Medicare Advantage enrollments expected to drop next year

The Centers for Medicare & Medicaid Services (CMS) predicts a decline in Medicare Advantage (MA) enrollment, estimating nearly 1 million fewer participants by 2026, with total enrollment dropping from 34.9 million to approximately 34 million.

CMS maintains that diverse and affordable coverage options will remain available, projecting stable coverage premiums and medical benefits for MA and Medicare Part D plans despite the expected enrollment decline.

The percentage of Medicare beneficiaries enrolled in MA plans is forecast to decrease from 50% in 2025 to 48% in 2026, while the average monthly premium for MA plans is expected to decline from $16.40 to $14.00.

The total number of MA plans available is projected to be around 5,600 in 2026, with 99% of Medicare members still having access to at least one plan, and average premiums for Medicare Part D plans also expected to drop.

Recommendation Rating: Strong Insights on Medicare Advantage Trends

The Centers for Medicare & Medicaid Services (CMS) has projected a significant decline in enrollment for Medicare Advantage (MA), the private sector alternatives to traditional Medicare, with an anticipated drop of nearly 1 million participants by 2026. This forecast comes ahead of the upcoming Medicare Open Enrollment period, which is scheduled from October 15 to December 7, allowing eligible Americans, particularly those aged 65 and older, to review their coverage options for the following year.

CMS Administrator Mehmet Oz emphasized the continued availability of diverse and affordable coverage choices for Medicare beneficiaries in 2026. He noted the agency's outlook for coverage premiums and medical benefits in both MA and Medicare Part D plans remains stable.

Despite these reassurances, CMS predicts that MA enrollments will fall approximately 3% to 34 million in 2026, down from 34.9 million this year. This trend poses challenges for health insurers heavily invested in MA, including UnitedHealth (NYSE:UNH) and Humana (NYSE:HUM). Other key competitors in the space are CVS Health (NYSE:CVS), Cigna (CI), Clover Health (CLOV), and Alignment Healthcare (NASDAQ:ALHC).

Notably, CMS also expressed optimism based on historical trends, suggesting that the actual enrollment in MA may exceed current projections, indicating a stabilization in participant numbers.

In terms of percentage, the share of Medicare beneficiaries enrolled in MA plans is forecasted to decrease from 50% in 2025 to 48% in 2026. Alongside this, the average monthly premium for all MA plans is expected to decline from $16.40 to $14.00.

Additionally, the total number of MA plans available nationwide is anticipated to be around 5,600 in 2026, reflecting a slight reduction from 5,633 in the prior year. Remarkably, 99% of Medicare members will still have access to at least one plan.

For those enrolled in Medicare Part D, a standalone coverage plan's average total premium is predicted to decrease by $3.81, resulting in an average premium of $34.50 for 2026. Meanwhile, the average total premium for MA plans that include prescription drug coverage is estimated to drop by $1.82, bringing it to $11.50.