Dive Brief:
- Medicare Advantage enrollment is set to decline next year, according to the CMS, marking the first time in years the privatized Medicare plans could enroll fewer beneficiaries.
- Insurers project 34 million people will sign up for MA plans in 2026, falling from 34.9 million this year, the CMS said in a Friday release. Enrollment in MA will make up about 48% of the Medicare population next year, down from half in 2025.
- Though the CMS anticipates premiums, benefits and plan choices will “remain stable” next year, analysts said they expect to see benefit reductions when the regulator releases its plan finder tool later this week.
Dive Insight:
The average monthly plan premium across all MA plans next year is estimated to fall to $14 from $16.40 in 2025, according to the CMS.
Nearly all beneficiaries will have access to an available health plan, and 97% of enrollees will have the choice of 10 or more plans. However, the total number of MA plans nationally will fall from 5,633 in 2025 to approximately 5,600 in 2026.
The MA enrollment projections come as the privatized plans have become an increasingly popular choice for seniors, with the share of the Medicare population enrolled in MA plans growing for nearly two decades, according to health policy research firm KFF.
Next year could end that long period of growth. MA enrollment is set to decline 2.6% year over year, compared with 3.7% growth in 2025, according to Sunday a note from TD Cowen analysts.
However, the CMS said it expects enrollment in MA plans will be “more robust than the plans’ projections,” given historical experience and trends.
Market watchers will learn more details on plan design when the CMS releases its Medicare Plan Finder, a tool used to help beneficiaries compare Medicare options, on Oct. 1. The release will likely reflect insurers “pricing for margin expansion/stability over enrollment growth in 2026,” TD Cowen analysts wrote.
Though MA has typically been a lucrative program, payers have struggled with increased utilization in recent years as enrollees sought out more care in the wake of the COVID-19 pandemic. Some insurers, like CVS and Humana, already cut offerings for the 2025 plan year in an attempt to preserve profits, and UnitedHealth said it would scale back benefits and exit markets in 2026 to recover.
For prescription coverage, the average premium for Part D standalone drug plans is projected to fall from $38.31 in 2025 to $34.50 in 2026. The average Part D premium for MA plans that include prescription drug coverage will decline from $13.32 in 2025 to $11.50 next year, according to the CMS.
The regulator had released data in July that projected Part D premiums would likely rise next year as insurers submitted high bids for the prescription drug plans. But the CMS said it took “unprecedented action” to keep premiums low, negotiating terms and rejecting standalone plan bids that included significant increases in cost sharing or benefit cuts, the regulator said Friday.
Open enrollment for Medicare plans is set to run from Oct. 15 through Dec. 7.
