Wait! Don’t Throw That “Junk Mail” Away Until You Read This

Big Medicare Advantage plan changes are coming in 2027.  That nondescript envelope from your insurance company could contain information you cannot afford to ignore.

By Sean Sparkman

If you are a Medicare Advantage enrollee who tends to sort your daily mail over the trash can, you should pay close attention to this article.

If you are like most people who get bombarded with marketing material every day, the tendency is to toss everything in a pile on the kitchen counter until you have the mental bandwidth to deal with it.   However, one of the most critical pieces of mail you need now and in the coming years could be living in that pile grocery store receipts,  credit-card offers, and seminar invitations.

When an envelope arrives from your Medicare Advantage or prescription drug insurance carrier, you’re probably not that eager to open it, are you?  Maybe it goes directly into the trash.  Or you use it as a notepad or coaster.

This year, I am encouraging my clients to not do that.

That piece of marketing mail could tell you that your Medicare Advantage copays are changing, your prescription drug coverage is changing, or some of the extra benefits you use are shrinking. Maybe your doctors are retired or otherwise no longer be in the network, or, in some cases, the Medicare Advantage plan you have today are not available in 2027.

This is not an isolated issue and will impact hundreds of thousands of Medicare Advantage enrollees.  Several of the largest Medicare Advantage insurers are reassessing their businesses, eliminating plans, withdrawing from some markets and reducing benefits as they try to deal with soaring medical costs and challenges to profitability.

At the same time, Medicare itself is undergoing crucial changes in 2027. All this means that 2027 could be a particularly bad year to put your Medicare coverage on autopilot.

Relax, your Medicare Isn’t Being Canceled, but…

Let’s clear up something important before we go any further.

When you hear that an insurance company is “exiting Medicare Advantage,” that usually does not mean you’re losing Medicare.

Medicare Advantage plans are private insurance plans approved by Medicare. An insurance company can decide that a particular plan or geographic market no longer makes financial sense. They often decide to discontinue that offering.  Your underlying Medicare eligibility doesn’t disappear, but your current plan might.

If that happens, you may have some decisions to make.

Unfortunately, many retirees have become accustomed to simply renewing the same coverage year after year without much thought. This strategy becomes considerably more dangerous when it’s the insurers themselves that are changing course.

The Medicare Advantage Shake-Up Is Already Underway

KFF’s analysis of Medicare Advantage offerings found substantial reductions among several major insurers for 2026. UnitedHealthcare exited 225 counties while entering 14. Humana exited 198 and entered five. Elevance exited 181 and entered 45. CVS Health’s Aetna exited 160 counties and entered 17. Centene exited 104 counties while entering 63.

These shifts are far from over.

I’ve put together a snapshot of what some of the industry’s major players have been doing or have announced:

Those numbers don’t all measure the same thing. Some represent discontinued plans, some are county exits, some membership changes and some complete exits from a product line.

But when you put it all together , there’s an obvious story that emerges:Medicare Advantage is being repriced and reshaped.

MarketWatch has reported that the disruption extends well beyond one or two insurers, with Humana, Molina, Clear Spring and Presbyterian among carriers making significant changes for 2027.

Why Are Insurance Companies Pulling Back?

At this point, it’s tempting to blame all this on “Greedy insurance companies.” But, the reality is more complex and nuanced.

Medicare Advantage insurers have faced higher medical utilization and rising healthcare costs. At at the same time that changes in Medicare reimbursement and risk adjustment have altered the economics of the business.

United Healthcare, Humana, CVS/Aetna and other insurers have been explicit with investors that profitability matters when deciding which markets and plans they will continue offering.

Humana, for example, says its 2027 decisions are focused on plans with poorer profitability and returns as it works toward a sustainable pre-tax margin of at least 3% in 2028.

United Healthcare has similarly been eliminating less profitable offerings and says the members remaining after its recent retrenchment have been less expensive to cover, improving margins.

Molina’s decision is even more dramatic. The company concluded that traditional Medicare Advantage-Prescription Drug plans no longer fit its strategic focus and is instead concentrating on the dual-eligible Medicare population.

This is business.

But if you’re the Medicare beneficiary receiving the letter, it’s also personal.

Meanwhile, Medicare Itself Is Changing

The insurance companies aren’t the only ones making changes.

CMS finalized important Medicare Advantage and Part D rules for 2027.

Among other things, CMS is changing the Medicare Star Ratings system by eliminating 11 measures that it says provide little meaningful distinction among plans and refocusing the system more heavily on clinical care, outcomes and patient experience.

CMS is also codifying major changes to the Medicare Part D prescription drug benefit, including elimination of the old coverage-gap phase, a reduced annual out-of-pocket threshold and no enrollee cost sharing in the catastrophic phase.

There are also new rules affecting certain supplemental benefits and the debit cards some Medicare Advantage plans use to administer them. CMS says the changes are designed to improve transparency and help ensure that beneficiaries actually receive the benefits their plans promise.

And despite all the talk about insurer pressure, federal payments to Medicare Advantage plans aren’t simply being “cut” across the board for 2027.

