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DEEP DIVE 📚

If you work in the Medicare Advantage space you already know that Plan Terminations and Service Area reductions have had a significant impact over the past 2 years.

In fact, Plan Terminations prior to 2025 typically only impacted 1-2% of enrollees each year.

In 2025, that number jumped to ~7%, when ~1.9 million individuals lost their plan.

2026 was even higher, when ~10% (~2.9 million individuals) lost their plan.

As we head into AEP 2027 I wanted to further analyze the prior 2 years of plan terminations to see if any patterns emerged that would help us understand the “makeup” of a plan termination.

Were there particular types of plans, or Carriers, or geos that were more impacted by plan terminations than others?

Not every corner of the market moved the same amount, and the pattern isn't random.

D-SNP enrollees were barely touched. Impacted share held flat around 1.9% both years.

The real movement was in the largest segment of the market: individual non-SNP MA plans, where impacted share went from 8.3% to 12.1%.

C-SNP impacted enrollment more than doubled, off a small base.

Why: This comes down to MLR cushion. SNP populations, D-SNP and C-SNP especially, carry higher risk scores given the acuity of the population, which means higher risk-adjusted revenue per member. That larger revenue base gives SNP plans more room to absorb rising medical costs. Non-SNP members are, on average, healthier with lower risk scores and lower per-member revenue, so the same cost increase erodes their MLR faster. When utilization trend accelerated across 2024 to 2026, SNP plans had the cushion to absorb it. Non-SNP plans largely didn't, and that's where terminations concentrated.

PPO (Local and Regional combined) carried the highest disruption rate of any plan type with meaningful volume, both years: 12.9% in 2025, rising to 14.6% in 2026, and by far the largest raw number of affected members.

HMO nearly doubled, from 3.4% to 6.6%.

PFFS shows a higher headline percentage in 2025 (24.1%, falling to 5.1% in 2026), but that's a small-sample artifact: PFFS has only about 28,000 individual-market enrollees nationally, so a handful of plan decisions swing the percentage dramatically.

Why: Same driver, from the cost-management side. PPO networks are more open and less tightly managed than HMOs: fewer utilization management levers, less ability to steer members to lower-cost providers, less negotiating leverage on unit cost. That weaker claims-cost control shows up directly in the MLR. When trend accelerates, a PPO's loss ratio moves faster than an HMO's, simply because the carrier has fewer tools to manage the claims side.

Three things stand out.

1) HCSC/Cigna posted the highest impacted share of any group in 2026: 18.8%, nearly one in five of its own enrollees. This is almost certainly a post-acquisition story. HCSC acquired Cigna's Medicare business in March 2025 (the deal behind the HealthSpring rebrand), and its Dec 2025 base of 860,176 already reflects the combined book. A carrier absorbing a large inherited portfolio typically uses the next renewal cycle to prune overlapping or underperforming legacy plans, and 18.8% on a freshly merged book fits that pattern.

2) Elevance's impacted share jumped six-fold, from 1.6% to 9.9%, the sharpest swing among the non-merger carriers.

3) All Others still accounts for the largest single share of total impacted enrollment (1.33M of 2.80M, roughly 48%) and nearly tripled its own rate, from 4.8% to 14.1%.

Who makes up the “All Others” in 2026? A handful of larger orgs exiting the MA market (UCare exited MN), along with a whole host of small/regional plans exiting and reducing their footprint.

Why: Terminations are one of the most direct levers a carrier has to manage its book MLR: exit the plans dragging the loss ratio down, and the remaining book's average improves.

Rather than looking at whole states, we joined the plan-level data to the USDA's Rural-Urban Continuum Codes (RUCC), the same county-level metro/non-metro classification CMS itself has historically used for MA rural payment provisions. This avoids a problem with state-level views: a whole small state can look extreme even when the underlying driver is really about market size, not state lines.

The two largest metro categories, counties in metro areas of 250,000 people or more, stayed comparatively insulated both years, running 6% to 8%. The moment you drop below that, into smaller metro counties (under 250,000 population) or any nonmetro category, impacted share jumps into the 9% to 19% range and stays elevated fairly consistently across every smaller tier. Small metro markets look almost as exposed as fully rural ones.

Why: Same MLR mechanism, at the geography level. Large metro markets have big, diversified risk pools, deep provider networks, and real competition among providers, all of which give a carrier more leverage to manage unit cost and absorb a bad utilization year without its MLR blowing through target.

If the underlying pressure is what we think it is, carriers using terminations as an MLR management tool, concentrated in the plans and markets with the weakest loss-ratio cushion, then it's reasonable to expect 2027 to follow a similar pattern. The highest plan terminations will land on the following profile:

→ Non-SNP

→ PPO

→ Non Metro & Metro <250k

In addition, look for some small and regional plans to exit the market completely.

We’ve already been compiling predictions for Plan Terminations and Service area reductions during AEP 2027 in our annual Tea Leaves post.

It will be another year of higher than normal plan terminations. Now is the time to get ready!

If you’re ready, here are some ways we can help you: