In a move that's shaking up the Medicare landscape, UnitedHealthcare announced it will pull out of Medicare Advantage plans in 109 U.S. counties starting next year. This decision affects about 180,000 members, who now face the scramble to find new coverage. The company cited balancing higher medical costs against reimbursement pressures in the program, a challenge that's hit many insurers hard lately.
Indeed, the Medicare Advantage market, which privatizes parts of traditional Medicare, has been under intense watch. Recent analysis points to UnitedHealth and rival Humana as key players in gaming the system's risk adjustment mechanisms—essentially inflating payments by coding patient conditions more aggressively. This has reportedly funneled billions in extra dollars to these giants, driving up unnecessary costs for the broader program. Humana, meanwhile, is shedding members while borrowing pages from UnitedHealth's strategy to stay afloat. Enrollment data from earlier this year showed UnitedHealth tightening its grip, grabbing more lives as Humana lost ground amid slowing overall growth.
However, not all news is retreat. Just days ago, details on 2026 Medicare Advantage plans from UnitedHealth, Humana, and Aetna went live on Medicare.gov, right before the annual enrollment rush kicks off on October 15. UnitedHealth's offerings promise more choice and stability in popular benefits, though critics question if that's enough to offset the controversies. Rising costs have already prompted the insurer to drop plans serving over 600,000 users this year, and federal watchdogs have flagged questionable payments to both UnitedHealth and Humana—cases where diagnoses led to payouts but little follow-up care for patients.
Moreover, stock surges for both companies followed announcements of a 5% bump in MA payments for 2026, hinting at financial rebounds despite the pullbacks. Yet, as Humana's shares climb while the sector dips, it underscores a uneven playing field in this $400 billion corner of healthcare.
With enrollment season upon us, seniors must navigate these shifts carefully—what does this mean for the long-term trust in privatized Medicare options?