New Research Documents an Unprecedented Wave of Plan Terminations That Could Reshape the Private Medicare Landscape
After two decades of nearly unbroken expansion, the Medicare Advantage program is entering a period of profound instability. A sweeping new analysis published in the Journal of the American Medical Association reveals that approximately 2.9 million older Americans could be involuntarily removed from their private Medicare plans in 2026 — a tenfold increase from historical norms that signals a fundamental recalibration of the relationship between private insurers and the federal government’s largest health coverage program.
The findings paint a picture of a marketplace where falling government reimbursements, rising healthcare utilization among aging enrollees, and tightened regulatory oversight are colliding to make certain plans — and in some cases entire state markets — financially unsustainable for private carriers. The result is an accelerating exodus that threatens to strand vulnerable seniors, particularly those living in rural communities, without viable private coverage options.
“For years, we’ve recognized that Medicare Advantage reimbursements have likely exceeded what would be spent on these same beneficiaries under traditional Medicare,” said lead researcher Mark Meiselbach, PhD, an assistant professor at the Johns Hopkins Bloomberg School of Public Health. “Now that policymakers are working to correct that overpayment, some plans simply cannot remain profitable. In many ways, this is an expected market correction — but the pain will not be distributed evenly. Enrollees in certain regions may find themselves with no private Medicare options whatsoever.”
The Architecture of Medicare Coverage
Understanding the Two Pathways
To grasp the significance of this disruption, it helps to understand how Medicare’s coverage options are structured.
Traditional Medicare consists of two foundational components:
- Part A provides hospital insurance, covering inpatient stays, skilled nursing facility care, hospice services, and certain home health services
- Part B covers outpatient medical services, including physician visits, preventive care, diagnostic testing, durable medical equipment, and ambulance transport
Together, Parts A and B constitute what is commonly called “Original Medicare.” While comprehensive in scope, this pathway leaves beneficiaries responsible for deductibles, copayments, and coinsurance — with no annual ceiling on out-of-pocket spending. Many traditional Medicare enrollees purchase supplemental Medigap policies to help cover these cost-sharing obligations.
Medicare Advantage (Part C) offers an alternative pathway through privately administered health plans that contract with CMS to deliver all Part A and Part B benefits. These plans frequently bundle additional services that traditional Medicare does not cover:
- Prescription drug coverage (integrating Part D benefits)
- Routine dental, vision, and hearing care
- Fitness and wellness programs
- Transportation to medical appointments
- Over-the-counter health product allowances
- Annual out-of-pocket spending limits (which traditional Medicare lacks)
Part D, whether integrated into a Medicare Advantage plan or purchased as a standalone policy, provides prescription drug coverage. Recent legislative changes under the Inflation Reduction Act established a $2,100 annual cap on out-of-pocket drug spending for Part D enrollees — a significant new consumer protection that took effect in 2025.
What the Research Uncovered
Methodology: Tracking 192 Million Enrollee-Years
The Johns Hopkins research team conducted one of the most comprehensive analyses of Medicare Advantage market stability ever undertaken. Their data set encompassed:
- More than 192 million enrollee-years of coverage data
- Over 752,000 plan-county observations tracking plan availability at the local level
- 28.6 million individual enrollees across all 50 states and the District of Columbia
The researchers linked county-level CMS enrollment records from prior years to two critical annual federal data sources:
- Plan Crosswalk Files: These documents track when insurance contracts terminate or when carriers reduce their geographic service areas — essentially mapping which plans are disappearing and where
- Landscape Files: These comprehensive listings catalog every Medicare Advantage plan available in each county for a given year
By cross-referencing these data sources across multiple years (Crosswalk data from 2017–2025 and Landscape data from 2018–2026), the team could trace the trajectory of individual plans, identify patterns in carrier market exits, and quantify how many beneficiaries would lose their existing coverage.
