Medicare Advantage: Enrollment Trends, Plan Terminations & 2026 Outlook

After years of growth, enrollment in Medicare Advantage plans has begun to stabilize, even as the number of plans available to beneficiaries has slightly decreased. A new analysis from KFF finds that the vast majority of Medicare beneficiaries who experienced the termination of their Medicare Advantage plan at the end of 2025 will have access to another plan in 2026, but the shifts highlight ongoing changes in the Medicare Advantage landscape and potential challenges for some beneficiaries, particularly those in rural areas.

The KFF analysis, published this week, examines the options available to the 2.6 million people who lost Medicare Advantage coverage at the end of 2025 due to plan terminations. While concerns have been raised by Medicare Advantage insurers regarding changes to the Medicare Advantage payment system and proposed payment rates for 2027, the market remains largely accessible for those seeking coverage. Insurers have warned that these changes could lead to reduced benefits and higher costs, but the KFF report suggests a degree of resilience in the system.

Continued Enrollment Despite Plan Changes

The analysis found that a remarkable 98.9% of beneficiaries affected by plan terminations have at least one Medicare Advantage prescription drug (MA-PD) plan available to them in 2026. On average, these beneficiaries have a choice of 25 plans, offered by seven different firms. Importantly, over two-thirds (68.7%) can continue coverage with the same insurer through a different plan, while nearly a third (29.8%) have options from other insurers. Only a very small percentage – 1.1%, or less than 30,000 people – face a complete lack of MA-PD options in their area.

This availability of alternative plans is bolstered by the fact that virtually all Medicare beneficiaries can choose a zero-premium MA-PD plan, though this excludes the standard Part B premium all beneficiaries pay. The vast majority of plans (at least 98%) continue to offer benefits not covered by traditional Medicare, such as vision, dental, and hearing care. Rebate payments to plans, which are used to lower costs and fund extra benefits, are too expected to reach a record high, averaging over $2,600 per enrollee in 2026.

Impact on Smaller Insurers and Rural Areas

While the overall picture is positive, the impact of plan terminations wasn’t evenly distributed. Nearly half (49%) of those affected were covered by smaller insurers, suggesting these firms are more susceptible to market shifts. UnitedHealth Group, yet, still accounted for the largest share of terminations, affecting 20% of those losing coverage.

A significant disparity emerged based on geographic location. Medicare Advantage enrollees in rural areas were disproportionately affected, with nearly one in four (23%) of those in terminated plans residing in rural counties, compared to just 14% of all MA-PD enrollees. Plan terminations in rural areas were also more likely to result in a complete lack of MA-PD options in 2026. Specifically, 3% of rural beneficiaries affected by terminations had no alternative plans, compared to less than 1% in urban areas.

State-Level Variations

The impact of plan terminations varied considerably by state. Vermont experienced the most significant disruption, with over 90% of its Medicare Advantage enrollees in plans that were terminated. Wyoming, South Dakota, Idaho, New Hampshire, and North Dakota also saw high percentages of enrollees affected – all exceeding 60%. These states are largely rural and represent a small share of overall Medicare Advantage enrollment. Conversely, 12 states saw fewer than 5% of their enrollees impacted by plan terminations.

Understanding the Trend of Plan Terminations

The increase in plan terminations going into 2026 is linked to several factors. Rising healthcare utilization and slower growth in federal payments per enrollee have squeezed the margins of Medicare Advantage plans. This has prompted insurers to carefully evaluate their offerings, leading to plan discontinuations or service area reductions in an effort to stabilize profitability. Some insurers are also shifting their focus towards Special Needs Plans (SNPs), which cater to individuals with specific health needs or those dually eligible for Medicare and Medicaid. The number of SNPs offered has more than doubled since 2020.

The number of MA-PD plans available to beneficiaries has declined from a peak of 36 in 2024 to 32 in 2026, reflecting this consolidation. The expansion of extra benefits, previously fueled by increased rebate payments, has slowed, with a smaller proportion of plans offering over-the-counter allowances and meals following hospital stays.

What This Means for Beneficiaries

For those affected by plan terminations, the KFF analysis offers reassurance that alternative coverage is generally available. However, switching plans can signify changes in benefits, provider networks, and cost-sharing arrangements. Beneficiaries should carefully compare plans to ensure they find one that meets their individual needs.

Those who choose to return to traditional Medicare have the option to purchase a Medigap policy to supplement their coverage, and they have a guaranteed issue period to do so, meaning insurers cannot deny coverage or charge higher premiums based on pre-existing conditions. However, Medigap policies arrive with additional monthly premiums, which averaged over $200 in 2023.

Looking ahead, continued monitoring of Medicare Advantage enrollment and plan availability will be crucial. CMS will be releasing updated data and considering the impact of proposed payment changes for 2027. Beneficiaries should stay informed about their options and consult with Medicare counselors or qualified healthcare professionals to develop informed decisions about their coverage.