Medicare Advantage enrollment drops in 7 states for the first time: 9 points

The growth of Medicare Advantage plans is showing signs of slowing down as payers shift their focus to margins over membership, leading to enrollment declines in some states for the first time ever. A recent report from HealthScape Advisors and Chartis, released on February 26, analyzed CMS data from 2022 through 2026 and conducted surveys with government program leaders from over 35 health plans in January 2026 to evaluate the current market trends.

According to the report, Medicare Advantage enrollment only grew by 2.5% in 2026, reaching a total of 35.4 million beneficiaries, a decrease from the previous year’s 3.6% growth rate. Notably, seven states experienced a decline in MA enrollment for the first time, including Vermont, Wyoming, New Hampshire, Idaho, Minnesota, Maryland, and South Dakota. These declines were primarily driven by health plan exits and market retreats rather than changes in beneficiary preferences.

While MA enrollment saw a modest increase, traditional Medicare enrollment saw a boost of 600,000 beneficiaries in the same year, marking a reversal of previous years’ decline. Stand-alone prescription drug plan enrollment also rose by 1.7 million members as fewer seniors chose MA coverage. Growth in the MA market was disproportionately concentrated among a few key players, with Humana experiencing a 21% increase in membership, while UnitedHealthcare and Aetna scaled back their offerings. Newer plans such as Devoted Health, Alignment Healthcare, and Clover Health now account for a larger share of the MA market.

Special needs plan enrollment saw a notable growth of 12.2%, driven by chronic condition SNPs, which saw a 49% increase and now serves 1.6 million members. Major players like Humana, UnitedHealthcare, and Elevance collectively dominate about 76% of the C-SNP market. However, total plan offerings decreased for the third consecutive year, with non-SNP plan options dropping by 8.6% and PPO offerings decreasing by 10%. Despite insurers shifting towards HMOs for cost management, 43% of seniors opted for PPO plans in 2026.

Furthermore, only 67% of MA enrollees are in plans rated four stars or higher, a decline from earlier years. Just 2% of members are enrolled in 5-star plans, down from 8% in 2024. According to the survey, 69% of MA leaders expect their enrollment to remain flat or decrease in 2027. Additionally, 70% anticipate offering fewer benefits next year, signaling a shift towards cost containment strategies among health plans in the MA market. However, despite short-term challenges, none of the surveyed leaders indicated a negative outlook for the MA market over the next five years.

The report recommends that health plans make clear decisions regarding staying or exiting certain markets, develop multi-year profitability strategies, evaluate the return on investment of benefits offered, strengthen key provider partnerships, and actively engage in policy sustainability discussions to ensure long-term success in the Medicare Advantage market.