The analysis focused specifically on non-employer health maintenance organization (HMO) and preferred provider organization (PPO) plans — the types of Medicare Advantage coverage most commonly selected by individual beneficiaries shopping on the open market.
The Numbers Tell a Dramatic Story
The central finding is striking in its magnitude. Between 2018 and 2024, involuntary disenrollment — defined as coverage loss resulting from a carrier’s decision to terminate a plan or withdraw from a geographic market, rather than from a beneficiary’s voluntary choice to switch — averaged just 1.0 percent of Medicare Advantage enrollment annually. This low and stable rate reflected a marketplace in robust health, where carriers were enthusiastically entering new counties and launching new plan options.
That stability shattered beginning in 2025:
| Year | Forced Disenrollment Rate | Approximate Enrollees Affected |
|---|---|---|
| 2018–2024 (annual average) | ~1.0% | Relatively minimal |
| 2025 | ~6.9% | Significant increase |
| 2026 (projected) | ~10.0% | ~2.9 million enrollees |
The leap from 1 percent to 10 percent in just two years represents a fundamental market disruption — not a gradual evolution but a sudden structural break from the program’s historical trajectory.
Who Bears the Greatest Burden?
Disproportionate Impact by Plan Type, Geography, and Carrier Size
The research reveals that forced disenrollment does not affect all Medicare Advantage enrollees equally. Several population segments face dramatically elevated risk:
By Plan Structure:
- Enrollees in non-special needs plans (non-SNPs) — the standard Medicare Advantage plans used by the majority of beneficiaries — face a projected disenrollment rate of 12.4 percent, meaningfully higher than the overall average
- PPO enrollees are particularly vulnerable: they constitute nearly half (49.35 percent) of all disenrolled individuals but represent only 30.88 percent of those retaining coverage. PPO plans, which offer broader provider network flexibility than HMOs, tend to carry higher costs for insurers — making them more likely targets for termination when margins tighten
By Geography:
- Rural beneficiaries account for 28.04 percent of those facing involuntary coverage loss but only 15.07 percent of those retaining their plans. This disproportionate impact reflects the fundamental economics of rural healthcare markets: smaller enrollment pools generate less premium revenue to spread across fixed administrative costs, provider networks are thinner and more expensive to maintain, and per-beneficiary healthcare utilization tends to be higher due to older, sicker populations with limited access to preventive services
- The geographic concentration means that some rural counties may lose all Medicare Advantage options entirely — leaving residents with no private Medicare pathway and forcing a return to traditional Medicare
By Carrier Size:
The analysis reveals a striking divergence between small and large insurers:
- Small carriers account for nearly half (48.82 percent) of all plan exits but represent only 27.08 percent of retained coverage. These smaller companies lack the scale, geographic diversification, and capital reserves to absorb losses in underperforming markets
- The three largest national carriers — UnitedHealthcare, Humana, and Elevance Health — account for only 24.23 percent of plan exits while maintaining 49.6 percent of retained coverage. Their size provides both financial cushion and negotiating leverage with providers, enabling them to sustain operations in markets where smaller competitors cannot survive
This market concentration dynamic suggests that the disruption may ultimately consolidate the Medicare Advantage industry further, leaving fewer but larger carriers dominating the remaining markets — with uncertain implications for competition, pricing, and beneficiary choice.
State-by-State Variation: A Patchwork of Disruption
The Geographic Lottery
The research documents enormous variation in disenrollment rates across states, creating what amounts to a geographic lottery for Medicare Advantage enrollees:
Most states fall into the lowest-impact category, with projected forced disenrollment rates below 10 percent of their Medicare Advantage enrollment. These tend to be states with large urban population centers, competitive insurance markets, and diverse carrier presence.
The second-largest cluster of states faces moderate disruption, with disenrollment rates between 10 and 20 percent — significant enough to affect hundreds of thousands of beneficiaries but not catastrophic for the overall market.
A smaller group of states faces high disenrollment in the 20 to 40 percent range, indicating serious market instability with multiple carrier exits affecting large swaths of the enrolled population.
