UnitedHealth Group Inc. (NYSE: UNH) and CVS Health Corp. (NYSE: CVS) have announced plans to offer more Medicare Advantage plans with tighter provider networks starting in 2027. The move is attributed to rising medical costs and financing pressures within the healthcare system.
UnitedHealthcare President Bobby Hunter stated, “We can’t ignore the realities facing the healthcare system,” citing higher medical and drug bills and heavier use of care as drivers for the strategy shift.
According to the Centers for Medicare & Medicaid Services (CMS), Medicare Advantage premiums are projected to fall 16% in 2027, dropping to an average of $12 per month from $14.37 in 2026. CMS Administrator Dr. Mehmet Oz emphasized that while premiums are stabilizing, beneficiaries should review their coverage during open enrollment.
In response to these trends, UnitedHealthcare plans to pull back on preferred provider organization (PPO) offerings, which tend to be more expensive for insurers. The company stated that 66% of members will be able to choose between an HMO or a PPO in 2027, down from 70% in 2026. Conversely, Aetna is expanding health maintenance organization (HMO) plans, which typically utilize smaller, lower-cost provider networks.
Other carriers are also adjusting their footprints. Humana will offer plans in more than 80% of U.S. counties next year, down from 85% in 2026. TD Cowen analyst Ryan Langston estimated that Aetna will lose approximately 950,000 members next year as it exits certain states, reducing its presence to 41 states in 2027 from 43 this year.
CMS projects that 34 million people will be enrolled in Medicare Advantage in 2027, representing about 47.4% of all Medicare beneficiaries. Open enrollment for 2027 coverage runs from October 15 through December 7.
