Something big has been happening in the world of Medicare coverage. Major insurance companies like UnitedHealthcare, Humana, Aetna, Cigna, and Allstate are feeling the pressure of rising healthcare costs, tighter government rules, and something called medical loss ratios (MLR). MLR requires insurance companies to spend at least 80% or 85% of premium dollars on medical care, rather than on administrative costs or profits.

Source: CMS.gov – Medical Loss Ratio

In a move that's already being called the “Great Medicare Pullback,” there is a widespread reduction in Medicare Advantage plan offerings, network breadth, and benefits across regions. The pullback even includes Allstate Medigap plans exiting the Medicare space altogether! This pullback started late last year, and it seems to be carrying over to 2026.

UnitedHealthcare (UnitedHealth Group)

Strategic pullback: In response, United plans to exit MA plans covering over 600,000 members, with premium increases and benefit modifications expected in 2026. It aims to restore margins to 2–3% by 2026, down from larger past expectations.

Source: UnitedHealth Q2 2025 Remarks

Humana

Lower-than-expected membership decline: Humana revised its projected MA membership drop to ~500,000, down from an earlier 550K estimate—indicating better retention and bounce-back during open enrollment.

Star rating litigation risk: Humana faces a lawsuit to vacate its 2025 MA star ratings. If unsuccessful, falling ratings may reduce 2026 CMS bonuses and impact revenues.

Source: Morningstar – Humana Outlook

Aetna (CVS Health)

Better cost control: Aetna posted a favorable medical loss ratio of 89.9%, better than the 91% average of its peers, signaling improved underwriting performance in MA plans.

Repricing ahead: CVS plans to reprice roughly half of its group MA plans in 2026 to bring premiums in line with utilization and risk costs.

[Source: Reuters]

Financial Impacts on Insurers and Beneficiaries

With stricter oversight and lower reimbursement, profits on some plans became untenable. Plans facing tight margins chose to consolidate offerings—especially in rural or lower-density areas—reducing consumer options.

What does this mean for residents of Vero?

If you have a Medicare Advantage plan, your co-pays, deductibles, or monthly costs may increase. It may also mean that certain plans will no longer be offered in lower-performing markets. Last year marked the beginning of the pullback, where many plans increased co-pays and raised deductibles, and some PPO plans were not offered for 2025. This means that, for Vero residents, access to hospital systems may be limited—or not covered at all.

If you have a Medigap plan, it’s likely your premiums will increase as well. That’s why it’s more important than ever during this enrollment period to make sure you are still on a plan that suits your healthcare and financial needs for 2026.

The Great Medicare Pullback: What It Means for You and Your 2026 Coverage

Something big is happening in the world of Medicare coverage. Major insurance companies like UnitedHealthcare, Humana, Aetna, Cigna, and Allstate are feeling the pressure of rising healthcare costs, tighter government rules, and something called the medical loss ratio (MLR).

MLR requires insurance companies to spend at least 80% or 85% of premium dollars on medical care, rather than on administrative costs or profits. That means if insurers spend too much on non-medical expenses—or underestimate how much care their members will need—they’re forced to either raise premiums, cut benefits, or exit certain markets altogether.

➡️ Learn more about MLR on CMS.gov

In a move that's already being called the “Great Medicare Pullback,” we're seeing a widespread reduction in Medicare Advantage plan options, narrower networks, and fewer benefits being offered across different regions. And it’s not just Advantage plans—Allstate recently announced its exit from the Medigap (Medicare Supplement) space, leaving even fewer options for seniors looking to pair Original Medicare with supplemental coverage.

🔍 What’s Driving This Pullback?

Let’s take a closer look at what each major insurance company shared during their recent earnings calls—and how those financial realities are shaping the changes we're seeing in Medicare plans.

UnitedHealthcare (UnitedHealth Group)

Strategic pullback:

UnitedHealthcare plans to exit Medicare Advantage (MA) plans that currently serve over 600,000 members. In addition, it will be increasing premiums and modifying benefits in 2026. The goal? To restore profit margins to 2–3% by 2026, after falling below expectations.

📄 Read their Q2 2025 earnings report

Humana

Lower-than-expected membership loss:

Humana adjusted its projected MA membership decline to around 500,000, slightly better than the previously estimated 550,000. This shows that while losses are still happening, retention during open enrollment was stronger than anticipated.

Star rating litigation risk:

Humana is also facing a lawsuit aimed at overturning its 2025 MA star ratings. If the lawsuit fails, lower star ratings could mean reduced bonus payments from Medicare in 2026, putting further pressure on revenues.

📄 More on Humana’s financial outlook

Aetna (CVS Health)

Better cost control:

Aetna managed to post a medical loss ratio of 89.9%, which is actually better than the industry average (~91%). This suggests they were more accurate in predicting costs and managing claims.

Repricing ahead:

Even so, Aetna plans to reprice about half of its group Medicare plans in 2026 to better reflect the true cost of care and usage trends.

Financial Impact: Shrinking Margins, Shrinking Options

With increased oversight and lower federal reimbursements, many insurance companies are finding it hard to turn a profit on certain plans. As a result, they’re consolidating plan offerings—especially in rural or lower-density areas where medical costs are harder to predict and control. Unfortunately, that means fewer options for consumers in those communities.

🧾 What About Medigap? Allstate Exits the Market

It’s not just Medicare Advantage plans feeling the squeeze. Allstate, a provider of Medigap (Medicare Supplement) plans, recently announced it will be exiting the Medicare market altogether. While current policyholders can keep their plans (for now), Allstate is no longer accepting new applicants.

What does that mean? Over time, policyholders may face premium increases as the risk pool shrinks, and fewer new carriers may step in to fill the gap.

📄 More on Allstate’s exit

📍 What This Means for Residents of Vero Beach

If you live in Vero Beach, these changes will likely hit close to home. Here's what you might expect:

• If you’re on a Medicare Advantage plan, you may see higher monthly costs, increased co-pays, or higher deductibles.

• Some plans may not be available in your area anymore, especially those that didn’t perform well financially.

• PPO plans, which offer broader doctor and hospital access, have already been reduced for 2025—and more changes may be coming in 2026.

• If you rely on specific hospital systems, your access might now be limited—or not covered at all under your current plan.

• If you have a Medigap plan, there's a good chance your monthly premiums will increase.

✅ What You Should Do Now

This year's open enrollment period is going to be more important than ever. Here are a few tips to help you stay ahead of the changes:

1. Review your current plan benefits—don’t assume they’re staying the same.

2. Check your provider network to make sure your doctors and hospitals are still covered.

3. Compare all available plans—Medicare Advantage, Original Medicare, and Medigap—to see which fits your needs best.

4. Look into guaranteed issue rights if your current Medigap carrier is exiting or raising rates significantly.

🧠 Final Thoughts

The Great Medicare Pullback is more than just a headline—it’s a shift in how health insurance companies are managing their Medicare business. Rising costs, stricter rules, and tighter margins are forcing insurers to cut back, raise prices, and limit options.

Whether you’re on a Medicare Advantage plan or have Medigap coverage, these changes could impact your healthcare access and costs. Make sure you’re reviewing your options carefully this enrollment season so that your 2026 plan still meets your health—and budget—needs.

Want help reviewing your Medicare options this year? Reach out to a trusted Medicare advisor, or visit Medicare.gov to compare plans in your area.