A handful of states confront severe disruption at 40 percent or higher, suggesting near-collapse of viable private Medicare options in significant portions of their territory.
Vermont: The Canary in the Coal Mine
One state stands dramatically apart from all others: Vermont, where a staggering 92.2 percent of Medicare Advantage enrollees are projected to lose their current coverage in 2026. This near-total market dissolution did not occur overnight — it unfolded through a cascading failure that Meiselbach described as a “downward spiral.”
The sequence played out across two consecutive enrollment cycles:
- Initial carrier exits: Plans operating in Vermont determined they could not sustain profitability given the state’s demographics, healthcare costs, and reimbursement levels. Major carriers withdrew their offerings.
- Enrollment concentration: Beneficiaries displaced by those initial exits migrated to the remaining available plans, concentrating a disproportionately high-cost population — people who had specifically chosen Medicare Advantage because they anticipated significant healthcare needs — into a shrinking number of plans.
- Secondary collapse: The surviving plans, now absorbing a sicker-than-average enrollment pool without the premium revenue from healthier members who may have returned to traditional Medicare, found their own financial positions deteriorating rapidly. This triggered further exits.
- Market dissolution: With virtually no viable carriers remaining, the state’s Medicare Advantage marketplace effectively ceased to function as a meaningful coverage option for the vast majority of eligible seniors.
“What concerns me most is whether this same cascading dynamic might be unfolding in other states where we’ve only observed the first wave of exits in 2026,” Meiselbach cautioned. “Vermont may be showing us what a complete market failure looks like — and other states could be just one or two steps behind on the same path.”
The Forces Driving Market Exit
A Convergence of Financial Pressures
The research team identified several interconnected factors driving the unprecedented wave of plan terminations:
Reimbursement Corrections:
For years, Medicare Advantage plans received per-enrollee payments from CMS that substantially exceeded what the same beneficiaries would have cost under traditional Medicare. Government advisory bodies, including the Medicare Payment Advisory Commission (MedPAC), repeatedly documented these overpayments and recommended corrections.
CMS has responded by gradually tightening reimbursement formulas — slowing the annual growth of per-enrollee payments and adjusting the risk adjustment methodologies that determine how much carriers receive for beneficiaries with varying health profiles. While these corrections bring payments closer to actuarial fairness, they simultaneously erode the generous margins that made many markets attractive to private insurers.
Risk Adjustment Reforms:
CMS has been refining its risk adjustment model — the formula that adjusts payments based on enrollees’ health conditions — to reduce opportunities for “upcoding,” a practice where plans document diagnoses more aggressively than traditional Medicare to inflate their risk-adjusted payments. As these refinements take hold, carriers that relied on favorable risk coding to maintain profitability face sudden revenue shortfalls.
Rising Healthcare Utilization:
The Baby Boom generation is not only swelling Medicare enrollment but also consuming healthcare services at accelerating rates. The oldest Boomers, now approaching their late 70s, are entering the period of life when chronic disease burden intensifies, specialist visits multiply, and costly interventions become more frequent. For carriers that priced their plans based on younger, healthier enrollment cohorts, this demographic maturation represents a structural shift in their cost curves.
Post-Pandemic Care Patterns:
The COVID-19 pandemic created a period of artificially suppressed healthcare utilization as patients deferred elective procedures, routine screenings, and specialist consultations. As deferred care catches up, insurers are experiencing utilization surges that exceed pre-pandemic baselines — a phenomenon sometimes called the “healthcare utilization rebound.”
