Medicare Advantage plans are pulling back. For the first time in nearly 20 years, seniors face fewer plan choices and skimpier benefits heading into 2026. STAT News reports insurers are scaling back offerings as care costs climb, making this October’s open enrollment period substantially more complicated than previous years.
If you’re among the millions enrolled in Medicare Advantage—or considering it—this affects your wallet directly. Plans that once featured zero-dollar premiums and generous benefits are disappearing. Diane Omdahl, president of consulting firm 65 Incorporated, put it bluntly: “Those people in Medicare Advantage who have pretty much had a stable, easy way to go through open enrollment? Not this year.”
Open enrollment starts October 15, 2025. Here’s what changed and what you need to do about it.
Why Are Medicare Advantage Plans Disappearing?
Two words: rising costs. Healthcare expenses have climbed faster than insurers anticipated, forcing private companies offering Medicare Advantage to make cuts. The specific mechanisms:
- Medical inflation outpaced premium revenue. Hospital services, prescription drugs, and specialist care all cost more in 2025 than insurers projected when they designed 2024 plans.
- Utilization increased. More beneficiaries used their benefits—particularly post-pandemic delayed care—straining plan finances.
- Federal payment rates didn’t keep pace. The government sets base rates for Medicare Advantage plans. When those rates grow slower than medical costs, insurers absorb losses or exit markets.
The result? Insurers dropped unprofitable plans and trimmed benefits on surviving ones. Some markets lost half their available options between 2025 and 2026.
What Exactly Got Cut?
Benefit reductions vary by insurer and region, but patterns emerged across the country. Zero-premium plans—the marketing hook that drove explosive Medicare Advantage growth—are vanishing. Many plans that remain now charge monthly premiums ranging from $25 to $75 depending on your county.
Coverage gaps widened too:
- Prescription drug tiers shifted upward, moving common medications from generic copays ($5–$10) to preferred brand copays ($40–$60).
- Dental and vision benefits got trimmed—fewer covered procedures, lower annual maximums, higher copays for frames and exams.
- Out-of-pocket maximums increased on some plans by $500–$1,000, meaning you’ll pay more before catastrophic protection kicks in.
- Provider networks narrowed. Some plans dropped hospitals or specialist groups to reduce costs, limiting where you can get care without prior authorization.
Not every plan cut every benefit. But if you auto-renew your current plan without reviewing alternatives, you might miss that your 2026 coverage looks substantially different than 2025.
707,000 Beneficiaries Face Plan Terminations
Some insurers didn’t just reduce benefits—they exited entire markets. According to Centers for Medicare & Medicaid Services preliminary data, approximately 707,000 Medicare Advantage enrollees received termination notices because their insurer discontinued service in their county.
These beneficiaries must select a new plan during open enrollment or revert to Original Medicare (Parts A and B). The deadline matters: December 7, 2025. Miss it, and you’ll default to Original Medicare on January 1, 2026—potentially without supplemental drug coverage unless you also enroll in a standalone Part D plan.
| Situation | Action Required | Deadline |
|---|---|---|
| Current plan terminated | Select new MA plan or switch to Original Medicare + Part D | Dec 7, 2025 |
| Current plan still offered | Review 2026 benefits; compare alternatives | Dec 7, 2025 |
| Considering Medicare Advantage for first time | Compare MA plans vs. Original Medicare + Medigap | Dec 7, 2025 |
Geographic disparities exist. Rural counties lost plans disproportionately—some areas dropped from 15 available plans in 2025 to just 4 in 2026. Urban markets fared better but still saw 20-30% reductions in plan counts.
Should You Stick With Medicare Advantage or Switch?
Depends on your health and finances. Medicare Advantage plans still offer integrated coverage—medical, hospital, and usually prescription drugs in one package. Many include extras like gym memberships and over-the-counter allowances. But the math changed.
Medicare Advantage makes sense if:
- You’re generally healthy with predictable medical needs (routine checkups, maintenance medications)
- You prefer network-based care and don’t mind prior authorizations
- You live in an area with multiple plan options and competitive pricing
- You value dental/vision/hearing benefits included in the plan
Original Medicare plus Medigap might be better if:
- You have complex health conditions requiring frequent specialist visits
- You want freedom to see any doctor accepting Medicare without network restrictions
- You can afford Medigap premiums (typically $150–$300/month) for comprehensive coverage
- You travel frequently and need coverage nationwide
The cost crossover point shifted. In 2024, Medicare Advantage often cost less upfront. In 2026, once you factor in new premiums, higher copays, and reduced benefits, Original Medicare with a Medigap plan G might cost only $50-$100 more monthly while offering significantly broader coverage.
