Medicare Advantage Plan Exits Surge: What It Means for Your Coverage

Medicare Advantage has spent two decades growing into the dominant way Americans over 65 receive their Medicare benefits — today, more than half of all Medicare beneficiaries are enrolled in a private Medicare Advantage plan rather than Original Medicare. But 2025 and 2026 have brought a jarring reversal: an unprecedented wave of insurer pullbacks, county-level exits, and outright plan terminations that is shaking the stability of a program millions of seniors depend on for their hospital, doctor, and prescription drug coverage.

The exits are not random. Insurers cite a combination of pressures that have made certain markets financially unsustainable. CMS has tightened its risk adjustment auditing — the process by which the federal government pays insurers more for sicker enrollees — reducing payments that plans had previously counted on. At the same time, medical utilization among Medicare Advantage enrollees surged post-pandemic, meaning plans paid out far more in claims than their actuaries projected. Add in new CMS marketing rules, stricter prior authorization oversight requirements, and a federal push to claw back billions in what regulators called inflated risk scores, and the business case for operating in lower-margin rural and suburban counties has weakened considerably for several large carriers.

For beneficiaries, the practical consequence is a notice in the mail — typically arriving in late September or early October — informing them that their plan will no longer be available in their county as of January 1. This notice triggers what CMS calls a Special Enrollment Period, or SEP. Specifically, when a Medicare Advantage plan terminates or exits your service area, you are entitled to a two-month SEP that allows you to enroll in a different Medicare Advantage plan or return to Original Medicare (Parts A and B). If you choose to return to Original Medicare, you also have the right to enroll in a standalone Part D prescription drug plan during that same window. The SEP typically runs from the date you receive your termination notice through the end of the month following the plan's last day of coverage — but the exact dates will be printed in your notice, and missing that window can leave you without drug coverage or facing late enrollment penalties.

The scale of the current disruption is significant. In 2025, several major insurers — including Humana, which announced it would exit dozens of markets — reduced their Medicare Advantage footprints substantially. UnitedHealthcare, the largest Medicare Advantage insurer in the country, also trimmed its county presence. Smaller regional plans have followed suit. The net result, according to analysis from the Kaiser Family Foundation, is that a meaningful share of current Medicare Advantage enrollees are in counties where their specific plan will no longer operate, forcing them into an active re-enrollment decision they may not have anticipated. In some rural counties, the number of available Medicare Advantage plans has dropped from five or six options to just one or two — or in the most affected areas, none at all.

If you receive a plan termination notice, your first call should be to 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, seven days a week. The representatives there can tell you exactly which plans are available in your ZIP code for the coming year, what their premiums are, and whether your current doctors and pharmacy are in-network. You can also use the Medicare Plan Finder tool at Medicare.gov to compare options side by side. When comparing plans in 2026, pay close attention not just to the monthly premium — many Medicare Advantage plans still advertise $0 premiums — but to the out-of-pocket maximum, which by law cannot exceed $9,350 for in-network services in 2026. A plan with a $0 premium but an $8,000 out-of-pocket maximum may cost you far more in a serious illness year than a plan with a modest premium and a $4,500 cap.

For beneficiaries who decide that the instability of Medicare Advantage is no longer worth the risk and want to return to Original Medicare permanently, the transition comes with an important caveat: Medigap. Original Medicare covers roughly 80% of approved costs, leaving you responsible for the remaining 20% with no annual cap. Most people returning to Original Medicare want to purchase a Medigap supplemental policy to cover that gap. The problem is that outside of specific guaranteed issue windows, Medigap insurers in most states can use medical underwriting — meaning they can charge you more or deny you coverage based on your health history. If you are returning to Original Medicare because your Medicare Advantage plan is being terminated, federal law does give you a guaranteed issue right to purchase certain Medigap plans (specifically Plans A, B, C, D, F, G, K, or L, depending on your state and when you first became eligible for Medicare) without medical underwriting. This right lasts for 63 days from the date your Medicare Advantage coverage ends. Do not let that window pass without acting.

Residents of certain states have additional protections worth knowing. If you live in California, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Missouri, Nevada, New Jersey, New York, Oklahoma, or Oregon, your state has a birthday rule that gives you a 30-day window each year around your birthday to switch Medigap plans without medical underwriting — regardless of whether your Medicare Advantage plan is being terminated. New York and Connecticut go further, requiring Medigap insurers to offer guaranteed issue year-round. If you are in one of these states and your plan is exiting, you may have more flexibility than the federal 63-day window alone provides. Contact your state insurance department to confirm the specific rules that apply to you.

The Annual Enrollment Period — running October 15 through December 7 each year — remains the primary window for all Medicare beneficiaries to review and change their coverage, regardless of whether their plan is exiting. Even if your plan is not terminating, the exits happening across the market are a signal to review your plan's 2026 Annual Notice of Change, which every Medicare Advantage and Part D plan is required to mail to enrollees by September 30. This document lists every change to your plan's premiums, deductibles, copays, drug formulary, and provider network taking effect January 1. In years of market disruption, these notices frequently contain significant cost increases or network changes that beneficiaries miss because they assume their plan is staying the same.

The broader policy question hanging over all of this is whether CMS will adjust its payment and audit policies to stabilize the Medicare Advantage market, or whether the current tightening reflects a deliberate effort to right-size a program that critics argue overpaid insurers for years. Congressional pressure is coming from both directions — some lawmakers want CMS to ease up on risk adjustment audits to keep insurers in the market, while others argue the audits are recovering taxpayer money that was improperly paid. For beneficiaries, the outcome of that policy debate will shape how many plan choices are available in their county for years to come. In the meantime, the most protective thing any Medicare beneficiary can do is treat every Annual Enrollment Period as a mandatory annual review — not an optional one — and keep their termination notice if they receive one, because the dates and plan codes printed on it are the starting point for every enrollment decision that follows.