Consequences for Displaced Beneficiaries
The Scramble for Alternatives
When a Medicare Advantage plan exits a market, its entire ecosystem of coverage — negotiated provider rates, pharmacy formularies, supplemental benefits, care management programs — vanishes with it. Displaced enrollees face a series of consequential decisions under compressed timelines:
Option 1: Find Another Medicare Advantage Plan
In markets where alternative private plans remain available, beneficiaries can attempt to enroll in a competing carrier’s offering. However, switching plans frequently means:
- Losing access to established physician relationships if the new plan’s provider network differs from the old one
- Adjusting to different prescription drug formularies that may not cover the same medications — or may place them at higher cost-sharing tiers
- Accepting different supplemental benefit packages, potentially losing valued perks like dental coverage, vision benefits, or fitness allowances
- Navigating new prior authorization requirements and referral processes
Option 2: Return to Traditional Medicare
Beneficiaries who cannot find a suitable Medicare Advantage alternative — or who decide they prefer the stability of the government-run program — can transition back to Original Medicare. This pathway offers broader provider choice (most physicians and hospitals accept traditional Medicare) but introduces significant new costs:
- No out-of-pocket maximum: Unlike Medicare Advantage plans, traditional Medicare has no annual ceiling on beneficiary cost-sharing. A serious illness or hospitalization can generate unlimited financial exposure.
- 20 percent coinsurance: Part B services require beneficiaries to pay 20 percent of the Medicare-approved amount, with no upper limit
- Supplemental insurance needed: Most traditional Medicare enrollees purchase Medigap policies to help cover deductibles, copayments, and coinsurance. These policies typically cost $150 to $300 or more per month, depending on the plan level and the enrollee’s age and location
- Separate drug plan required: Beneficiaries must independently shop for and enroll in a standalone Part D prescription drug plan
- Loss of supplemental benefits: Traditional Medicare does not cover routine dental, vision, or hearing services
The Medigap Trap:
A particularly painful dimension of forced disenrollment affects beneficiaries who originally left traditional Medicare for a Medicare Advantage plan years ago. In most states, Medigap insurers are only required to accept applicants without medical underwriting during a limited initial enrollment window — typically the six-month period after a person first enrolls in Part B.
Beneficiaries who are now being pushed back to traditional Medicare after years in Medicare Advantage may find that Medigap insurers can deny them coverage or charge substantially higher premiums based on their current health status. For seniors with pre-existing conditions — precisely the population most dependent on comprehensive coverage — this creates a cruel catch: they need supplemental insurance the most but may be least able to obtain it at affordable rates.
Some states have enacted protections requiring guaranteed Medigap access for involuntarily disenrolled Medicare Advantage members, but this patchwork of state-level rules adds yet another layer of complexity to an already bewildering transition.
Policy Implications and Expert Recommendations
Strengthening the Safety Net
The research findings carry urgent implications for federal policymakers, regulators, and the healthcare system at large.
Enhanced Comparison Tools:
Meiselbach emphasized the need for better decision-support resources for displaced beneficiaries. “Anything that makes it easier for enrollees to understand how potential new plans compare to the coverage they’re losing would be enormously helpful,” he said. “Interactive tools that show whether their current doctors are in a new plan’s network, whether their medications will still be covered, and how supplemental benefits stack up would provide real practical value during an incredibly stressful transition.”
Fortifying Traditional Medicare:
The researcher also argued for strengthening traditional Medicare as a reliable fallback when private markets become unstable. “At a minimum, adding an annual out-of-pocket spending maximum to traditional Medicare would make it a much more viable alternative for beneficiaries who lose their Advantage plans,” Meiselbach suggested. “Right now, the absence of a spending cap makes traditional Medicare a genuinely frightening proposition for people with serious chronic conditions.”
Currently, traditional Medicare’s lack of an out-of-pocket ceiling stands as one of its most significant structural weaknesses compared to Medicare Advantage — and one of the primary reasons many beneficiaries chose private plans in the first place. If those private plans are now disappearing, the public program needs to offer meaningful financial protection to the seniors falling back into it.
Monitoring for Cascading Failures:
Vermont’s near-total market collapse serves as a warning that carrier exits can trigger self-reinforcing spirals. CMS may need to develop early warning systems that identify markets approaching critical instability thresholds — intervening with temporary payment adjustments, transition assistance, or other stabilization measures before a complete market failure occurs.
