If you have been enrolled in a Medicare Advantage plan for several years and assumed your coverage would quietly renew each fall, 2025 and 2026 have delivered a jarring reality check. The Medicare Advantage market is going through one of its most turbulent stretches since the program expanded in the early 2000s. A growing number of insurers are exiting entire counties, states, or market segments, and the beneficiaries caught in the middle are facing real disruptions to their doctors, their drug costs, and the out-of-pocket budgets they have carefully built their retirements around.
The financial forces driving these exits have been building for years. Medicare Advantage insurers receive a fixed monthly payment from the federal government for each enrollee, calculated through a risk-adjustment formula that is supposed to reflect how sick or healthy that person is. The Centers for Medicare and Medicaid Services has spent the past several years tightening those payments after audits revealed that some insurers had been overcoding patient diagnoses to inflate reimbursements. At the same time, medical utilization surged after the COVID-19 pandemic as patients caught up on delayed procedures and screenings. Insurers that had priced their plans aggressively to attract members found themselves losing money on those same members. The response has been to cut supplemental benefits, raise cost-sharing, or exit markets entirely rather than absorb ongoing losses.
Humana, one of the three largest Medicare Advantage carriers in the country, announced it would exit multiple markets affecting an estimated 560,000 enrollees as part of a broader restructuring of its Medicare Advantage business. UnitedHealthcare, the single largest Medicare Advantage insurer nationally, has trimmed its footprint in certain counties and reduced supplemental benefits such as dental allowances and over-the-counter product credits that had become major selling points. Smaller regional carriers have followed the same pattern. According to CMS.gov data, more than 3,800 Medicare Advantage plans were offered nationally for 2024, but plan availability and benefit richness have begun contracting as insurers recalibrate. The average Medicare Advantage plan premium for 2025 is approximately $17 per month — a figure that sounds reassuring but masks meaningful increases in copayments, deductibles, and annual out-of-pocket maximums that determine what you actually pay when you get sick.
For beneficiaries whose plans are being discontinued, the most important thing to understand is that you are not simply dropped into a void. Federal rules require your insurer to notify you by October 1 of the year before the change takes effect. That notice triggers a Special Enrollment Period running from October 1 through November 30, during which you can switch to a different Medicare Advantage plan or return to Original Medicare Parts A and B. If you choose to return to Original Medicare during this SEP, you also gain a guaranteed-issue right to purchase a Medigap supplemental policy — meaning the insurer cannot deny you coverage or charge you more based on your health history. This is a critically important and time-limited right. If you have diabetes, heart disease, or any other chronic condition that would normally make you uninsurable in the Medigap market, this window may be the only opportunity you have to lock in comprehensive supplemental coverage without medical underwriting. Contact your State Health Insurance Assistance Program, known as SHIP, as soon as you receive your discontinuation notice. SHIP counselors provide free, unbiased guidance and can be found at shiphelp.org.
The Annual Enrollment Period, which runs every year from October 15 through December 7, is the primary window when all Medicare beneficiaries — not just those whose plans are exiting — can review and change their coverage. Changes made during AEP take effect January 1 of the following year. If you miss AEP, the Open Enrollment Period runs January 1 through March 31 and allows Medicare Advantage enrollees to switch to a different Medicare Advantage plan or return to Original Medicare one time. However, the OEP does not carry the same Medigap guaranteed-issue rights that a plan-exit SEP provides. The timing of when you act genuinely determines what options are available to you, so do not treat these windows as interchangeable.
One of the most consequential decisions you may face if your plan exits is whether to stay in the Medicare Advantage system or return to Original Medicare paired with a Medigap policy. Medicare Advantage bundles hospital, medical, and often drug coverage into a single plan, typically with low or zero premiums but with network restrictions and cost-sharing that can accumulate quickly during a serious illness. Original Medicare lets you see any doctor or hospital in the country that accepts Medicare — which is the vast majority of providers — but it has no annual out-of-pocket cap on its own. A Medigap policy fills those gaps. The most comprehensive option widely available, Plan G, covers nearly all cost-sharing after the Part B deductible, which is $257 in 2025. Medigap Plan G premiums vary by age, gender, tobacco use, and location, but many beneficiaries in their late 60s pay between $100 and $180 per month. That is a real monthly expense, but it buys predictability — something that is increasingly scarce in a Medicare Advantage market that is repricing and restructuring year over year.
