Carriers are dropping Medicare Advantage plans for 2027. Why it is happening, and what it means if yours is one of them.

How many plans are actually going away?

More than in a normal year, and the announcements have stacked up since July.

Humana said on its July 29, 2026 earnings call that it is exiting additional Medicare Advantage plans for 2027, affecting roughly 600,000 members, about 8 percent of its 7.2 million Medicare Advantage enrollment. It is the second consecutive year the company has pulled back; it shed roughly 500,000 members in 2025 and narrowed its 2026 footprint to 46 states.

Humana is the largest single announcement but not the only one. Reporting through August and September described reductions at several national and regional carriers, including county-level trims at UnitedHealthcare and full or near-full exits at some smaller plans. Industry estimates of the total number of people affected across all carriers have run into the millions, though those figures are projections rather than confirmed counts.

What none of that tells you is whether your plan is affected. Medicare Advantage is sold county by county. A carrier cutting plans aggressively in one state may leave your county untouched, and a carrier nobody is writing about may be dropping the specific plan you are in. The only document that answers the question is the letter your carrier sends you.

Why are carriers doing this?

The short version: the payment carriers receive is growing more slowly than the cost of the care they pay for, and they are responding by dropping the plans where that gap is widest.

CMS finalized an average payment increase of 2.48 percent for Medicare Advantage in 2027, worth more than $13 billion across the industry. More than 100 organizations had urged the agency to go higher, arguing the near-flat proposal would drive exactly the plan exits now happening. Carriers say the increase does not cover their medical cost growth.

Three things follow from that, and they explain the shape of the cuts:

• The least profitable plans go first. Humana said most of its exiting plans carry star ratings of 3.5 or lower, which is a margin decision rather than a strategic retreat from Medicare Advantage.
• Rural and low-density counties are hit hardest. Enrollment is thin, provider networks are expensive to maintain, and there is less room to absorb a bad year.
• Concentration makes it worse. Two carriers account for a large share of national enrollment, so in counties where they dominate, one carrier’s decision can meaningfully shrink the number of real options.

None of this means Medicare Advantage is going away. Enrollment is still growing overall. The map is being redrawn, and if your county is part of the redraw it does not much matter what the national trend is.

What does a termination actually mean for you?

First, a distinction that matters. A non-renewal notice is not an Annual Notice of Change. The ANOC describes what changes about a plan you can keep. A non-renewal says the plan will not exist next year. Both arrive around the same time and they are easy to confuse.

You do not lose Medicare. Parts A and B continue. What ends is the private plan that has been administering your benefits. On January 1 you would return to Original Medicare, which by itself has no drug coverage and no annual limit on what you pay.

That is the problem with doing nothing, and it has a specific cost: going 63 days or more without creditable drug coverage triggers a Part D late enrollment penalty that is added to your premium permanently.

The right most people never use

Here is the part that gets buried, and it is the reason this post exists.

When your plan terminates, you generally gain a guaranteed-issue right to buy certain Medigap policies. Guaranteed issue means the insurer cannot ask about your health, cannot decline you, and cannot impose a waiting period for pre-existing conditions.

Outside of specific windows like this one, most states let Medigap insurers underwrite. They review your history and can charge more or say no. We wrote about that asymmetry in Medicare Advantage vs Medigap: moving into Medicare Advantage is always allowed, and moving back may not be.

A plan termination reopens that door. Briefly.

Those are two different clocks and the shorter one is the valuable one. People use the special enrollment period to pick a replacement Medicare Advantage plan, feel they have handled it, and let the Medigap window close without ever knowing it was open.

The qualifying Medigap plan letters under guaranteed issue are limited rather than the full menu, and Plans C and F are only available to people who became eligible for Medicare before January 1, 2020. State rules vary. This is worth ten minutes with someone who knows your state’s rules before the 63 days run out.

How the decision actually gets made inside a carrier

It helps to understand that a plan exit is rarely a judgment about you, your county, or Medicare Advantage as a concept. It is arithmetic done at the plan level, a year in advance.

Every spring, carriers submit bids to CMS for the following year. The bid says what the carrier expects it will cost to provide Medicare-covered benefits to an average member in that service area, and CMS compares it to a regional benchmark. Bid below the benchmark and the carrier keeps a share of the difference as a rebate, which is what funds the dental, vision, over-the-counter and fitness extras that make a plan attractive. Bid above it and the member pays the difference as a premium, which makes the plan hard to sell.

So each plan has to work on its own. A carrier can be profitable nationally and still have individual plans that lose money, and that is exactly the situation the last two years have produced.

Four pressures have been stacking up:

• Utilization came back. After the pandemic suppressed elective care, members returned to procedures that had been deferred, and costs ran above what carriers had priced.
• Risk-adjustment changes. CMS has been phasing in a revised risk model and tightening audits of how carriers document member conditions, which reduced revenue on some books of business.
• Star ratings. Bonus payments are tied to quality scores. A plan that slips below 4 stars loses bonus dollars, which can turn a thin margin negative. Humana said most of the plans it is exiting for 2027 are rated 3.5 or lower.
• The benchmark itself. Payment growth of 2.48 percent for 2027 sits below the medical cost trend carriers say they are seeing.

When a plan cannot be made to work, a carrier has three options: cut benefits, raise the premium, or stop offering it. The first two cost them members anyway and damage star ratings. The third is cleaner, and it is what you are seeing.

Why your county and not the next one

Medicare Advantage is priced and sold county by county, which is why national headlines are close to useless for answering a personal question.

The benchmark CMS sets varies by county, based partly on what Original Medicare historically costs there. A county with high Medicare spending gets a higher benchmark, which gives carriers more room. A county with low spending gets a lower one, and the same plan design that works one county over stops working.

Population density compounds it. Building a provider network takes the same negotiating effort whether 800 people enroll or 80,000, and in a thin county the fixed cost never gets spread. That is why rural counties lose plans first, and why some states have seen far steeper declines than others.

Market concentration does the rest. Where two carriers hold most of the enrollment, one of them pulling out does not shift members to a competitor. It can cut the number of real options in half.

Why you should not simply accept the replacement plan

Carriers commonly move displaced members into another of their own plans, and that plan will be presented as the natural next step.

Sometimes it is fine. But it is a different plan: different network, different formulary, different cost sharing, possibly different prior authorization rules. Humana has said publicly that it expects to recapture roughly 40 percent of affected members into its other plans, which tells you how the process is designed to work.

And accepting it by default is a decision about the Medigap door as well. Enrolling in another Medicare Advantage plan does not automatically forfeit a guaranteed-issue right, but it does start you down a path where the 63-day clock keeps running while you feel the problem is solved.

What to do, in order

The deadline for changes that start January 1 is December 7, during the Annual Enrollment Period. A termination gives you more time than that, but more time to pick a plan is not more time to buy a Medigap policy.

What if your plan is not ending?

Read the Annual Notice of Change anyway. The bigger 2027 story for most people is not termination, it is quieter change: a doctor leaving the network, a drug moving tiers, an allowance shrinking, a copay going up.

Carriers under margin pressure adjust the plans they keep as well as cutting the ones they drop. On the drug side, the federal subsidy that held down standalone Part D premiums ended after 2026, which we covered in why your 2027 Part D premium is going up.

The market is moving more than usual this year. That is a reason to read your mail, not a reason to panic. If you want help working out what your letter actually means, that is what we do.