Projected Medicare Advantage Enrollment Decline in 2026

For nearly twenty years, Medicare Advantage has been the growth engine of American healthcare, steadily attracting seniors away from traditional Medicare with promises of lower premiums, additional benefits, and coordinated care. That era may be ending. According to projections released by the Centers for Medicare & Medicaid Services on September 26, 2025, MA enrollment is projected to decline in 2026 based on plan submissions—marking what would be the first time in nearly two decades that these privatized Medicare plans enroll fewer beneficiaries than the previous year.

The numbers are striking. Based on insurer projections submitted to CMS, approximately 34 million people are expected to sign up for MA plans in 2026, down from 34.9 million in 2025—a decline of roughly 900,000 enrollees, or approximately 2.6%. While modest in percentage terms, the symbolic significance is profound. In 2025, MA plans covered half of all Medicare beneficiaries. By 2026, that proportion is projected to fall to 48%.

However, CMS noted in its September 26 release that it expects actual enrollment in MA plans will be “more robust than the plans’ projections,” given historical experience and trends. This suggests the final enrollment numbers may exceed current estimates, though the directional shift toward slower or potentially negative growth remains significant.

For physicians, this projected shift carries important implications affecting reimbursement rates, prior authorization requirements, quality metrics, and patient panel composition. Understanding why MA enrollment projections show decline and what it could mean for healthcare delivery is essential for any physician serving Medicare patients.

The End of Inevitable Growth

Medicare Advantage’s growth trajectory has been one of the most consistent trends in American healthcare policy. According to the Kaiser Family Foundation, the share of Medicare beneficiaries enrolled in MA plans has grown steadily for nearly two decades, accelerating significantly in the 2010s as insurers refined their offerings and seniors became more comfortable with managed care models.

The appeal was straightforward: MA plans typically offered lower out-of-pocket costs than traditional Medicare, included prescription drug coverage, and often provided additional benefits like dental, vision, and fitness programs. For many seniors on fixed incomes, these enhanced benefits outweighed the trade-offs in provider choice and network restrictions.

But several factors have converged to potentially reverse this growth. The COVID-19 pandemic’s aftermath created utilization patterns that insurers struggled to predict. As pandemic-era restrictions lifted, many seniors who had deferred care sought treatment for conditions that had worsened without regular management. This surge caught many insurers off guard, leading to significant financial losses in 2023 and 2024.

Major insurers publicly acknowledged these challenges. UnitedHealth, the nation’s largest MA insurer, reported in investor communications that higher-than-expected medical costs driven by increased utilization were impacting profitability. CVS Health and Humana similarly cited elevated medical loss ratios as seniors returned to seeking care after pandemic-era deferrals. These insurers responded by cutting offerings for 2025, reducing benefits and exiting unprofitable markets. UnitedHealth announced it would further scale back benefits and exit additional markets in 2026 to recover from losses. These strategic retreats represent a fundamental shift—prioritizing profitability over growth.

What the Numbers Reveal

The CMS projections, based on data submitted by insurers, offer several telling data points. The total number of MA plans available nationally is projected to decline from 5,633 in 2025 to approximately 5,600 in 2026. The average monthly premium across all MA plans is estimated to fall to $14 in 2026 from $16.40 in 2025.

Lower premiums might seem positive, but industry analysts caution they may come with significant benefit reductions. According to industry analysis reported by Healthcare Dive, including assessments from TD Cowen analysts, insurers appear to be “pricing for margin expansion/stability over enrollment growth in 2026.” This represents a strategic shift from the growth-focused approach that characterized the MA market for the past two decades.

This potential strategic shift could have direct implications for physicians. When insurers prioritize margins over growth, they may implement tighter utilization management, more restrictive prior authorization requirements, and narrower networks. Physicians could face more administrative hurdles when providing care to MA patients or potentially find themselves excluded from networks as insurers concentrate their panels among lower-cost providers.

Despite the projected decline, CMS emphasizes that nearly all beneficiaries will still have access to an available health plan, and 97% of enrollees will have the choice of 10 or more plans. However, the reduction in total plans and strategic repositioning by major insurers suggest the competitive dynamics that drove benefit expansion in recent years may be shifting.

The Part D Prescription Drug Dimension

The average premium for Part D standalone drug plans is projected to fall from $38.31 in 2025 to $34.50 in 2026. For MA plans including prescription drug coverage, the average Part D premium will decline from $13.32 to $11.50.

These reductions are noteworthy because they contradict earlier projections. In July 2025, CMS data suggested Part D premiums would likely rise as insurers submitted high bids. However, the agency said it took “unprecedented action” to keep premiums low, negotiating terms and rejecting standalone plan bids that included significant cost increases or benefit cuts.

This regulatory intervention highlights the delicate balance CMS must maintain between ensuring affordable coverage and maintaining a viable marketplace where insurers can operate profitably. For physicians prescribing medications to MA patients, these changes could potentially affect formularies, prior authorization requirements, and patient cost sharing—even as nominal premiums decline.

The Audit Rule Controversy

Adding complexity to the MA landscape, a Texas federal court decision in late September 2025 vacated a CMS rule regarding audits of Medicare Advantage plans. This development, viewed as a victory for the MA industry including major insurers like Humana who challenged the rule, carries significant implications for how MA plans conduct medical billing reviews and could affect physician documentation requirements.

