Medicare Advantage plans shift more costs onto seniors in 2027

STAT NEWS

People who have a Medicare Advantage plan — and wind up needing care and prescriptions next year — are in for a rude awakening.

Medicare Advantage insurers are raising out-of-pocket costs for enrollees, drastically cutting money for dental work and other benefits, and eliminating plans that have broad networks of hospitals and doctors, according to federal data released this week and analyzed by STAT and several investment firms. That could result in more shock for older adults, like discovering their doctor is no longer accepted by their plan, if they don’t shop carefully during Medicare’s annual enrollment period for 2027 plans, which starts Oct. 15.

Big companies like UnitedHealth Group, Humana, and others are chasing higher profits by pruning benefits, after investors grew dissatisfied with margins that were smaller than the insurers had promised. The changes in plans even come even after the industry won a payment increase and delayed reforms from the Trump administration in April.

“Wall Street is telling all these companies that they need to get their margins back to target levels,” said Whit Mayo, a senior research analyst at Leerink Partners who covers health insurers. “There’s only one way to grow margins right now, and that’s to cut benefits.”

The insurers are focusing more on niche Medicare Advantage plans that enroll lower-income and more complex patients — called “special needs plans” — that are historically twice as profitable as regular plans.

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