Medicare Advantage growth is slowing down as payers prioritize margins over membership, and some states are recording a decline in enrollment for the first time, according to a Feb. 26 report from HealthScape Advisors and Chartis.
The report used CMS monthly enrollment, penetration, and star ratings data from 2022 through 2026 and surveyed government program leaders at more than 35 health plans in January 2026 to assess the current market outlook.
Nine notes:
1. Medicare Advantage enrollment grew just 2.5% in 2026 to a record 35.4 million beneficiaries, down from 3.6% in 2025.
2. Seven states saw MA enrollment decline for the first time: Vermont, Wyoming, New Hampshire, Idaho, Minnesota, Maryland, and South Dakota. The declines were largely driven by health plan exits and market retreats rather than shifts in enrollee preference.
3. Traditional Medicare enrollment grew by 600,000 beneficiaries this year, reversing years of decline. Standalone prescription drug plan enrollment rose by 1.7 million members as fewer seniors opted into MA.
4. Growth was heavily concentrated among a few players. Humana’s membership grew by 1.2 million members, a 21% increase, while UnitedHealthcare and Aetna pulled back. Newer plans like Devoted Health, Alignment Healthcare, and Clover Health now account for 3% of all MA enrollment nationally, up from 1.9% last year.
5. Special needs plan enrollment grew 12.2%, compared to 10.1% growth in 2025. Chronic condition SNPs were the biggest driver, with enrollment increasing 49% to 1.6 million. Humana, UnitedHealthcare, and Elevance collectively make up about 76% of the C-SNP market.
6. Total plan offerings fell for the third consecutive year. Non-SNP plan options dropped 8.6%, while PPO offerings decreased by 10%. Despite insurers’ strategic shift toward HMOs for cost management, 43% of seniors enrolled in PPO plans this year.
7. Only 67% of enrollees are in plans rated 4 stars or higher, down from 80% earlier in the decade. Just 2% of members are in a 5-star plan, down from 8% in 2024.
8. The survey found that 69% of MA leaders expect their enrollment to remain flat or contract in 2027. Nearly 70% anticipate offering less benefits next year, an increase from the 40% who said the same last year. No respondents predicted richer benefits.
9. Despite the short-term headwinds, no surveyed leaders indicated a negative five-year outlook for the MA market. The report recommends health plans make explicit stay-or-exit decisions, adopt multi-year profitability strategies, evaluate benefit ROI, deepen certain provider partnerships, and engage proactively on policy sustainability.
