Major changes are hitting the Medicare Advantage market, with approximately 5 million seniors forced to find new coverage as major insurers pull out of unprofitable regions.
Currently, about 35 million seniors are enrolled in Medicare Advantage plans operated by private insurers. However, as companies like UnitedHealth, Centene, and certain Blue Cross affiliates withdraw from specific markets, options and medical provider networks will shrink significantly in 2027.
Rural areas are taking the hardest hit. Next year, the number of counties with zero Medicare Advantage plans will surge to 187, up sharply from 118 this year. New Hampshire, North Dakota, and Oklahoma will also see their first counties completely devoid of any plans.
Subscriber burdens are also projected to grow. Some plans are raising not only monthly premiums but also specialist copays, prescription drug costs, and deductibles. Estimates indicate that the average annual out-of-pocket limit for standard plans will rise from about $5,000 in 2024 to around $6,600.
Changes are unfolding in California as well. For instance, 74-year-old residents in Santa Barbara will face a $30 monthly premium increase next year, while specialist visit costs will jump from $45 to $60.
Insurers cite shifting government payment policies and rising medical costs as the reasons for pulling back. Conversely, the Trump administration maintains that the Medicare Advantage market remains stable, noting that overall average premiums are lower and most regions still offer diverse choices.
Prescription drug coverage is shifting too. About 4 million individuals who previously used standalone Part D plans without a monthly premium will likely have to start paying premiums next year due to the expiration of temporary subsidies. The number of standalone Part D plans has also plummeted to 316, down to a third of the roughly 1,000 plans available in 2021.
Consequently, during this year’s open enrollment period, it has become especially crucial to look beyond monthly premiums and verify whether primary care doctors and hospitals are included in the new plan networks, as well as how prescription drug prices, copays, deductibles, and annual out-of-pocket limits will change.
