Leading health insurers announced Wednesday that they will scale back their Medicare Advantage offerings next year as the health insurance industry braces for decreases in government reimbursement.
The U.S. government has been cutting back payments on Medicare Advantage since 2024 to reduce spending. Medicare Advantage is a privately-run insurance program that serves people aged 65 and above as well as those with disabilities.
CVS Health’s Aetna insurance business said its prescription drug plans will be available in 100 fewer counties than what is available in 2025, while Humana will scale back the availability of its plans to 85% of counties, down from 89% this year. UnitedHealth said it will stop operating in 109 counties, which will affect about 180,000 people.
UnitedHealth manages the largest Medicare Advantage business, while Humana ranks second and CVS Health’s is the fourth-largest.
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Insurers have said that higher-than-expected usage of medical services in their Medicare businesses has prompted the moves to exit less profitable markets, while they’re also receiving fewer payments from Medicare related to patients’ health conditions.
“The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs and increased utilization have created headwinds that no organization can ignore,” said UnitedHealth’s Bobby Hunter, who runs the company’s government programs, in a Tuesday press briefing.
CVS CAREMARK DROPS COVERAGE OF POPULAR WEIGHT LOSS DRUG
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UNH | UNITEDHEALTH GROUP INC. | 353.97 | +5.76 | +1.65% |
| HUM | HUMANA INC. | 255.58 | +8.85 | +3.59% |
| CVS | CVS HEALTH CORP. | 77.08 | +0.23 | +0.29% |
The leading insurers are also exiting some states altogether as they confront reduced government compensation and increased costs from rising use.
Humana will provide plans in 46 states in 2026, down from 48 this year. Aetna is set to offer plans in 43 states and 2,159 counties next year, down from 44 states and 2,259 counties this year.
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Insurers are also changing their plan offerings. Humana intends to offer new plan types in four states in 177 counties, and 83% of its standalone prescription drug plans in 2026 will have decreased premiums.
CVS Health plans to expand its offerings for people who qualify for both Medicare and the Medicaid program for low-income Americans to 16 new states.
Hunter said that UnitedHealth’s decision to shut down over 100 plans will affect about 600,000 members who are largely enrolled in preferred provider organizations or those that give members an option to see providers outside a plan network.
Reuters contributed to this report.
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