Guaranteed Medigap Access:
Federal legislation guaranteeing Medigap enrollment rights for involuntarily disenrolled Medicare Advantage beneficiaries — regardless of health status and without medical underwriting — would eliminate one of the most punitive consequences of forced plan termination. Several bills addressing this issue have been introduced in Congress, but none have advanced to passage.
The Bigger Picture: A Program at a Crossroads
Two Decades of Growth Hit a Wall
Medicare Advantage’s trajectory over the past twenty years has been one of American healthcare’s most remarkable growth stories. From covering a small fraction of Medicare beneficiaries in the early 2000s, the program expanded to encompass roughly half of all Medicare enrollment by the mid-2020s. Private carriers invested billions in market development, benefit enrichment, and enrollment growth — fueled by government reimbursements that consistently exceeded what the same beneficiaries would have cost under traditional Medicare.
The current disruption represents the inevitable reckoning with that overpayment history. As CMS brings reimbursements closer to actuarial parity with traditional Medicare, the business case for certain plans — particularly those in rural markets, those serving higher-cost populations, and those operated by smaller carriers without economies of scale — has evaporated.
What Comes Next
Whether the 2025–2026 disenrollment spike represents a temporary market correction or the beginning of a prolonged period of instability remains to be seen. Several scenarios are plausible:
Stabilization: After shedding unprofitable markets and plan designs, surviving carriers may achieve sustainable financial equilibrium at lower but adequate margins. Disenrollment rates could return to historical norms, albeit with a smaller overall Medicare Advantage footprint in certain regions.
Continued Consolidation: Smaller carriers may continue exiting the market, leaving an increasingly concentrated industry dominated by a handful of national giants. While these larger companies have the scale to maintain broader geographic presence, reduced competition could diminish the benefit richness and pricing pressure that made Medicare Advantage attractive to enrollees.
Geographic Bifurcation: Medicare Advantage may evolve into a predominantly urban and suburban product, with robust carrier competition in densely populated markets but minimal or no private options in rural areas. This would create a two-tier system where geographic location largely determines whether seniors have access to private Medicare’s supplemental benefits.
Legislative Intervention: Congress could respond to the disruption with new legislation — ranging from increased reimbursements to stabilize the private market, to structural reforms of traditional Medicare that make it a more competitive alternative, to entirely new policy frameworks that reimagine the public-private balance in senior healthcare coverage.
For the nearly 3 million Americans facing involuntary coverage loss in 2026 — and the millions more watching nervously from plans that may be next — the abstract policy debates carry deeply personal stakes. Each displaced enrollee represents a person navigating a complex and high-consequence decision about their healthcare future, often under time pressure, with incomplete information, and with financial security hanging in the balance.
Resources for Affected Beneficiaries
Seniors who have received notice that their Medicare Advantage plan is terminating should take the following steps:
- Contact your state’s SHIP program: The State Health Insurance Assistance Program provides free, unbiased Medicare counseling in every state. Call 1-877-839-2675 or visit shiphelp.org
- Compare available plans: Visit Medicare.gov/plan-compare to review Medicare Advantage and Part D options available in your county
- Understand your enrollment rights: Beneficiaries whose plans are terminated receive a Special Enrollment Period allowing them to join a new Medicare Advantage plan or switch to traditional Medicare outside the standard Annual Enrollment Period
- Evaluate Medigap options: If transitioning to traditional Medicare, research supplemental insurance availability in your state. Contact your state insurance department for information about guaranteed issue rights that may apply to involuntarily disenrolled beneficiaries
- Review Part D options separately: If returning to traditional Medicare, you will need a standalone Part D prescription drug plan. The new $2,100 annual out-of-pocket cap provides meaningful protection against catastrophic drug costs
- Call 1-800-MEDICARE: The national Medicare helpline (1-800-633-4227) is available 24 hours a day, 7 days a week, with TTY service at 1-877-486-2048
