Medicare Advantage Companies Focus on Profits Over Care as Open Enrollment Ends

The open enrollment period for Medicare ends on December 7, and chaos in the privatized Medicare Advantage market has left many who depend on MA plans confused and possibly uninsured in 2026.

Health insurance companies that sponsor Medicare Advantage (MA) plans have aggressively recruited members in the past. Low or $0 premiums plus supplemental benefits that traditional Medicare is not authorized by Congress to cover — dental, vision and hearing care — have attracted increasing numbers of seniors. The many disadvantages, including the need to get preauthorization for procedures or medicines your doctor has prescribed or the narrow group of health professionals that are in-network in many MA plans, are not mentioned in advertisements by brokers hired to recruit members. In 2025, more than half (54 percent) of Medicare beneficiaries — 34.1 million seniors — were in MA plans. UnitedHealthcare, which has the most enrollees in its MA plans, had 9.9 million members in 2025.

During the pandemic and for a time following it, seniors put off seeking medical care because of a concern that they would be vulnerable to COVID-19 or other viruses that might be circulating in hospitals. The insurance companies that sponsor MA plans — UnitedHealthcare, Humana, Elevance, Centene, Molina and others — were happy to collect premiums from Medicare and report high profits to Wall Street. But when fear of going to the hospital subsided, patients sought health care that they had postponed. Profit margins for MA plans began to shrink and Wall Street analysts showed their displeasure. Year-to-date (as of December 1, 2025), shares of most major health insurers that sponsor MA plans had fallen, with UnitedHealthcare, Centene and Molina down the most at -36.11 percent, -37.46 percent and -50.18 percent respectively. Even Humana is down at -4.52 percent, year-to-date.

Increasing Profit Pressures

MA plans are under pressure from financial markets to increase margins. And most have taken steps to do just that. UnitedHealthcare, for example, has increased deductibles on prescription drugs and reduced benefits for over-the-counter medications. Like many insurers offering MA plans, it now charges coinsurance on preferred brand name medications instead of set copayments. This means that members will have to pay more for higher priced drugs. These changes, according to health consulting company Jeffries, mean that UnitedHealthcare is likely to “extract more profit from its plans, even as they attract fewer members.”

It turns out that providing health care to MA plan members is not what MA plans are about. The MA business model is about finding ways to maintain the high profits that come with collecting premiums while limiting utilization of necessary health care via denial of required prior approvals and by selecting healthier members less likely to need costly care. At the end of the current open enrollment period, MA plans expect to enroll approximately 48 percent of seniors receiving Medicare, although this may not be the final figure. This is the first time since passage of the Affordable Care Act in 2010 that the share of Medicare beneficiaries enrolled in MA plans is expected to decline.

Humana, the health insurer with the second largest number of MA beneficiaries, has shown the way forward. It cut its least profitable MA plans last year; its number of enrollees fell during the 2024 open enrollment period from 6.2 million to 5.8 million members, and its remaining plans became less generous with skinnier supplemental benefits and some high priced medications eliminated from its drug benefits. Now, many other health insurers have followed suit and changed benefits and drug formularies to encourage sicker and more costly members to drop their memberships in its MA plans. In this year’s open enrollment period, an estimated 3 million people are in MA plans that are being terminated and will have to find new plans that will accept them.

MA plans still want members, but only healthier seniors. Many major plans have cut commissions to brokers, sometimes eliminating them altogether, to discourage them from signing up members likely to require expensive care. Humana, which had earlier cut its benefits, has kept them stable for 2026; its enrollments are increasing nationwide, somewhat to its chagrin.

Brokers are required to help seniors choose the plans most suited to their needs. But they have little incentive to sign them up for plans that do not pay a commission for their work. State insurance departments have become concerned about the effects of health insurance companies reducing broker commissions and discouraging them from enrolling seniors expected to be more costly to care for in MA plans. Since October of this year, Idaho, Delaware, Mississippi, Montana, New Hampshire, North Carolina, Oklahoma and South Carolina have issued warnings to health insurance companies that these practices may violate those states’ laws. However, they are not well-positioned to actually halt the practices.

The Centers for Medicare and Medicaid Services (CMS), the federal agency that governs MA plans, has so far failed to intervene. Mississippi Insurance Commissioner Mike Chaney noted that regulation of MA health insurance plans is ultimately the responsibility of the federal government, but he does not expect CMS to act:

“What CMS does is send somebody that has no authority, doesn’t know a lot to answer the questions of the [state insurance] commissioners, and then just everybody gets mad … The only way you’re going to get it done is to have Dr. Oz or whoever runs the damn program to come down and sit down and say, ‘This is what the program’s about.’”

Brokers anticipate even more phone calls from people looking to find coverage.

White House Policies Will Increase Medicare Advantage Profits

The Trump administration has so far failed to help Americans hold onto their health insurance — whether it is rising premiums on the ACA exchanges, access to MA plans, or cuts in Medicaid enrollment that pose threats to insurance coverage. And now it has taken steps to actually increase MA plan profits. Under President Trump, CMS has proposed changes in how it calculates star ratings — the one to five stars it awards to MA plans as a measure of an MA plan’s quality performance. A plan that gets 4 or 5 stars receives lucrative bonuses.

Among the changes being proposed by CMS is reinstating the ‘reward factor’ and eliminating a dozen star ratings measures it views as dealing with administrative matters rather than patient outcomes and satisfaction. These include a star rating measure that focuses on how well an insurance company’s call centers respond to phone calls from members. This is the quality measure that a number of insurance companies have sued CMS over with mixed results, claiming that some of their plans were downgraded because of missed or dropped phone calls. Humana, in particular, will benefit from removal of the call center quality metric. CMS projects that the changes will increase insurance companies’ revenue by a total of $13.2 billion between 2028 and 2036 as star ratings go up for more insurers.

In 2023, CMS announced that it was dropping the reward factor and was switching by 2027 to a health equity index. MA plans would have been rewarded for reducing health disparities for people of color and for insuring more vulnerable groups such as those with disabilities or living in rural areas. This changed in late November 2025 with CMS’s proposal to drop the health equity index and reinstate the reward factor.

For 60 years or more, health policy and the inequities of the US health system have been shaped by government actions. CMS had just begun to take steps to address inequities built into the system when Trump appointees took the reins at the Department of Health and Human Services and Dr. Mehmet Oz took over as head of CMS. Even those feeble beginnings have now been abandoned.