Humana’s Medicare Advantage Plan Changes and Implications for 2027

Humana plans to discontinue certain Medicare Advantage plans, affecting around 600,000 members as it focuses on improving profitability by moving away from lower-performing plans instead of reducing its entire Medicare Advantage operations. This decision will compel numerous seniors to reevaluate their healthcare options ahead of 2027.

CFO Celeste Mellet stated during Humana’s second-quarter earnings call on July 29, “We will work to recapture a significant portion of that volume as we did in 2025.” Though those affected will retain their Medicare eligibility, they must select a new plan if their current one is discontinued.

Newsweek reached out to Humana for comment on this matter.

Why Changes to Medicare Advantage Plans Matter

As one of the largest Medicare Advantage providers nationwide, Humana’s cuts affecting 600,000 members mark the largest plan adjustments announced for 2027 so far. Medicare Advantage plans are crucial for retirees as they offer a combination of medical services, prescription drug coverage, and extra benefits. When plans are terminated, beneficiaries may need to switch doctors, review drug coverage, or decide between Medicare Advantage and original Medicare.

Details from Humana’s Earnings Call

During the earnings call, Humana revealed plans to exit Medicare Advantage plans for approximately 600,000 members by 2027. Company executives acknowledged targeting plans at the lower end of profitability to enhance financial performance.

Drew Powers, founder of Powers Financial Group, stated, “Medicare Advantage is run by for-profit insurance companies, and therefore require a certain profit margin in order to operate. What this means for the individual policyholder is you can be dropped from your plan if you are not profitable for the insurance company.”

Humana noted that some members might stay with the company by opting for different Humana Medicare Advantage plans. The company anticipates a recapture rate akin to the more than 40 percent rate following previous plan exits in 2025, estimating a substantial portion of affected members could transition to other Humana plans, with coverage options varying by location.

Action if Your Plan Discontinues

A discontinued Medicare Advantage plan doesn’t mean losing Medicare coverage. Instead, beneficiaries must choose new coverage for the following year if their plans exit the Medicare Advantage program.

“As plans leave the marketplace, you will see consolidation within the industry, which will lead to lower supply,” according to Kevin Thompson, CEO of 9i Capital Group. “What happens when competition declines? Prices inevitably rise, or the composition of the plans gets reduced.”

Members are expected to receive formal Plan Non-Renewal Notices, indicating their coverage won’t continue into the next plan year. These notices typically arrive in October and detail when current coverage ends.

Key Medicare Deadlines for Affected Members

The Medicare Open Enrollment period, running from October 15 through December 7 yearly, is the first major period during which beneficiaries can switch Medicare Advantage plans, revert to original Medicare, or adjust prescription drug coverage. Changes take effect on January 1.

Affected members may also be eligible for a Special Enrollment Period if their Medicare Advantage plan isn’t renewed, spanning from December 8 until the last day of February for plans ending January 1.

Next Steps for Humana Members

When non-renewal notices arrive, affected Humana members should scrutinize plan materials to verify if their plan is terminating and learn about available options. The essential choice for many retirees involves deciding between another Medicare Advantage plan or reverting to original Medicare, potentially supplemented by a Medigap policy and a standalone Part D plan.

Kevin Thompson mentioned, “Medicare reimbursements continue to decline, and as long as potential government cost savings lead the rhetoric, you may continue to see plans leave the marketplace.”

For inquiries, contact Newsweek editors Jason Lemon and Gray R. Thomas on this topic.