The Medicare open enrollment period runs from October 15 to December 7, setting insurers’ 2026 membership and revenue trajectories as beneficiaries select Medicare Advantage and Part D coverage.
The 2026 cycle is unfolding amid a projected MA enrollment decline, lower average star ratings, plan retrenchment and market exits, provider contract disruptions, and new CMS regulations.
1. CMS projects a decrease of 900,000 Medicare Advantage enrollees in 2026, despite continued availability of plans for 99% of beneficiaries. The expected decrease stems from higher premiums, utilization costs, and challenges related to new payment models. Industry-wide, MA plans are facing increasing financial losses, with a $5.7 billion underwriting loss recorded in 2024.
2. MA star ratings for 2026 show a dip in average ratings from 3.92 in 2025 to 3.65 in 2026. Eighteen contracts earned 5 stars, compared to seven last year. Major players such as Aetna and UnitedHealthcare maintained a strong performance, with over 78% and 81% of their members in 4+ star plans, respectively.
3. The average premium for MA plans will decrease slightly in 2026, from $16.40 to $14.00. For standalone Part D plans, the premium will drop by $3.81 to $34.50. Out-of-pocket costs for prescription drugs will also be capped at $2,100. Some insurers are pivoting resources to dual-eligible special needs plans (D-SNPs), with increased coverage options in several states. The standalone Part D market is contracting, with the number of plans dropping from 464 in 2025 to 360 in 2026.
4. Amid the market headwinds, the largest insurers are scaling back their MA offerings nationwide and some smaller carriers are exiting the market entirely.
5. A growing number of health systems are discontinuing contracts with certain MA plans due to administrative difficulties, including high prior authorization denial rates and slow payments. These issues, combined with the financial pressures faced by insurers, may impact plan offerings and beneficiary access to some providers.
6. CMS recently finalized new rules to improve transparency around provider directories, mandating MA plans to submit accurate provider data for inclusion in the Medicare Plan Finder, effective in January. Additionally, CMS will introduce a special election period next year for beneficiaries impacted by incorrect provider directory information.
