The Medicare Advantage landscape is shifting, with slower growth overall and some major players reassessing their involvement. While enrollment in these private plans continues to rise, the pace has significantly decelerated, and insurers like UnitedHealth and Aetna are scaling back their Medicare offerings, while Humana is bucking the trend with continued expansion. This evolving dynamic reflects challenges within the program, including concerns about risk adjustment and government scrutiny of billing practices.
As of February 1, almost 35.5 million people were enrolled in a Medicare Advantage plan, a roughly 3% increase from the 34.4 million enrolled at the same time in 2025, according to modern federal data analyzed by STAT. This growth represents a marked slowdown compared to previous years. During the annual enrollment window, which runs from October 15 through December 7, enrollment increased by just 1%, signaling a potential plateau after years of rapid expansion.
Slowing Growth and Shifting Strategies
The recent growth rate is a stark contrast to the 7% to 10% annual increases seen between 2017 and 2024. This deceleration is prompting insurers to re-evaluate their strategies within the Medicare Advantage market. Several factors are contributing to this shift, including changes in how the government calculates risk scores – a system designed to compensate plans for enrolling sicker patients – and increased scrutiny of upcoding practices, where plans may inflate diagnoses to receive higher payments.
UnitedHealth Group and Aetna, both large players in the Medicare Advantage space, are reducing their participation in certain markets. Aetna, now part of CVS Health, is reportedly exiting Medicare Advantage plans in several states. UnitedHealth, while still the largest provider, has as well indicated a more cautious approach to growth. These decisions suggest a reassessment of the profitability and risk associated with offering Medicare Advantage plans, particularly in light of evolving regulations and payment models.
Humana’s Contrarian Approach
In contrast to the pullback by UnitedHealth and Aetna, Humana is continuing to expand its Medicare Advantage footprint. While specific details of Humana’s growth strategy weren’t available in the source material, the company’s continued investment in the program suggests a belief in its long-term potential. This divergence in strategy highlights the varying perspectives within the industry regarding the future of Medicare Advantage.
The Role of Risk Adjustment
A key factor influencing these decisions is the Centers for Medicare & Medicaid Services (CMS) efforts to refine the risk adjustment process. The agency is implementing changes to address concerns about inaccurate risk scores and ensure that payments accurately reflect the health status of enrollees. These adjustments aim to level the playing field and discourage upcoding, but they also create uncertainty for insurers and potentially reduce revenue for plans that have historically benefited from higher risk scores.
The CMS is also increasing audits and oversight of Medicare Advantage plans to identify and address instances of improper billing and coding. This heightened scrutiny is adding to the challenges faced by insurers and contributing to the slowdown in growth.
Impact on Beneficiaries
The changes in the Medicare Advantage market could have implications for beneficiaries. As some insurers reduce their offerings, beneficiaries may have fewer plan choices in certain areas. It’s crucial for individuals eligible for Medicare to carefully evaluate their options during the annual enrollment period and choose a plan that meets their specific healthcare needs. Resources are available through Medicare.gov to help beneficiaries compare plans and understand their coverage options.
Looking Ahead
The Medicare Advantage program remains a significant part of the healthcare landscape, covering a substantial and growing portion of the Medicare population. However, the recent slowdown in growth and the strategic shifts by major insurers signal a period of transition. The CMS is expected to continue refining the risk adjustment process and increasing oversight of the program. The next key date for updates will be the release of enrollment data for the 2027 plan year, expected in early 2027, which will provide further insight into the long-term trajectory of Medicare Advantage.
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