Medicare Advantage Growth Slows: A Shifting Landscape

ACA Market Faces Turmoil: Premiums Surge as Insurers Re-Evaluate Strategies

Washington D.C. – The Affordable Care Act (ACA) marketplace is bracing for notable disruption in 2026, with major health insurers signaling a shift towards prioritizing profitability over market share. A new analysis of Q2 operating income reveals a widespread trend of premium increases and,in some cases,outright market exits,threatening to reduce consumer choice and drive up healthcare costs.

Data indicates that most major payers experienced operating income growth in the recent quarter, with only Elevance and Molina Healthcare bucking the trend. Though, both Elevance and Molina have already taken aggressive steps to address financial pressures, announcing “significant” premium hikes for ACA plans in 2025. Centene is actively seeking to raise rates through re-filed ACA bids with state regulators.

The moves come amid growing uncertainty surrounding the future of ACA subsidies and potential changes to Medicaid eligibility. The expiration of enhanced ACA subsidies at the end of this year, coupled with recent legislation projected to result in millions losing Medicaid coverage, creates a precarious situation for individuals relying on government-supported insurance.

“We can prioritize margin and let membership fall where it may,” stated Molina CFO Mark Keim during a recent investor call, encapsulating the prevailing sentiment among major insurers.

Key Developments:

CVS Health (Aetna) is exiting the ACA exchanges entirely in 2026, citing the instability of the market.
UnitedHealthcare is considering withdrawing from select ACA markets if it cannot secure adequate rate increases, notably given anticipated membership fluctuations.
Premium requests are soaring: Insurers are requesting a median premium increase of 15% for 2026 plans – the largest hike since 2018, according to a KFF analysis.
Stock performance reflects investor concerns: Shares of several health insurance providers have experienced declines as investors react to the challenges facing the industry. Downgrades from credit ratings agencies and investment banks further underscore these concerns.

Understanding the ACA landscape: A Deeper Dive

The ACA, enacted in 2010, aimed to expand health insurance coverage to millions of uninsured Americans.The law established health insurance marketplaces, offered subsidies to help individuals purchase coverage, and implemented regulations to protect consumers with pre-existing conditions.

However,the ACA has faced ongoing political and economic challenges. Fluctuations in subsidy levels, changes in enrollment policies, and market instability have created a volatile surroundings for insurers.

Why are insurers raising rates and exiting markets?

Several factors are contributing to this trend:

Rising Healthcare Costs: The underlying cost of healthcare continues to increase, putting pressure on insurers to raise premiums.
Risk Adjustment Issues: The ACA’s risk adjustment program, designed to compensate insurers for enrolling sicker individuals, has faced challenges and disputes, leading to financial losses for some payers.
Policy Uncertainty: the potential for changes to the ACA and Medicaid creates uncertainty for insurers,making it challenging to plan for the future.
Focus on Profitability: In a challenging environment,insurers are increasingly prioritizing financial performance over market share,leading to more conservative strategies.

What does this mean for consumers?

The current situation is likely to result in:

Higher Premiums: Consumers will face increased costs for ACA coverage.
reduced Choice: Fewer insurers participating in the marketplaces will limit options for consumers.
* Potential Coverage Gaps: Individuals who lose Medicaid coverage or cannot afford higher premiums may become uninsured.

Looking Ahead:

The future of the ACA marketplace remains uncertain. The upcoming elections and potential legislative changes will play a crucial role in shaping the landscape. Consumers should carefully evaluate their options during open enrollment and explore all available resources, including subsidies and state-based assistance programs. The current situation underscores the ongoing need for sustainable solutions to address the challenges of healthcare affordability and access in the United States.

How might rising costs and premiums influence beneficiary decisions between Medicare Advantage and Original Medicare?

The Deceleration of Medicare Advantage Enrollment

For years,Medicare Advantage (MA) plans have been the fastest-growing segment of the Medicare program. Though, recent data indicates a meaningful slowdown in enrollment growth. While still adding members, the rate of increase is markedly lower than previous years. This shift isn’t a collapse, but a recalibration – a response to several converging factors impacting both insurers and beneficiaries. Understanding these dynamics is crucial for anyone navigating the medicare system, from seniors choosing a plan to healthcare professionals and industry analysts. As of 2025, the Australian Medicare system ensures all Australians can access healthcare, a principle that resonates with the challenges and changes happening in the US Medicare landscape.

