TLDR
- UnitedHealth trims Medicare Advantage, cuts 600k members by 2026
- UHG exits 109 counties, reshapes Medicare plans amid CMS pressure
- UnitedHealth axes PPO plans, pivots to HMO to curb rising costs
- Medicare shake-up: UHG cuts $4B risk, shifts 600k members to HMO
- UnitedHealthcare exits rural markets, bets on sustainable plans
UnitedHealth Group stock edged higher on Tuesday despite announcing a major Medicare Advantage retrenchment. Shares climbed 0.41%, reaching $346.73 by 2:47 PM EDT after dipping earlier in the afternoon. The company confirmed it would exit Medicare Advantage plans in 109 counties starting in 2026.
UnitedHealth Reshapes Medicare Advantage Amid Regulatory Pressure
UnitedHealth plans to stop offering coverage to 180,000 members in specific rural counties across the U.S. The company stated the exit aligns with a broader strategy to handle rising care costs and lower reimbursement rates. Management emphasized the need to create a sustainable model amid persistent regulatory headwinds.
By 2026, UnitedHealth expects Medicare funding to drop by 20% compared to 2023, forcing tough decisions across the portfolio. The company will shut down over 100 plans covering 600,000 members, mostly preferred provider organization (PPO) plans. These closures will likely shift members to health maintenance organization (HMO) plans with more structured care.
UnitedHealthcare’s leadership attributed these changes to rising healthcare usage and upcoming cuts by the Centers for Medicare and Medicaid Services. The insurer suspended its full-year earnings outlook after a surprise miss in the first quarter due to these trends. UnitedHealth also warned of a $4 billion risk to 2026 profits stemming from new CMS payment rules.
Streamlining Plan Offerings While Expanding Reach
UnitedHealthcare will maintain a strong presence in most U.S. states. For 2026, the company aims to offer Medicare Advantage plans to 94% of eligible beneficiaries nationwide. It plans to preserve core features like $0 premiums, primary care copays, and prescription drug benefits.
Plans will also continue to include dental, vision, hearing, and gym memberships at no added cost. Nearly all members will keep $0 copays for Tier 1 prescriptions at retail pharmacies and via Optum delivery. Additionally, 93% of members will experience stable or reduced costs for Tier 2 drugs.
Plan expansion will include broader access to HMO plans, Dual Special Needs Plans (D-SNPs), and Chronic Special Needs Plans (C-SNPs). These specialized offerings will address unique needs, including food, utilities support, and chronic condition management. UnitedHealthcare said it remains committed to supporting seniors with simpler, more affordable care.
A New Strategy for Long-Term Stability
UnitedHealth is balancing business sustainability with consumer value as it responds to systemic cost pressures. It continues to modernize its Medicare Advantage lineup, offering more predictable coverage and strong provider networks. The company reiterated its focus on reliable access, efficient care coordination, and financial protection for members.
UnitedHealthcare remains the largest Medicare Advantage provider, ahead of Humana and CVS Health. It has served Medicare members for over 45 years and holds nearly two decades as the top plan choice. Going forward, the company intends to manage cost risks while preserving plan value across its core markets.
