By Amina Niasse
(Reuters) -CVS Health, Humana and UnitedHealth Group will pull back on Medicare Advantage offerings next year, the companies said on Wednesday, as the health insurance industry braces for more decreases in government reimbursement.
The U.S. government has been cutting back payments in the privately-run insurance program for people aged 65 and older or with disabilities since 2024 with an aim of reducing spending.
CVS Health’s Aetna insurance business will operate prescription drug plans in 100 fewer U.S. counties than it did in 2025, and rival Humana will cut plans back to 85% of U.S. counties next year, down from 89% in 2025. UnitedHealth plans to stop operating plans in 109 U.S. counties, affecting about 180,000 people, the company said.
UnitedHealth manages the largest Medicare Advantage business, with Humana and CVS Health second and fourth-largest, respectively.
INSURERS COPE WITH UNEXPECTED COST INCREASES
Insurers this year have said higher-than-expected use of medical services in their Medicare businesses have led to their exits from less profitable markets. They are also receiving fewer Medicare payments related to patient health conditions.
In second-quarter earnings calls, insurers including UnitedHealthcare, CVS’s Aetna and Centene signaled plan reductions in response to lower reimbursements expected in their government-sponsored businesses.
“The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs and increased utilization have created headwinds that no organization can ignore,” said Bobby Hunter, who runs the company’s government programs, in a Tuesday press briefing.
The companies will also reduce operations by state, with Humana providing plans in 46 states in 2026, down from 48 this year. Aetna will provide plans in 43 states and Washington, D.C. and 2,159 counties for 2026, down from 44 states and 2,259 counties in 2025.
Humana said it will offer new plan types in four states and 177 counties, and 83% of stand-alone prescription drug plans for 2026 will carry decreased premiums. For people who qualify for both Medicare and the Medicaid program for low-income Americans, CVS Health will expand offerings to 16 new states.
UnitedHealth’s Hunter said the shutdown of over 100 plans represents about 600,000 members who are largely enrolled in preferred provider organizations or those that give members an option to see providers outside of a plan network.
(Reporting by Amina Niasse in New York and Mariam Sunny in Bengaluru; Editing by Krishna Chandra Eluri, Jan Harvey, Chizu Nomiyama and Bill Berkrot)
