2026: Another Tough Year for Medicare Advantage Plans

These recent headlines all tell the same story:

• Medicare Advantage plans are scaling back

• More insurers expect to pull some Medicare Advantage plans from the market

• Medicare Part D premiums are likely to go up next year. Here's why.

• Insurers pull Medicare Advantage plans as profit pressures mount

And the story is this: Plan year 2026 is shaping up to be another disruptive year for Medicare Advantage (MA) plans.

Major Challenges Being Faced by Medicare Advantage Plans Nationwide in 2026

The major challenges facing MA plan benefits in plan year 2026 include insurer business adjustments due to profit pressures, uncertainty over some policy changes, and shifting benefit structures. While government payments to MA plans are increasing significantly, many insurers are cutting supplemental benefits and exiting unprofitable markets to maintain profitability.

• Financial Pressures and Market Exits: Profit pressures are driving large insurers to exit certain markets, reduce plan offerings, and scale back supplemental benefits in response to rising healthcare costs and tighter federal oversight of MA spending. Insurers such as UnitedHealthcare, Aetna, and Humana have announced exits from less profitable markets, affecting hundreds of thousands of beneficiaries.

• Payment Rate Changes: CMS finalized a payment increase of approximately 5-7% for MA plans in 2026, partly to keep up with the growth in Medicare per capita costs. Despite this increase, payment reforms—such as updates to risk adjustment models—continue to create revenue uncertainty for plans that may offset planned increases.

• Benefit Reductions and Plan Design Shifts: Some plans are cutting supplemental benefits, raising deductibles, or replacing copays with coinsurance, impacting the overall richness of MA benefits. Provider network changes and reduced plan choices may also affect consumers in some markets.

• Policy and Regulatory Uncertainty: CMS has yet to finalize key provisions on prior authorization, utilization management, and health equity analysis, creating uncertainty for plan administrators and advocates. Regulatory focus on protecting beneficiaries and increasing transparency could further constrain MA plan benefit designs in the future.

Known Changes Affecting Florida Medicare Advantage Markets

Local agents like me are starting to get details about what will be happening in our local markets with the major MA carriers. We are restricted from disclosing specific details until October 1st, but here are some generally known and widely reported changes we will be seeing here in Southeast Florida:

• More MA PPOs will be terminated for 2026. Remember last year, UnitedHealthcare terminated its local PPO (LPPO) in Dade and Broward Counties. For 2026 we will see more carriers terminating their PPOs in our area.

• One carrier that serves the Florida MA market exclusively will exit the Medicare MA market entirely in 2026 leaving thousands having to find plans with other carriers.

Silver Lining in MA Plan Termination Cloud!

If you are among those that get a plan termination letter from your carrier, yes, there is a silver lining! Involuntary disenrollment from an MA plan gives you a guaranteed issue right to a Medicare Supplement! For more about that, see my article: You May Have a Guaranteed Issue Right to a Medicare Supplement for 2026!

What Does This All Mean for MA Plans in 2026?

Right now, we don't have all the details about 2026 MA plans. Officially, plan year 2026 details won't be released to the public until October 1st. Let me reassure you that I will be studying the plan changes and working with my MA plan clients to find the best fit for each of them for the 2026 plan year. In the meantime, feel free to contact me with questions.