By admin 
According to the latest figures from the Centers for Medicare & Medicaid Services (CMS), approximately 35.5 million individuals were enrolled in a Medicare Advantage plan as of early February 2026. While this represents a raw increase from the 34.4 million enrollees recorded during the same period in 2025, the underlying mechanics of this growth tell a much grimmer story for the sector. The total year-over-year growth of roughly 3% is a shadow of the industry’s former self. Between 2017 and 2024, Medicare Advantage enrollment typically surged by 7% to 10% annually. More tellingly, during the critical Annual Enrollment Period (AEP)—the window from October 15 to December 7 when seniors actively choose or switch their coverage—enrollment grew by a meager 1%. This suggests that the vast majority of the "new" enrollees were not the result of aggressive marketing or expanded plan offerings, but rather the inevitable aging-in of the Baby Boomer generation, many of whom are finding a market with fewer choices and more expensive premiums.
The divergence in strategy between Humana and its peers marks a turning point in the business of healthcare. For years, the mantra among the "Big Five" insurers—UnitedHealthcare, Humana, Aetna, Elevance Health, and Cigna—was "growth at all costs." The logic was simple: capture as many lives as possible, leverage the federal government’s generous payment models, and optimize "Star Ratings" to trigger massive bonus payments. But in 2026, that logic has flipped for most. Faced with tightening federal reimbursements, a more aggressive regulatory environment under the Biden-Harris and subsequent administrations, and a sudden spike in medical utilization, most insurers have pivoted to a "margin over membership" strategy.
UnitedHealthcare and Aetna, in particular, have spent the last year aggressively pruning their portfolios. This "shedding" of enrollees is rarely a direct expulsion of members; instead, it is achieved through strategic "plan exits" from unprofitable counties and the "sunsetting" of plans that no longer meet internal profit thresholds. By withdrawing from certain geographic markets or significantly raising premiums and reducing extra benefits (such as dental, vision, or grocery stipends), these insurers effectively forced hundreds of thousands of seniors to find coverage elsewhere. For these corporate giants, losing a few hundred thousand members is a calculated sacrifice to ensure that the remaining millions of members are in plans that remain highly profitable.
Humana, however, has taken a different path, doubling down on its identity as a "Medicare-first" company. Having recently divested much of its commercial employer-sponsored business, Humana’s fortunes are now almost entirely tethered to the Medicare program. This focus allowed Humana to capture the market share left behind by its retreating competitors. While UnitedHealthcare and Aetna were cutting benefits to shore up their stock prices, Humana maintained a more aggressive posture in many markets, betting that it could achieve the necessary scale to offset the rising costs of care. This gamble, however, is not without risk, as Humana has faced its own challenges with Star Ratings and higher-than-expected medical loss ratios (MLR).
The primary catalyst for this industry-wide contraction is a "triple threat" of regulatory changes that have fundamentally altered the economics of Medicare Advantage. The first is the implementation of the V28 risk adjustment model. For years, insurers were able to maximize payments by meticulously documenting the chronic conditions of their members—a process critics called "upcoding." The V28 model, which is being phased in through 2026, significantly narrows the types of diagnoses that trigger higher payments, effectively cutting the revenue insurers receive per patient.
The second factor is the tightening of the Star Ratings system. CMS recently adjusted the "cut points" for how it awards the four- and five-star ratings that are essential for insurers to receive federal bonus payments. In the past, a majority of MA enrollees were in four-star plans or higher. Under the new, more stringent "Turing" methodology and other statistical adjustments, many plans saw their ratings tumble. For a large insurer, a drop from 4 stars to 3.5 stars can represent a loss of hundreds of millions of dollars in annual revenue. This has led to a flurry of lawsuits from insurers against the Department of Health and Human Services (HHS), but the immediate financial impact has already forced companies to scale back their offerings.
The third pressure point is the rising cost of medical care itself. Following the COVID-19 pandemic, healthcare utilization among seniors has surged. Procedures that were delayed for years—such as hip and knee replacements—are now being performed at record rates. Additionally, the rising cost of prescription drugs and the redesign of the Part D drug benefit under the Inflation Reduction Act have shifted more financial liability onto the insurers. In 2026, insurers are finding that the "medical loss ratio"—the percentage of premiums spent on actual clinical care—is creeping dangerously high, leaving less room for administrative costs and shareholder profits.
The consequences of this shift are being felt most acutely by the beneficiaries themselves. For years, Medicare Advantage was sold to seniors as the "better than free" alternative to traditional Medicare, often featuring $0 monthly premiums and a suite of "lifestyle" benefits like gym memberships and transportation to doctor appointments. In the current 2026 climate, those "extras" are disappearing. Seniors in many parts of the country are finding that their $0 premium plans now carry a monthly cost, or that their favorite doctors are no longer in-network as insurers narrow their provider lists to save money.
Industry analysts suggest that we are witnessing the "plateauing" of the private Medicare market. While the program still boasts a slight majority of the total Medicare population, the days of 10% annual growth are likely over. The market is maturing, and the low-hanging fruit of healthy, low-cost seniors has already been picked. What remains is a more complex, high-need population that requires more intensive care management—a task that is far more expensive than simply processing claims.
Looking ahead to 2027 and beyond, the industry’s survival will depend on its ability to adapt to a "value-based" world where the government pays for outcomes rather than just enrollment numbers. Humana’s decision to continue growing its member base suggests a belief that scale is the only way to survive these shrinking margins. By contrast, the retreat by UnitedHealthcare and others suggests a belief that the program’s current payment structure is no longer sustainable for a broad-market approach.
As the federal government continues to scrutinize the Medicare Advantage program for potential overpayments—which some estimates place at over $50 billion annually—the pressure on insurers is only expected to mount. The data from early 2026 serves as a clear signal: the gold rush in Medicare Advantage has ended. In its place is a disciplined, often ruthless competition for profitability, where "shedding" the most vulnerable or expensive enrollees has become a standard business tactic for almost everyone except the industry’s most specialized player. For the 35.5 million Americans enrolled in these plans, the coming years will likely be defined by higher costs, fewer choices, and a healthcare system that is increasingly focused on the bottom line.