CMS projects its finalized payment policies will result in an average 2.48% increase, or more than $13 billion, in Medicare Advantage payments for 2027 before estimated risk-score trends are considered. Including those trends, CMS estimates the change at 4.98%.

That makes the story more complicated than “Washington cut Medicare, so insurers left.”

Individual insurers are making individual business decisions based on reimbursement, medical costs, utilization, Star Ratings, risk adjustment and the profitability of particular plans and markets.

Which brings us back to that envelope sitting on your kitchen counter.

Meet the Most Important Boring Letter You’ll Receive This Fall

If you’re enrolled in a Medicare Advantage or Medicare prescription drug plan, your plan sends you an Annual Notice of Change, commonly called the ANOC, each fall.

Medicare says the ANOC explains changes in your plan’s coverage, costs and other provisions that take effect in January. Medicare specifically advises beneficiaries to review those changes and decide whether their plan will continue to meet their needs.

This is not advertising. It’s valuable information you will need as you evaluate future Medicare decisions.  Read it and if you have questions, contact a trusted Medicare specialist in your area.

If your plan is leaving Medicare entirely for the coming year, Medicare says you should receive a Plan Non-Renewal Notice in October, 2026.

Unlike many government communications, the instructions in a Plan Non-Renewal Notice are refreshingly straightforward: You must look for a new plan for the next year.  This is a letter worth opening.

Seven things to think about before you shred that mail…

When your Medicare paperwork arrives this fall, the temptation is to only look at the premium. However, I suggest checking for the answers to some essential questions, such as:

1. Is your plan still available?

Does this plan still exist for you in 2027?  If the answer is no, don’t panic. But don’t put off calling your Medicare agent either.

2. What happened to the premium?

A zero-dollar premium last year doesn’t guarantee a zero-dollar premium next year.  Remember that premium alone doesn’t tell you if a plan is inexpensive.  You need to consider the entire package.

3. What’s going on with your copays and maximum out-of-pocket exposure?

A modest premium becomes considerably less attractive if specialist visits, hospital stays, outpatient procedures or other services are now substantially more expensive.  Look beyond what you pay every month and ask yourself what this plan will cost you if you actually become injured or ill.

4. Are your doctors and hospitals still in the network?

The same Medicare Advantage plan you’ve had for years won’t be quite as wonderful if your favorite primary care physician or specialist isn’t in it anymore.  Always check the provider network and get confirmation.  According to industry insiders, provider information found on plan websites may be outdated or otherwise inaccurate.    Don’t assume that because a physician participated last year, he or she will participate next year.

5. Has your prescription drug coverage changed?

This is a big one for many seniors who rely on prescription drugs.  Be sure to review your medications individually. Find out if your medication is still on the formulary.  Discover if that drug’s tier or co-pay changed.  Is prior authorization now required?  Can you still use your preferred pharmacy?  A plan that works beautifully for your neighbor may be expensive for you just because you take different medications.

6. What happened to all those “perks”?

Many Medicare Advantage plans attracted members by offering additional benefits such as dental coverage, vision coverage, hearing aids, allowances for over-the-counter drugs and appliances, fitness benefits, and even grocery benefits.

These supplemental benefits were a major selling point for Medicare Advantage plans. They are also among the first things to go when an insure tries to improve the economics of a plan.

United Healthcare has already indicated that supplemental-benefit reductions are part of its 2027 strategy.  The takeaway here is that you should not assume the extras you enjoyed in 2026 will look identical in 2027.

7. Should you shop again?

Maybe not.  After reading everything, comparing your medications and providers and looking at alternatives, you may discover that your current plan is still exactly where you belong.

That’s great.  But that’s very different from staying in a plan because you never opened the envelope.

Doing nothing at all is still a decision.

The most critical lesson of the 2027 Medicare enrollment season is that doing nothing may be the worst option of all.  If your existing plan remains available and you allow it to renew without examining the changes, you’ve effectively decided that whatever the insurer changed is acceptable to you. Maybe it is and maybe it isn’t.  But shouldn’t you know?

Medicare Advantage remains enormously popular, and millions of beneficiaries are perfectly happy with their coverage. The current upheaval doesn’t mean everyone should abandon Medicare Advantage or that Original Medicare is automatically a better choice.

It means the Medicare marketplace is changing rapidly enough that blind renewal is becoming a poor course of action.  Your health can change. Your prescriptions can change. Your doctors can change. Your insurance company can change its benefits.

Or as is increasingly the case, your insurance company can decide it doesn’t want to offer your particular plan at all.

Sean’s Suggestion: Always open the mail.

We live in an age when most of the stuff arriving in our mailbox really can go straight into the recycling bin. The pizza coupons?  The furniture-store flyer announcing its 47th “Going Out of Business” sale?  It’s probably OK to toss them.

But anything that comes from your Medicare Advantage or prescription drug insurer should be opened.

Read the Annual Notice of Change. Read any nonrenewal notice. Compare your doctors, prescriptions, premiums, copays and benefits with what you’ll have next year. Talk to your Medicare specialist about your options. Doing these things will help you make informed decisions during Medicare’s annual enrollment period, which runs October 15 through December 7.

Discovering that your coverage changed while you’re standing at the pharmacy counter in January is a terrible, and potentially costly, way to start the New Year.