The Private Medicare Experiment Is Unraveling in Rural America
Anthony J. Petchkis spends his days painting the rugged White Mountain landscapes visible from his studio in Conway, New Hampshire. At 70, his artistic output is steady, but his body is not. A heart attack several years ago required an emergency ambulance ride across state lines to Portland, Maine, where surgeons inserted an arterial stent. He manages persistently elevated cholesterol, type 2 diabetes, gout, and rheumatoid arthritis with a daily regimen of eight different medications.
For years, Petchkis relied on his Medicare Advantage plan to shield him from the financial burden of his medical care, which he estimates costs several thousand dollars annually. Living on roughly $24,000 a year — cobbled together from Social Security checks and income from selling his landscape paintings — he had little margin for unexpected healthcare expenses. Then, without warning, his insurer abandoned his county.
“I keep asking myself how I’m supposed to handle all these costs going forward,” Petchkis said from the modest home he shares with friends to split expenses. “Right now things are manageable, but what happens in six months or a year if something catastrophic strikes? I simply don’t have the money.”
His predicament is far from unique. Across New Hampshire and a handful of other predominantly rural states stretching from New England to the Mountain West, tens of thousands of elderly Americans have been abruptly cut loose from their Medicare Advantage coverage. Insurance carriers have pulled out of communities where their plans were bleeding money or threatening future profitability — leaving vulnerable seniors to navigate a confusing and often more expensive healthcare landscape on their own.
The Rise and Retreat of Medicare Advantage
A Two-Decade Boom
Medicare Advantage — the privately operated alternative to traditional government-run Medicare — experienced explosive growth over the past twenty years. Legislative changes enacted in 2003 sweetened the deal for private insurers by increasing per-enrollee taxpayer subsidies, triggering a wave of market entry and aggressive competition for senior customers.
The pitch was compelling. Companies dangled zero-premium plans, complimentary gym memberships, quarterly allowances for over-the-counter health products, and coverage for services that traditional Medicare ignores entirely — dental cleanings, eye exams, hearing aids. Most plans bundled prescription drug coverage, sparing enrollees the hassle of shopping for a separate Part D drug plan. By 2025, roughly half of all Medicare beneficiaries nationwide had opted into these private alternatives.
The underlying theory was straightforward: vigorous competition among private carriers would drive innovation and efficiency, ultimately reducing the government’s healthcare tab. Annual assessments by government advisory bodies, however, have consistently found that this theory has not materialized in practice. Instead, Medicare Advantage has generated substantial overpayments relative to what the same beneficiaries would cost under traditional Medicare.
The Profitability Squeeze
For 2026, Medicare’s independent advisory panel estimates that Advantage plans will cost taxpayers approximately $76 billion more than covering the same individuals through the standard program. In response, the Centers for Medicare and Medicaid Services (CMS) has been gradually tightening annual reimbursement growth rates to narrow that gap.
Simultaneously, the insurance industry contends that the aging Baby Boom cohort is consuming healthcare at accelerating rates — more specialist visits, more procedures, more expensive medications — compressing profit margins from the other direction.
“Medicare Advantage experienced uninterrupted expansion for two decades, fueled largely by extraordinary profitability for carriers,” explained Mark Meiselbach, an assistant professor at the Johns Hopkins Bloomberg School of Public Health who co-authored a recent peer-reviewed analysis of the disruption. “That narrative of reliable growth and generous margins has fundamentally shifted.”
The collision of these forces — regulatory pressure from above and rising medical costs from below — triggered an unprecedented wave of market exits beginning in late 2024 and accelerating into 2025 and 2026.
The Scale of Disruption
Nearly 3 Million Displaced
According to research published in the Journal of the American Medical Association (JAMA), close to 3 million Americans were involuntarily removed from their Medicare Advantage plans when carriers withdrew from their counties ahead of the 2026 plan year. That figure represents roughly 10 percent of all individually enrolled Medicare Advantage beneficiaries — a dramatic escalation from the period between 2018 and 2024, when annual involuntary termination rates consistently stayed below 2 percent.
The majority of displaced seniors had at least one alternative Medicare Advantage plan available in their area. But approximately 30,000 individuals found themselves in counties where no private Medicare option remained at all, according to an independent analysis by KFF, a nonpartisan health policy research organization.
The geographic pattern was stark. Rural states bore the heaviest burden: New Hampshire, Vermont, Idaho, and several other sparsely populated states saw the most dramatic carrier withdrawals. Urban and suburban markets, with their larger risk pools and denser provider networks, generally retained multiple competing plans.