How to Navigate This Year’s Enrollment
Start now. October 15 arrives fast, and you’ll need time to compare plans properly. Follow this sequence:
Step 1: Review your 2026 Annual Notice of Change (ANOC). Your current insurer mailed this in September. It details every benefit modification for 2026. Read the fine print—premium changes, copay adjustments, formulary updates, network alterations.
Step 2: List your 2025 healthcare usage. Write down:
- Prescription medications (names and dosages)
- Doctors you saw (specialists matter most)
- Procedures or tests you needed
- Total out-of-pocket spending
Step 3: Use Medicare.gov’s Plan Finder. Enter your zip code, medications, and preferred doctors. The tool calculates estimated annual costs for every available plan based on your specific usage patterns. This beats comparing plans manually.
Step 4: Call top 2-3 plans directly. Ask specific questions:
- “Is Dr. [Name] in-network for 2026?”
- “What’s the prior authorization policy for [procedure]?”
- “Does this plan cover [medication] on Tier 1 or 2?”
- “What’s the copay for specialist visits?”
Don’t rely solely on online summaries. Websites lag behind reality, and you need current answers.
Step 5: Enroll by December 7. Don’t wait until the deadline. Enrollment systems crash under late-period traffic. Submit your application by early December to avoid technical problems.
The Bigger Picture: What This Means Long-Term
This retreat might not be temporary. Medicare Advantage companies operated on thin margins for years, using zero-premium plans as loss leaders to build market share. That strategy worked when medical costs stayed relatively flat. Now, with persistent inflation in healthcare services, the business model cracked.
Industry analysts expect further consolidation. Smaller regional insurers may exit entirely, leaving 3-4 national carriers dominating most markets. That reduces competition—and potentially leads to higher premiums and fewer innovations in benefits.
For beneficiaries, the takeaway is clear: the “set it and forget it” era of Medicare Advantage ended. Annual enrollment demands active participation now. Plans change too dramatically year-over-year to coast on autopilot.
Frequently Asked Questions
What happens if I miss the December 7 enrollment deadline?
You’ll be automatically enrolled in Original Medicare (Parts A and B) starting January 1, 2026, if your current Medicare Advantage plan was terminated. You’ll need to separately enroll in a Part D prescription drug plan to avoid coverage gaps and potential late enrollment penalties. If your plan wasn’t terminated but you missed switching, you’ll remain in your current Medicare Advantage plan with the new 2026 benefits and costs.
Can I switch from Medicare Advantage back to Original Medicare with Medigap?
Yes, but timing matters critically. You can switch to Original Medicare during the annual enrollment period (October 15 – December 7). However, Medigap insurers can deny coverage or charge higher premiums based on health conditions unless you qualify for guaranteed issue rights—typically only available during your initial enrollment period or specific qualifying events. In most states, if you’ve been in Medicare Advantage for more than 12 months, you’ll face medical underwriting for Medigap.
Why did my zero-premium Medicare Advantage plan suddenly cost $45/month?
Insurers subsidized zero-premium plans by betting on lower medical costs than they paid out. As healthcare expenses rose—hospital rates up 8-12%, drug costs climbing 6-9%—those bets failed. Rather than exit markets entirely, many insurers added premiums to offset losses. Your plan’s premium now reflects the actual cost of providing benefits in your area. Compare this plan to alternatives; sometimes a $45/month plan with better benefits beats a zero-premium plan with high copays.
Should I choose the lowest-premium Medicare Advantage plan available?
Not automatically. Low premiums often come with higher copays, narrower networks, and larger out-of-pocket maximums. Calculate your total annual cost: premium × 12 months, plus expected copays for doctor visits, prescriptions, and procedures. A plan charging $30/month with $50 specialist copays might cost more annually than a $60/month plan with $20 specialist copays if you see specialists regularly. Use Medicare’s Plan Finder tool to run these calculations with your actual medications and doctors.
Medicare Advantage’s two-decade growth streak appears over. The 2026 benefit cuts and plan exits mark a fundamental shift in how private insurers approach Medicare coverage. For beneficiaries, this means more homework during enrollment and potentially higher costs—but also a clearer picture of what coverage actually costs when insurers can’t afford to subsidize it anymore.
Mark your calendar: October 15 starts the clock. Review your options, run the numbers, and make an active choice. This year, autopilot doesn’t work.