US health insurance and Medicare Advantage market shifts

The US health insurance landscape is facing significant shifts heading into 2027. In Minnesota, marketplace premiums are projected to rise between 9.9% and over 21%, though state reinsurance programs have mitigated even higher potential increases. Local Medicare Advantage providers, including HealthPartners and Blue Cross and Blue Shield, are restructuring plans or discontinuing coverage in certain counties due to rising medical and drug costs.

On a broader national scale, Medicare Advantage premiums are projected to fall by 16.5% in 2027, with the weighted average monthly premium dropping to $12.00. This occurs despite a finalized 2.48% average increase in Medicare Advantage payments from the Centers for Medicare & Medicaid Services.

Major insurers are responding to rising medical costs by narrowing provider networks, reducing plan availability, or scaling back geographic footprints. Specifically, UnitedHealthcare and Humana, the two largest Medicare Advantage insurers, are discontinuing plans that cover approximately 990,000 Americans in 2027. UnitedHealthcare confirmed that roughly 390,000 members will be affected, focusing reductions on Preferred Provider Organization (PPO) plans while prioritizing Health Maintenance Organization (HMO) and Special Needs Plans (SNPs). Humana is discontinuing plans for about 600,000 members, representing roughly 8% of its Medicare Advantage enrollment, targeting “lower-performing plans” rather than widespread reductions.

In addition to plan closures, insurers are scaling back benefits. Reports indicate that UnitedHealthcare’s dental benefit reductions have affected nearly 70% of its members. Similar regional challenges are noted in Hawaii, where HMSA is discontinuing specific PPO plans due to financial pressures and industry-wide cost increases.