The vacated rule related to how CMS conducts Risk Adjustment Data Validation (RADV) audits of MA plans. These audits examine whether MA plans properly documented diagnosis codes submitted to justify their payment rates from CMS. Medicare Advantage operates on a risk-adjusted payment model—plans receive higher payments for sicker patients with more documented conditions, creating financial incentives for thorough documentation but also potential concerns about overcoding conditions that don’t significantly affect patient care.

The vacated CMS rule would have allowed the agency to extrapolate findings from sampled medical records to an insurer’s entire patient population when calculating overpayments. The court’s decision to strike down this extrapolation methodology limits CMS’s ability to recoup large overpayments based on audit samples—a significant development for MA plan financial exposure.

For physicians, this regulatory uncertainty could have practical implications. MA plans may adjust their approach to medical record reviews, potentially requesting more detailed documentation or conducting more frequent internal audits to ensure their risk adjustment coding can withstand scrutiny. Alternatively, without the threat of extrapolated penalties, some plans may become less aggressive in their documentation requirements, though this outcome is less certain.

The audit rule controversy exemplifies the ongoing tension in Medicare Advantage between adequate payment for caring for complex patients and preventing upcoding or fraud. Physicians practicing in the MA environment must navigate documentation requirements that serve both clinical and billing purposes, understanding that their medical records may be scrutinized not just for quality of care but also for coding accuracy and completeness.

What Physicians Should Watch For

The Medicare Plan Finder tool, released by CMS on October 1st, provides crucial details about 2026 plan design and benefit structures. Market analysis suggests this tool may reveal the extent of benefit reductions insurers have implemented to improve their financial performance.

Physicians should monitor several key areas:

Network Changes: Major insurers exiting markets or consolidating plans may mean some patients lose coverage access or find that you’re no longer in-network for their MA plan. Understanding network changes before open enrollment allows you to help patients make informed decisions about their coverage options.

Prior Authorization Requirements: As insurers potentially tighten utilization management, they may expand prior authorization requirements to additional services or medications. Being prepared for potential changes helps your practice manage administrative burden and avoid delays in patient care.

Quality Metric Emphasis: With enrollment growth slowing or potentially reversing, insurers may place greater emphasis on quality metrics and Stars ratings to differentiate their plans and justify their market position. This could mean increased focus on preventive care measures, chronic disease management, and patient satisfaction scores—all of which may affect physician performance assessments and potentially reimbursement.

Documentation Requirements: The ongoing uncertainty around RADV audits and risk adjustment following the Texas court decision may lead to changing documentation expectations. Some plans may request more detailed condition documentation, while others may adjust their approach based on the new regulatory landscape.

Benefit Design: Watch for changes in supplemental benefits like dental, vision, and over-the-counter allowances. If your patient population values these benefits highly, reductions could affect their plan satisfaction and potentially their enrollment decisions for 2026.

The Open Enrollment Period

Medicare open enrollment runs from October 15 through December 7, 2025. Given the projected enrollment decline and anticipated benefit changes, this enrollment period may see more movement than usual as beneficiaries reassess their options in light of potentially reduced benefits or exited plans.

Physicians’ offices often field questions from patients during open enrollment about which plans to choose. While physicians cannot and should not recommend specific insurance plans, understanding the landscape helps you provide context when patients ask about network participation or how different plans might affect their access to care.

Practical considerations for the 2025 open enrollment period:

Verify your network participation status for 2026 with major MA plans in your area

Prepare staff to answer basic questions about network status without straying into insurance advice

Consider providing educational materials about the differences between MA and traditional Medicare

Be prepared for patients who may switch plans or return to traditional Medicare mid-year if they’re dissatisfied with their 2026 MA plan

Long-Term Implications for Healthcare Delivery

If MA enrollment indeed plateaus or declines based on current projections, it could affect momentum behind value-based care initiatives. Many alternative payment models and accountable care organizations have thrived in the MA environment, where plans have more flexibility to structure payments and incentives than traditional Medicare allows. A shift back toward traditional Medicare could slow adoption of these models, or conversely, could prompt CMS to introduce more value-based payment options within traditional Medicare.

However, this inflection point could also prompt innovation. Insurers that successfully manage costs while maintaining attractive benefits may gain market share from competitors who cut too deeply. New entrants or regional plans with more efficient care delivery models might find opportunities in markets that national insurers have exited. And CMS may respond with policy changes to either stabilize MA or strengthen traditional Medicare’s competitive position.

Navigating Uncertainty

The projected MA enrollment decline for 2026—if it materializes—would mark a fundamental shift after nearly two decades of uninterrupted growth. For physicians, this transition creates both potential challenges and opportunities.

Potential challenges include greater administrative complexity as insurers may tighten utilization management, possible network instability as major plans exit markets or narrow their provider panels, and uncertainty about reimbursement levels and documentation requirements as the regulatory landscape around audits continues to evolve.

Opportunities lie in understanding these dynamics and positioning your practice to adapt effectively. Physicians who stay informed about network changes, maintain strong documentation practices, and help patients navigate their coverage options will be better positioned regardless of which direction the MA market moves.

Whether this represents a temporary pause or the beginning of a longer-term trend remains uncertain. The results of the October 15-December 7 open enrollment period will provide the first real test of whether insurer projections prove accurate or whether CMS’s more optimistic assessment prevails.

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