The Industry’s Largest Player Leads the Exodus
UnitedHealthcare — commanding the largest Medicare Advantage market share in the nation — announced it would exit counties covering approximately 600,000 beneficiaries, representing the single biggest reduction among all private carriers. The company cited the need to restore profitability as its primary motivation.
In some states, United went further than simply withdrawing plans. In Idaho, the company halted broker commission payments and erected barriers that made consumer enrollment difficult. Dean Cameron, director of the Idaho Department of Insurance, publicly condemned these tactics.
“They shouldn’t be permitted to engage in these inappropriate practices that inflict real harm on our most vulnerable elderly residents,” Cameron said.
United countered that its plans remained accessible through Medicare.gov and its own digital platform during the open enrollment window. In a written statement, the company said it ended agent commissions on select Idaho plans “to help preserve the benefits that matter most to current members while supporting the long-term sustainability of these plans amid increasing regulatory and market pressures.”
The insurance industry’s Washington lobbying organization, AHIP, defended the broader trend. “Health plans are focused on shielding seniors from the full impact of rising costs and protecting the affordability, benefits, and comprehensive coverage that 35 million Americans depend on through Medicare Advantage,” said spokesperson Conner Coles.
Ground-Level Impact: New Hampshire
Carroll County’s Crisis
Carroll County sits in the northeastern corner of New Hampshire, where the Presidential Range draws retirees seeking mountain vistas and clean air. The county claims the state’s highest median age at 54 — a demographic profile that made it simultaneously attractive and risky for Medicare Advantage carriers.
WellSense, a nonprofit insurer headquartered in Massachusetts, had operated the county’s most popular Medicare Advantage plan. When the company pulled that plan, it left roughly 77,000 New Hampshire residents searching for alternatives. A single WellSense plan technically remains available in the county, but local insurance brokers and Medicare counselors describe it as unsuitable for most seniors because it is specifically structured for individuals who simultaneously qualify for Medicaid — a small subset of the elderly population.
WellSense did not respond to multiple requests for comment.
The fallout overwhelmed local officials. State Representative Stephen Woodcock, who represents the Conway area, described being inundated with desperate constituents.
“Every single day my email inbox filled with 20 or 30 messages from people pleading for guidance — ‘Tell me what to do. What are my options?'” Woodcock recalled. “And the honest answer was that there wasn’t a damn thing any of us could do for them.”
The Broker’s Perspective
Edward Hollum, a Conway-based health insurance broker who specializes in Medicare coverage, watched the situation deteriorate with growing alarm. He noted that in recent years, Medicare Advantage carriers had been offering increasingly lavish perks as they competed for enrollment share. Some plans in New Hampshire included a $1,200 annual fitness benefit that enrollees could apply toward ski lift tickets at the state’s premier resorts — plus lessons.
“Those days are gone,” Hollum said. “The plans have largely abandoned the state. Outside the southern tier of counties that border Massachusetts, there’s almost nothing left.”
“This is a terrible, terrible thing that happened to people here,” he added.
Real Consequences for Real People
Mark Hounsell, 74, spent decades in New Hampshire public life, including service as a state senator, before retiring from his career as a plumber. When he learned his Medicare Advantage coverage was being terminated, he rushed to schedule a pacemaker implantation in November — while his insurance would still pay for it.
For 2026, Hounsell determined he could not absorb the roughly $200 monthly cost of a supplemental Medigap policy on his fixed income. He has taken a part-time night shift at Home Depot to help cover basic expenses. Even with that additional income, he recently canceled a follow-up cardiology appointment to check on his newly implanted pacemaker — a visit that could cost hundreds of dollars if diagnostic tests are involved.
“I called the office and told them I wasn’t coming,” Hounsell said flatly. “I cannot afford to pay 20 percent of whatever that visit is going to cost.”
Vermont: An Entire Metro Area Goes Dark
Burlington Left Without Options
Approximately 35,000 Vermonters lost their Medicare Advantage coverage in the latest round of carrier withdrawals. In the greater Burlington area — the state’s largest population center — not a single Medicare Advantage plan is available for 2026.
Larry Mindell, 78, a retired fitness instructor living in Winooski (adjacent to Burlington), had been a devoted Medicare Advantage enrollee for years. He valued the zero monthly premiums, integrated vision and dental benefits, and reward programs that could be applied toward over-the-counter health products. His original carrier, MVP Health, stopped offering plans in 2025. He and his wife, Peg Allen, pivoted to BlueCross BlueShield of Vermont’s Advantage product — only to see that plan withdrawn as well.
