Medicare Advantage has been one of the fastest-growing corners of American health insurance for two decades, but the program is now facing a significant period of instability. A rising number of insurers — including some of the largest names in the business — have been pulling plans out of counties, regions, and entire states, leaving millions of beneficiaries to scramble for new coverage. This isn't a minor reshuffling. The scale of plan exits in recent enrollment cycles represents the most turbulent period Medicare Advantage has seen since the program expanded under the Medicare Modernization Act of 2003, and the ripple effects are being felt in living rooms, doctor's offices, and pharmacy counters across the country.
To understand why this is happening, you need to follow the money. Medicare Advantage plans are paid a fixed monthly amount per enrollee by the federal government, based on a formula that accounts for the enrollee's health status and local costs. In recent years, insurers argued that CMS — the Centers for Medicare & Medicaid Services — underpaid them relative to what their members actually cost to treat. Post-pandemic utilization surged as people who had delayed care during COVID-19 finally sought treatment, driving up claims costs dramatically. At the same time, CMS updated its risk-adjustment models, which some insurers said reduced their payments. The result: profit margins collapsed at several major carriers, and the response has been to exit markets where the math no longer works.
The exits have not been evenly distributed. Rural counties and lower-income urban areas have been hit hardest, because those markets tend to have thinner margins to begin with and fewer competing plans to absorb displaced enrollees. In some rural counties, beneficiaries who had two or three Medicare Advantage options just a few years ago now have one — or none. When a county drops to zero Medicare Advantage plans, beneficiaries are automatically transitioned back to Original Medicare, which means they suddenly face the full weight of Medicare's cost-sharing structure: a $1,676 Part A hospital deductible per benefit period in 2025, a $257 monthly Part B premium for many enrollees, and no cap on out-of-pocket costs for hospital stays.
For beneficiaries who receive a notice that their Medicare Advantage plan is leaving their area, the most important thing to know is that you are entitled to a Special Enrollment Period, or SEP. This SEP typically gives you 63 days from the date your plan terminates to enroll in a new Medicare Advantage plan or return to Original Medicare. You also have a guaranteed right to purchase certain Medigap plans — specifically Plans A, B, C, F, K, or L — without medical underwriting during this SEP, regardless of your health status. This guaranteed-issue right is one of the most valuable protections in Medicare law, and it has a strict deadline. Missing that 63-day window can mean losing the ability to get Medigap coverage without answering health questions, which could result in denial or higher premiums if you have conditions like diabetes, heart disease, or a history of cancer.
The Medigap question is where things get complicated for many beneficiaries who have been in Medicare Advantage for years. If you joined a Medicare Advantage plan when you first became eligible for Medicare, you likely had a guaranteed-issue right to Medigap at that time but didn't use it. Now, if your plan exits and you want to return to Original Medicare with a Medigap supplement, most states will require you to go through medical underwriting — meaning insurers can review your health history and potentially charge you more or deny you coverage. The exceptions are states with guaranteed-issue protections year-round or birthday-rule windows. In New York and Connecticut, Medigap is guaranteed issue at any time, regardless of health status. In California, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Missouri, Nevada, New Jersey, Oklahoma, and Oregon, the birthday rule gives you a 30-day window each year around your birthday to switch Medigap plans without underwriting — though this applies to switching between Medigap plans, not necessarily to first-time Medigap enrollment after a plan exit. If you live in one of these states, contact your State Health Insurance Assistance Program, known as SHIP, to understand exactly what protections apply to your situation.
For beneficiaries who can find a new Medicare Advantage plan in their area, the Annual Enrollment Period running from October 15 through December 7 each year is the primary window to make a switch, with coverage starting January 1. If your plan has already announced it is exiting for the coming year, you should receive a notice by October 1, giving you time to shop during AEP. The Medicare Plan Finder tool at Medicare.gov allows you to enter your zip code, list of prescriptions, and preferred doctors to compare plans side by side. Pay close attention not just to the monthly premium — many Medicare Advantage plans still advertise $0 premiums — but to the plan's maximum out-of-pocket limit, which in 2025 can be as high as $9,350 for in-network services and $14,000 for combined in- and out-of-network costs. A plan with a $0 premium but an $8,000 out-of-pocket cap is a very different financial proposition than one with a $50 monthly premium and a $3,500 cap.
Stability of the plan itself is another factor worth researching before you enroll. CMS publishes Star Ratings for Medicare Advantage plans on a scale of 1 to 5 stars, updated annually. Plans with 4 or 5 stars generally have better track records for customer service, care coordination, and handling appeals. They also receive bonus payments from CMS, which can make them more financially sustainable. Plans with 2 or 3 stars are more likely to face financial pressure and, in some cases, may be at higher risk of future exits or benefit reductions. While Star Ratings are not a guarantee of future behavior, they are one of the best publicly available signals of plan quality and operational health.
The broader policy debate around these exits is intensifying in Washington. Insurers have lobbied CMS and Congress to increase payment rates and slow the pace of risk-adjustment changes. Consumer advocates, meanwhile, have pushed back, arguing that some insurers inflated their risk scores for years — a practice CMS has been trying to correct — and that the current exits are partly a consequence of that correction. CMS finalized its 2026 payment rates earlier this year, and while the agency characterized the update as an overall increase, several major insurers said the rates were still insufficient to cover their costs in certain markets. The tension between adequate insurer payments and protecting beneficiaries from market instability is unlikely to be resolved quickly, which means plan exits may continue to be a feature of the Medicare Advantage landscape for the foreseeable future.
If you are currently in a Medicare Advantage plan and have not received an exit notice, that does not mean you are immune to disruption. Plans can also reduce benefits, narrow their provider networks, raise cost-sharing, or drop drug coverage between plan years — all without triggering the same guaranteed-issue Medigap rights that a full plan exit does. This is why reviewing your Annual Notice of Change, which plans are required to mail to you by September 30 each year, is so important. The notice will detail any changes to your premiums, deductibles, copays, drug formulary, and network for the coming year. Many beneficiaries toss this document without reading it, only to discover in January that their insulin now costs more, their cardiologist is out of network, or their plan has added a prior authorization requirement for a medication they take regularly.
For beneficiaries who want to reduce their exposure to this kind of year-to-year volatility, Original Medicare combined with a Medigap supplement and a standalone Part D drug plan offers a more stable — though often more expensive — alternative. Original Medicare covers the same services nationwide, your provider network is essentially any doctor or hospital that accepts Medicare (which is the vast majority), and your Medigap benefits cannot be changed or taken away as long as you pay your premiums. The tradeoff is cost: a Medigap Plan G, which is the most comprehensive option available to new Medicare enrollees in 2025, typically runs between $100 and $300 per month depending on your age, gender, location, and the insurer, on top of your Part B premium. But for beneficiaries who use significant healthcare services or who simply want predictability, that cost may be well worth it compared to the uncertainty now surrounding many Medicare Advantage plans.
Your State Health Insurance Assistance Program offers free, unbiased counseling to help you compare your options. SHIP counselors are trained on both Medicare Advantage and Original Medicare and can walk you through the Plan Finder, explain your Medigap rights, and help you understand any notices you have received from your current plan. To find your local SHIP, visit shiphelp.org or call 1-800-MEDICARE. Given the current instability in the Medicare Advantage market, this is not a year to make enrollment decisions based on last year's plan or a neighbor's recommendation — the landscape has changed enough that a fresh review of your options could make a meaningful difference in both your coverage and your costs.