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Jump to Key Points NEW YORK, Oct 1(Reuters) - US health insurers including UnitedHealthcare and CVS Health's Aetna will shift to offer more Medicare Advantage plans that limit provider access for enrolled users, the companies said on Thursday.
"We can't ignore the realities facing the healthcare system," said Bobby Hunter, president at UnitedHealthcare. "Funding pressures, rising medical costs, rising drug costs, and increased utilization are affecting every part of healthcare."
UnitedHealth, Aetna and other insurers operate Medicare Advantage plans for adults aged 65 and older and people with disabilities, on behalf of the government.
About 34 million people are expected to be covered by the plans in 2027, a decline of 6%, the government said earlier this week based on feedback from insurers.
- 2027 Medicare Advantage: insurers shifting toward narrower provider networks.
- UnitedHealthcare exiting markets with higher PPO mix; PPOs costlier to operate.
- Aetna expanding HMO plans; HMO networks typically smaller, lower-cost.
- Medicare Advantage enrollment projected ~34M in 2027; ↓6% vs prior estimate.
- Government reimbursement cuts since 2024 + rising utilization/drug costs cited.
Hunter said UnitedHealth next year will exit locations where it currently offers a higher proportion of preferred provider organizations, or those that give members an option to see providers outside of the plan network. Such plans are more expensive for insurers to operate.
Aetna said in a Thursday news release it is expanding health maintenance organization plans, or plans that limit coverage to a small network of typically low-cost providers.
Rival Humana next year will offer plans in over 80% of US counties, down from 85% in 2026, the company said in a press release.
Ryan Langston, an analyst at TD Cowen, said in a note that Aetna will shed an estimated 950,000 enrollees next year as it withdraws from some states. Aetna will offer plans in 41 states in 2027, down from 43 this year.
A UnitedHealth spokesperson said 66% of members will have access to both a health maintenance organization and a preferred provider organization, down from 70% in 2026.
During quarterly results conference calls, insurers have said government reimbursement has not kept up with rising medical costs. The US government has been cutting back payments to companies operating the plans since 2024 to reduce spending.
The Centers for Medicare and Medicaid Services said on Monday it expects Medicare Advantage premiums to drop more than 16% next year to an average of $12 from $14.37.
UnitedHealthcare manages the largest Medicare Advantage business, with Humana and CVS Health's Aetna second and third, respectively, according to KFF data.
Insurers last year said higher-than-expected use of medical services in their Medicare businesses led to them exit counties that were less profitable.
(Reporting by Amina Niasse; Editing by Jonathan Spicer )
