Medicare Advantage faces first enrollment dip as seniors rethink coverage

The private Medicare Advantage program is projected to record its first decline in participation in more than a decade, according to plan submissions made to the Centers for Medicare & Medicaid Services (CMS). Insurers estimate that enrollment will fall from 34.9 million beneficiaries in 2025 to 34 million in 2026, trimming the product’s share of the overall Medicare market from 50 percent to about 48 percent.

Insurers predict lower growth, while regulators expect stability

The gap between the industry’s forecast and the government’s outlook marks a notable change. CMS officials say they anticipate “stable” Medicare Advantage enrollment next year, a stance that contrasts with the carriers’ more conservative projections. Either result would break the streak of year-over-year gains that lifted Medicare Advantage from 25 percent of all Medicare beneficiaries in 2010 to one out of every two today.

Matthew Fiedler, senior fellow at the Brookings Institution’s Center on Health Policy, noted that even a flat trend would represent a departure from the steady expansion seen for years. “If enrollment is stable or declines, it would be a break from what we’ve observed for decades,” he said.

Open enrollment period begins 15 October

The new projections arrive ahead of Medicare’s annual open-enrollment window, which runs from 15 October to 7 December. During this period, approximately 66 million people eligible for Medicare can adjust or switch their health and prescription-drug plans for the coming year.

Rising healthcare costs are a central concern for many beneficiaries as they review their options. Medicare Advantage plans generally include extra benefits—such as dental, vision and hearing coverage—and set a yearly cap on out-of-pocket spending. In exchange, members often face narrower provider networks and may need referrals to see specialists. Traditional, or “original,” Medicare allows broader provider choice but lacks a built-in limit on annual expenses unless beneficiaries buy supplemental coverage.

Shift in insurer strategy influences benefits

Industry observers link the potential enrollment drop to changing priorities among insurers. Over the past several years, carriers competed aggressively on enhanced benefits to attract members. Executives are now signaling a greater focus on profitability rather than sheer growth, which could translate into less generous benefit packages for 2026.

“As Medicare Advantage plan benefits become less rich, we anticipate more seniors may choose original Medicare instead,” said Cobi Blumenfeld-Gantz, chief executive of Chapter, a firm that assists consumers with Medicare decisions.

Benefit reductions—combined with narrow networks—may prompt cost-conscious enrollees to reconsider whether the trade-offs still favor Medicare Advantage. Analysts also point to the possibility that some higher-cost members could migrate back to traditional Medicare if they perceive that comprehensive medical access outweighs ancillary perks.

Market share still near historic high

Despite the projected decline, Medicare Advantage remains at a historically high share of the market. A one-to-two-percentage-point shift would still leave nearly half of Medicare participants enrolled in private plans. CMS emphasized that the agency’s own projections call for “robust” participation next year, though officials did not specify exact figures.

For policymakers, any enrollment slowdown could ease federal spending growth. Payments to Medicare Advantage plans have risen alongside membership, outpacing the growth rate of underlying Medicare costs in some years. A plateau in enrollment would also give regulators space to refine risk-adjustment formulas and oversight efforts without managing rapid expansion at the same time.

Key dates and considerations for beneficiaries

Beneficiaries weighing their options for 2026 are encouraged to:

• Review plan changes, including premiums, copayments and covered services, before the 7 December deadline.
• Compare provider networks to confirm that preferred physicians and hospitals remain in-network.
• Factor prescription-drug coverage into overall cost estimates, as formularies and pharmacy networks may shift.
• Assess the value of supplemental benefits in light of potential reductions or higher cost-sharing.

Those who do not select a new plan during open enrollment will be automatically re-enrolled in their current option, subject to any changes outlined in the plan’s annual notice of modification.

For additional perspectives on managing healthcare expenses in retirement, see the recent update in our Finance News Update section.

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