Advantage plans in 2026, up from just over a quarter in 2025, according to consulting firm ATI Advisory.

Indeed, 1, 797 SNPs will be offered in the upcoming year, a 33 percent increase from 2025. The expansion, the firm said, reflects the changing demographic in the United States and an increase in complex care needs.