Key Factors Contributing to the Slowdown

Several interconnected elements are driving the deceleration of Medicare Advantage growth:

Rising Costs & Premiums: Medicare advantage plans are becoming more expensive. increased healthcare costs, coupled with changes in risk adjustment, are forcing insurers to raise premiums. This price sensitivity is causing some beneficiaries to reconsider MA and opt for traditional Original Medicare.

Benefit Changes & Network restrictions: To manage costs, some MA plans are narrowing their provider networks or increasing cost-sharing requirements (copays, deductibles).These changes can limit access to preferred doctors and hospitals, deterring enrollment.

Increased Scrutiny from CMS: The Centers for Medicare & Medicaid Services (CMS) is increasing its oversight of Medicare Advantage plans, focusing on issues like prior authorization, appeal processes, and marketing practices.Stricter regulations add compliance costs for insurers and can impact plan design.

return to Traditional Medicare: The pandemic saw a temporary surge in MA enrollment, but as healthcare access normalized, some beneficiaries returned to Original Medicare for greater flexibility and choice.

Star Ratings Impact: CMS’s Star Ratings system significantly influences plan enrollment. lower-rated plans struggle to attract and retain members, contributing to overall growth slowdowns for those specific plans.

The Impact on Different Types of Medicare advantage Plans

The slowdown isn’t uniform across all Medicare Advantage plan types:

HMO (Health Maintainance Association) Plans: These plans, typically offering lower premiums but requiring a primary care physician (PCP) referral for specialists, are experiencing a more pronounced slowdown due to network restrictions.

PPO (Preferred Provider Organization) Plans: PPO plans, offering greater flexibility to see out-of-network providers (at a higher cost), are proving more resilient, but still facing growth challenges.

Special Needs Plans (snps): SNPs, designed for individuals with specific chronic conditions or dual eligibility (Medicare and Medicaid), continue to show moderate growth, driven by targeted benefits and care coordination.

Dual Eligible Special Needs Plans (D-SNPs): These plans cater to individuals eligible for both Medicare and Medicaid, offering thorough coverage and support services.

What This Means for Beneficiaries: Navigating Your Options

The slowing growth of Medicare Advantage doesn’t necessarily mean it’s a bad option. However, it underscores the importance of careful plan selection. Here’s what beneficiaries should consider:

1. Assess Your Healthcare Needs: Do you have chronic conditions requiring frequent specialist visits? A PPO plan might be a better fit.Are you agreeable with a PCP referral system? An HMO plan could save you money.
2. Check provider Networks: Ensure your preferred doctors and hospitals are in-network for any plan you’re considering.
3. Review Cost-Sharing: Compare copays, deductibles, and out-of-pocket maximums across different plans.
4. Understand Prior Authorization Requirements: Some Medicare Advantage plans require prior authorization for certain procedures or medications.
5. Evaluate Star Ratings: Use CMS’s Star Ratings to assess plan quality and performance.

The Future of Medicare Advantage: Trends to Watch

Looking ahead, several trends will shape the future of Medicare Advantage:

Increased Focus on value-Based Care: Insurers are increasingly adopting value-based care models, aiming to improve quality and reduce costs.

Expansion of Supplemental Benefits: Medicare Advantage plans are offering a wider range of supplemental benefits, such as vision, dental, hearing, and fitness programs.

Digital Health Integration: Telehealth, remote patient monitoring, and other digital health technologies are becoming more prevalent in Medicare advantage.

Continued Regulatory Changes: CMS is highly likely to continue refining regulations governing Medicare Advantage, impacting plan design and operations.

Personalized Medicare: Expect to see more plans offering personalized benefits and care plans tailored to individual needs.

Practical Tips for Choosing a Medicare Advantage Plan

Utilize the Medicare Plan Finder: The official Medicare Plan Finder (https://www.medicare.gov/plan-compare/) is an invaluable tool for comparing plans in your area.

Attend Medicare Workshops: Many organizations offer free medicare workshops to help beneficiaries understand their options.

Consult with a Licensed Insurance Agent: A informed agent can provide personalized guidance and help you choose a plan that meets your needs.

Review Your Plan Annually: Your healthcare needs may change over time