“I was genuinely astonished at what those Advantage plans could offer — no premiums, minimal co-pays, all sorts of bonus perks,” Mindell reflected. “I suppose it turned out to be too good to be true.”
With no private alternative available, Mindell transitioned to traditional Medicare with a supplemental Medigap policy. He estimates the switch costs him and his wife an additional $5,500 annually in premium payments.
The Insurer’s Math
BlueCross BlueShield of Vermont, operating as a nonprofit, reported losing $50 million on its Medicare Advantage plans covering 35,000 Vermont seniors in 2025 alone. The company attributed these unsustainable losses to two converging forces: seniors utilizing medical services at higher-than-projected rates and CMS deliberately slowing the growth of reimbursement payments.
“These combined pressures made it impossible for Vermont Blue Advantage to continue offering reasonably priced products that could serve as a genuine alternative to traditional Medicare coverage,” said Kristina Massari, a spokesperson for the nonprofit insurer.
The Structural Vulnerability
No Obligation to Stay
The upheaval exposes a fundamental design vulnerability in the Medicare Advantage model: private carriers have no legal obligation to maintain coverage in any given market from one year to the next. When financial conditions deteriorate — whether from rising medical costs, tighter government reimbursements, or both — companies can simply exit, leaving enrolled seniors to fend for themselves.
This structural instability disproportionately affects rural communities, where smaller enrollment pools, limited provider networks, and higher per-capita costs make profitability more difficult to sustain. The very populations that often have the fewest healthcare alternatives are the most likely to lose their Medicare Advantage options.
For seniors who are dropped, the transition is rarely seamless. Moving to traditional Medicare means:
- Losing supplemental benefits like dental, vision, and hearing coverage that Medicare Advantage plans typically included
- Facing 20 percent coinsurance on most outpatient services under Part B, with no annual out-of-pocket maximum
- Needing separate coverage — a Medigap supplemental policy (averaging $150–$250 monthly) and a standalone Part D prescription drug plan
- Navigating a complex marketplace during a stressful and often compressed timeline
The Cost-Containment Trade-off
Even when Medicare Advantage plans remain available, enrollees face trade-offs that traditional Medicare beneficiaries do not. Private carriers employ aggressive cost-containment strategies: restricted provider networks limit which doctors and hospitals patients can access, and prior authorization requirements can delay or deny expensive treatments and medications.
As plan instability increases, seniors may also face the prospect of annual plan shopping — evaluating shifting networks, formularies, copayment structures, and supplemental benefits every fall during open enrollment. For a population with elevated rates of cognitive decline and limited health literacy, this annual marketplace navigation poses genuine challenges.
Regulatory Response and Available Resources
CMS, the federal agency overseeing Medicare, issued a measured response to the growing disruption.
“We are monitoring trends in Medicare Advantage to protect seniors and preserve long-term stability in the program,” the agency said in an emailed statement. “While some insurers have chosen to adjust their service areas for 2026, many beneficiaries remain in their current plan, and enrollment continues to grow, albeit at a slower rate than in recent years.”
Finding Help
Seniors affected by plan withdrawals — or anyone seeking guidance on Medicare coverage options — can access free, unbiased counseling through the State Health Insurance Assistance Program (SHIP), which operates in all 50 states plus the District of Columbia. These federally funded programs employ trained counselors who can help beneficiaries compare Medicare Advantage plans, evaluate Medigap policies, and select Part D prescription drug coverage.
The deadline for beneficiaries currently enrolled in a Medicare Advantage plan who wish to switch plans or transition to traditional Medicare is March 31 of each year.
Living with Uncertainty
Back in Conway, New Hampshire, Anthony Petchkis is adapting to his new reality with a mixture of resignation and anxiety. His transition to traditional Medicare meant losing the dental and vision coverage his Advantage plan had provided. A recent visit to a hearing specialist at Concord Hospital offered a stark illustration of the financial difference.
Under his previous Medicare Advantage plan, the same appointment would have cost a single $30 copayment. His new bills: $135 for the office visit, plus $55 for the hearing test. He is now applying for financial hardship assistance from the hospital system, hoping to get some charges reduced or waived.
The administrative complexity alone has been overwhelming for a 70-year-old managing multiple chronic conditions.
“It’s incredibly confusing,” Petchkis said, shaking his head. “They shouldn’t put elderly people through this kind of ordeal.”
He continues taking his eight daily medications faithfully, painting his mountain landscapes when his health permits, and hoping that nothing catastrophic happens before he can find more stable footing. For millions of seniors across rural America, that fragile hope may be all that remains of the Medicare Advantage promise.
