CMS sees Medicare Advantage enrollment falling in 2026

Medicare Advantage enrollment is poised to fall for the first time in nearly two decades, according to the Centers for Medicare and Medicaid Services.

The agency estimates that enrollment in the program will be 34 million in 2025 – marking less than half of all seniors — down from nearly 35 million this year, according to projections from health insurers.

Despite the projected pullback, the agency announced late Friday it “anticipates that enrollment in [Medicare Advantage] in 2026 will be more robust than the plans’ projections,” and that the market will remain stable. Seniors will see they have an average of 10 plans to choose from in most markets when they get their first look at 2026 plans on Wednesday.

After chasing growth in the Medicare market for more than a decade, health insurers have faced shrinking profits in their Medicare Advantage programs over the last two years, as members tally higher-than-expected medical costs and new regulations pressure government reimbursement rates. The larger insurers are now cutting back on unprofitable plans and exiting some markets altogether.

“We’re seeing most health insurance carriers — most Medicare Advantage carriers — be much more focused on profitability relative to growth this year,” said Cobi Blumenfeld-Gantz, founder and CEO of Chapter, a brokerage which helps Medicare members enroll in coverage. “Some of the plan benefits will not be as robust as they have been in the past.”

CMS projects that the average monthly premium across Medicare Advantage plans will decrease from $16.40 this year to $14 in 2026. However, when the preliminary open enrollment period kicks off on Wednesday, seniors may find higher pricing across many of the large insurer plans.

Analysts at Evercore ISI say initial data on 2026 offerings point to higher prices for plans from UnitedHealth Group‘s UnitedHealthcare, CVS Health‘s Aetna, Elevance, Humana and others.

“Our preliminary analysis shows that payors took action to improve margins through benefit reductions including higher premiums, deductibles and out-of-pocket maximum,” said Evercore ISI’s Elizabeth Anderson in a research note. “In particular, we saw (insurers) take more action on HMO plans which overall saw a more sizable cut to benefits.”

Analysts say insurers are prioritizing HMO, or health maintenance organization, plans for 2026, which tend to have more limited provider networks. Though companies are raising deductibles on those plans, seniors will still see offerings with $0 premiums, according to analysts.

“That is one area that carriers are very reticent to touch. So, they’re more likely to cut benefits long before they would add a premium to a $0 product. But the products that already have premiums today … are likely to see increases,” said Brooks Conway, a principal at consulting firm Oliver Wyman.

Seniors tend to work with insurance brokers and agents to help sort through their options during open enrollment. So, one of the ways insurers try to boost enrollment in more profitable plans is by prioritizing commission rates. They’ll pay higher rates on some plans and none at all for others.

This year, the carriers are increasingly eliminating broker commissions on a wide swath of less profitable plans.

“It’s not something that’s out of the norm for that to happen, but the amount of the plans cutting and being de-commissioned, that’s what’s not normal,” said Michael Antoine, an independent health insurance agent with Partner Insurance Solutions.

For 2026 open enrollment, 15% to 20% of plans have been decommissioned across most of the country, according to data compiled for CNBC by Chapter. In some markets like New York, insurers have cut commissions on more than 25% of plans, while in parts of Georgia it’s more than 35% of plans.   

“This year in particular, it’s so important that people ask their Medicare advisor if there are plans that are available that the Medicare advisor may not be looking at because of these non-commission challenges,” said Chapter’s Blumenfeld-Gantz.

Even when they’re willing to forego commissions, brokers may not be able to get access to some of those plans on their brokerage systems.

“I had an experience, and I’m not going to say the carrier, where I couldn’t even enroll the person into the plan,” Antoine said. “It was being completely suppressed. They didn’t want membership into that plan.”

Insurers are betting that with more restrictive offerings and enrollment, they can get a better handle on membership and costs for 2026. But with so much disruption in the market, uncertainty remains high.

“Enrollment is particularly difficult for plans to project in years like this one, where so many carriers are reducing benefits and adjusting their portfolios,” said Conway. “A plan might expect to reduce [Medicare Advantage] enrollment because they leaned out (of) benefits, only to find out that a major carrier exited their market, and the remaining carriers also leaned out their benefits.”

Medicare enrollees should get notices from their insurers about changes to their current health plans this week, when the shopping period for 2026 open enrollment begins on Wednesday. With so many changes in the market, brokers say seniors need to shop around this year and weigh their options.

“The is not the year to go on autopilot,” said Whitney Stidom, vice president at online brokerage eHealth. “Doing comparison shopping can save over $1,800 in out-of-pocket costs just by simply comparing plans and potentially finding something that will save them more.”

A looming government shutdown, which could start Oct. 1, could add a bit more uncertainty to this year’s enrollment, with Congress at an impasse on a funding agreement.

A former CMS official told CNBC a short shutdown should not impact open enrollment, because funding for contractors who oversee the process has already been allocated and will continue.

On Saturday, CMS announced that critical services for Medicare and Medicaid would not be affected by a shutdown, though the agency would not have funding to provide oversight to contractors, including those who administer the Medicare call centers.

The Medicare open enrollment period runs from Oct. 15 through Dec. 7.