Beneath America’s Healthcare Landscape: Insurers Reshape Medicare Advantage Networks as Medical Costs Continue Rising

The changes are connected to rising healthcare and drug costs, increased use of medical services, and funding pressures affecting insurers that operate Medicare Advantage plans on behalf of the federal government.

UnitedHealthcare said it will leave some locations where it currently has a higher proportion of preferred provider organization, or PPO, plans. PPO plans generally provide members with greater flexibility to receive care outside a preferred network, although they can cost insurers more to operate.

Aetna, meanwhile, said it is expanding health maintenance organization, or HMO, plans. These plans generally rely on smaller networks of providers and are designed around receiving care within the participating network.

The adjustments come as insurers respond to changing financial conditions in Medicare Advantage. The federal government expects approximately 34 million people to be covered by Medicare Advantage plans in 2027, about 6% fewer than the previous year based on insurer feedback.

UnitedHealthcare said 66% of its members will have access to both HMO and PPO options in 2027, down from 70% in 2026. Aetna is also expected to reduce its geographic footprint, with plans offered in 41 states compared with 43 states this year.

Humana is making a similar adjustment to its market coverage. The company said it will offer plans in more than 80% of U.S. counties in 2027, compared with 85% in 2026.

At the same time, the Centers for Medicare and Medicaid Services expects average Medicare Advantage premiums to decline by more than 16% in 2027, to about $12 from $14.37. Lower premiums, however, exist alongside changes in networks and plan availability.

For millions of older Americans and people with disabilities, the changes will ultimately be experienced through practical questions: which doctors remain available, which hospitals participate, and how much flexibility a plan provides. The evolving Medicare Advantage landscape therefore reflects a broader effort by insurers to balance coverage, costs, utilization, and the financial structure of the program as 2027 approaches.

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This AI-generated image is a conceptual editorial representation of U.S. healthcare insurance networks and does not depict actual patients, doctors, insurance members, or facilities.

SOURCES

Reuters Centers for Medicare and Medicaid Services KFF UnitedHealthcare Aetna