If you decide to stay in Medicare Advantage, the plan comparison process deserves far more attention than most people give it. The Medicare Plan Finder tool at Medicare.gov allows you to enter your zip code, your current doctors, and your prescription drugs to generate a personalized cost estimate for every plan available in your area. Do not anchor on the monthly premium. Look at the plan's annual out-of-pocket maximum, which in 2025 can range from under $3,000 to the federal in-network cap of $9,350. A plan with a $0 premium and a $9,350 out-of-pocket maximum is a fundamentally different financial proposition than a plan with a $50 monthly premium and a $3,400 maximum if you end up needing surgery, chemotherapy, or extended rehabilitation. Also verify that your specific medications are on the plan's formulary and at what cost tier — a single maintenance drug moving from Tier 2 to Tier 3 can add $300 to $600 to your annual costs without any change in your health.
Star ratings are another useful but imperfect tool. CMS rates Medicare Advantage plans on a 1-to-5 star scale based on quality measures including member satisfaction, chronic disease management, and customer service responsiveness. Plans rated 4 stars or above are generally considered high-performing. According to CMS.gov data, approximately 57% of Medicare Advantage enrollees were in plans rated 4 stars or higher for 2024, though the distribution of high-rated plans varies considerably by state and county. A 5-star plan carries a special enrollment privilege worth knowing about: you can switch into a 5-star plan at any time during the year, outside of normal enrollment windows. This can serve as a useful escape hatch if your current plan is performing poorly mid-year and you cannot wait for AEP.
State-level variation in the Medicare Advantage market is real and consequential. In densely populated states like Florida, California, and Texas, beneficiaries typically have dozens of plan options within their county, giving them genuine alternatives when a carrier exits. In rural states and rural counties within otherwise urban states, the market can be far thinner — sometimes just one or two plans available. An insurer exit in a rural county can leave beneficiaries with almost no Medicare Advantage alternatives, which makes the case for evaluating Original Medicare plus Medigap considerably stronger. Network adequacy is also a more acute problem in rural areas, where Medicare Advantage plans have fewer contracted providers and prior authorization requirements can create real barriers to specialist care.
Data Snapshot: According to CMS.gov enrollment data, Medicare Advantage covered approximately 33.8 million beneficiaries as of early 2024, representing more than 54% of the total Medicare population — up from roughly 42% just five years earlier. The same CMS data shows that the number of plans available per county has begun declining after years of expansion, with some rural counties seeing net reductions of two to four plan options between the 2024 and 2025 plan years. The average out-of-pocket maximum across all Medicare Advantage plans for 2025 is approximately $4,900 for in-network services, according to CMS plan benefit data, though the range is wide and beneficiaries in lower-rated plans tend to face higher exposure.
The financial pressure on Medicare Advantage insurers is not resolving quickly. CMS has signaled continued scrutiny of risk-adjustment practices, and payment rate updates for 2025 and 2026 have not fully offset rising medical costs in the way insurers had projected. Industry analysts expect additional market exits and benefit reductions in the 2026 plan year. This does not mean Medicare Advantage is collapsing — the program still covers the majority of Medicare beneficiaries and offers genuine value for many enrollees, particularly those who are relatively healthy, live in areas with strong plan competition, and value the simplicity of bundled coverage. But the era of ever-expanding supplemental benefits and zero-premium plans that seemed almost too good to be true is giving way to a more sober market reality, and beneficiaries who assumed their coverage would stay stable are learning that assumption is no longer safe.
The most practical step you can take right now, regardless of whether your plan has announced an exit, is to treat this year's Annual Enrollment Period as a genuine review rather than a rubber stamp. When your plan's Annual Notice of Change arrives in late September, read it carefully — it details every change to premiums, cost-sharing, drug formulary, and provider network for the coming year. Compare those changes against alternatives on Medicare.gov's Plan Finder. If you want personalized, unbiased help at no cost, contact your local SHIP counselor at shiphelp.org or call 1-800-MEDICARE at 1-800-633-4227, available 24 hours a day. The instability in the Medicare Advantage market is real, but beneficiaries who stay informed and act within the right enrollment windows have meaningful tools to protect themselves.