The landscape of Medicare Advantage plans is shifting dramatically, leaving millions of beneficiaries facing uncertainty as the novel year approaches. While Medicare Advantage plans have grown in popularity, offering an alternative to traditional Medicare, a wave of insurer exits is creating significant disruption, particularly for those in certain regions. For many, learning during open enrollment that their Medicare Advantage plan is ending is a jarring experience, forcing a scramble to find new coverage for 2026.
The changes are particularly acute in Vermont, where approximately 92% of Medicare Advantage enrollees are expected to necessitate to find new plans. Nationally, an estimated 2.9 million Medicare Advantage beneficiaries – roughly one in ten – will be forced to change their insurance coverage due to their prior plan leaving the market, a phenomenon known as “forced disenrollment.” This represents a substantial increase from recent years, signaling a potential reckoning for the Medicare Advantage program.
Medicare Advantage Market Instability
The surge in forced disenrollment marks a stark contrast to the relative stability of the Medicare Advantage market between 2018, and 2024. During that period, the average annual rate of forced disenrollment was just 1%. However, rates jumped to 6.9% in 2025 and are projected to reach approximately 10% in 2026, according to recent analyses of market participation. This dramatic shift is driven by payment reforms and financial pressures impacting insurance providers.
These changes aren’t uniform across the country. Rural areas are expected to be disproportionately affected by plan exits, potentially limiting access to care for vulnerable populations. The impact is also concentrated among specific insurers. In Vermont, for example, both UnitedHealthcare and Vermont Blue Advantage have decided not to renew their individual Medicare Advantage plans for 2026. These two insurers collectively cover the majority – over 51,600 people – enrolled in Medicare Advantage plans in the state. Vermont Blue Advantage alone serves 26,000 individuals, while UnitedHealthcare covers an additional 7,800.
Vermont’s Shrinking Medicare Advantage Options
The situation in Vermont is particularly dire. As of January 1, 2026, Humana will be the only remaining Medicare Advantage provider in the state, and even then, its plans will only be available in five counties: Bennington, Caledonia, Orange, Windham, and Windsor. Residents in other counties will have no Medicare Advantage options available to them. Vermont Blue Advantage will cease offering all its Medicare Advantage plans at the conclude of 2025, and members enrolled in these discontinued plans will have coverage through December 31, 2025. They will then need to select a new Medicare Advantage plan or a Medicare Supplement plan.
The Vermont Department of Financial Regulation has urged residents to carefully consider their options during the Medicare Advantage Annual Enrollment Period, which runs from October 15 through December 7. Commissioner Kaj Samsom acknowledged the disruption, stating, “it’s particularly disruptive for seniors to have limited options to these plans.”
National Trends and Contributing Factors
The upheaval in Vermont reflects a broader national trend. The Centers for Medicare & Medicaid Services (CMS) data reveals that all but one provider in the state will discontinue coverage for 2026. Several factors are contributing to this instability. Changes to Medicare Advantage risk adjustment policies, designed to address overpayments to insurers, are playing a significant role. These policies aim to level the playing field between Medicare Advantage and traditional Medicare, but they are also impacting insurer profitability and leading some to reassess their participation in the program.
The financial pressures on Medicare Advantage plans are also exacerbated by rising healthcare costs and increasing enrollment. As more beneficiaries choose Medicare Advantage, insurers face greater financial risk, particularly for those with complex health needs. This has led some insurers to exit markets where they perceive the risk to be too high.
Understanding Your Options
For beneficiaries facing the loss of their Medicare Advantage plan, several options are available. The most common alternative is to enroll in traditional Medicare, which provides coverage through a fee-for-service model. Traditional Medicare can be supplemented with a Medicare Supplement Insurance (Medigap) plan, which helps cover out-of-pocket costs. Beneficiaries who choose to switch to traditional Medicare may be eligible for a guaranteed issue open enrollment period for Medigap plans, meaning they cannot be denied coverage due to pre-existing conditions.
In Vermont, individuals whose coverage ends on December 31, 2025, have guaranteed issue rights in the Medicare Supplement market until March 4, 2026. The notice received from their insurer announcing the plan withdrawal serves as proof of eligibility for these rights. It’s crucial to retain this notice.
Another option is to select a different Medicare Advantage plan, if one is available in their area. However, it’s essential to carefully consider the network restrictions and coverage limitations of any new plan before enrolling. Not all Medicare Advantage plans have the same provider networks, and it’s important to ensure that your preferred doctors and hospitals are included in the plan’s network.
The Future of Medicare Advantage
The current disruptions in the Medicare Advantage market raise questions about the future of the program. While Medicare Advantage has been a popular choice for many beneficiaries, the recent wave of insurer exits suggests that the program may be facing challenges. The CMS is closely monitoring the situation and may consider further adjustments to the risk adjustment policies to ensure the long-term stability of the program.
The changes also highlight the importance of informed decision-making for Medicare beneficiaries. It’s crucial to carefully evaluate all available options and choose a plan that meets your individual healthcare needs. Resources such as the Medicare website (https://www.medicare.gov/) and the State Health Insurance Assistance Program (SHIP) can provide valuable assistance in navigating the complexities of Medicare.
Key Takeaways
- Millions of Medicare Advantage beneficiaries are facing plan changes in 2026 due to insurer exits.
- Vermont is particularly affected, with Humana becoming the sole remaining provider in only five counties.
- Changes to Medicare Advantage risk adjustment policies are a major driver of the instability.
- Beneficiaries have options, including traditional Medicare and Medicare Supplement plans.
- Careful evaluation of plan networks and coverage is essential.
The Medicare Advantage Annual Enrollment Period is a critical time for beneficiaries to review their options and make informed decisions about their healthcare coverage. The next key date to watch is December 7, 2025, the end of the Annual Enrollment Period. We encourage readers to share their experiences and insights in the comments below.