Humana’s Decision to End Certain Medicare Advantage Plans: What It Means for Seniors

Humana is planning to discontinue certain Medicare Advantage plans, affecting around 600,000 members as they prepare for new health coverage alternatives by 2027. This decision is part of the insurer’s strategy to enhance profitability by leaving underperforming plans without implementing widespread cuts across its operations. Humana’s CFO, Celeste Mellet, expressed the company’s intention to recover a significant volume of members, as they did in a previous plan exit in 2025. Although beneficiaries impacted by plan termination will not lose their Medicare eligibility, they must select new coverage if their existing plan doesn’t renew.

Humana stands as one of the biggest providers of Medicare Advantage plans in the country. Therefore, the decision to cut plans impacting 600,000 members marks one of the most significant changes announced for 2027. These Medicare Advantage plans offer retirees comprehensive coverage, including access to healthcare providers, prescription medication, and additional benefits. Consequently, discontinuation may necessitate beneficiaries switching doctors, reassessing drug coverage, or deciding between Medicare Advantage or traditional Medicare.

Plan Exit Details

During Humana’s earnings call on July 29, executives revealed the targeted exit of specific Medicare Advantage plans anticipated to affect roughly 600,000 members by 2027. The company is focusing on plans located in the “lower tail” of profitability to improve fiscal performance. The founder of Powers Financial Group, Drew Powers, highlighted the profit-driven nature of Medicare Advantage compared to traditional Medicare. Insurance companies profit margins can lead to coverage termination for unprofitable policyholders.

Humana has indicated that some impacted members may have the option to stay with the company by opting for alternative Humana Medicare Advantage plans. The company anticipates a recapture rate comparable to the over 40 percent achieved during the 2025 plan exit. If this rate persists, a significant portion of affected members might transition into other Humana plans, though coverage options will depend on individual locations.

If Your Plan Ends

Termination of a Medicare Advantage plan doesn’t result in lost Medicare coverage. Beneficiaries of plans leaving the Medicare Advantage landscape must choose new coverage for the subsequent year. If they don’t select another Medicare Advantage plan, they’ll revert to traditional Medicare once their current coverage concludes.

Kevin Thompson, CEO of 9i Capital Group, noted that as plans exit the industry, it often results in lower competition, which might lead to rising prices or reduced plan composition. Affected members will receive formal Plan Non-Renewal Notices in October, detailing the cessation of their current coverage and options moving forward.

Critical Medicare Deadlines

Medicare Open Enrollment starts on October 15 and extends to December 7 annually. During this window, beneficiaries can alter Medicare Advantage plans, opt for traditional Medicare, or modify their prescription drug coverage. Changes typically take effect on January 1. Those affected by non-renewed Medicare Advantage plans may qualify for a Special Enrollment Period from December 8 to the end of February for plans ending on January 1.

The Path Forward

Humana members facing plan termination should meticulously examine plan materials when non-renewal notifications arrive. These documents will clarify whether their current plan ends and enumerate available choices. For many retirees, the pivotal decision is selecting another Medicare Advantage plan or reverting to original Medicare with supplementary options like a Medigap policy and a standalone Part D prescription drug plan.

Thompson warns that continuing declines in Medicare reimbursements could result in more plans exiting the marketplace, driven by outlooks for government savings.