UnitedHealth exits Medicare plans covering 390,000 members

UnitedHealth Group is scaling back parts of its Medicare Advantage business for 2027 to protect its profitability against elevated medical costs and utilization. Bloomberg reported that the insurer will discontinue plans covering roughly 390,000 members next year, marking a shift toward plan-level returns rather than total enrollment.

According to Reuters, UnitedHealth plans to exit locations with a higher concentration of preferred provider organization (PPO) offerings, which carry higher costs due to broader out-of-network coverage. The insurer stated that 66% of its members will have access to both HMO and PPO plans in 2027, down from 70% in 2026. Alongside the portfolio changes, the company plans to invest nearly $1.5 billion in artificial intelligence initiatives in 2026 to curb administrative costs and boost productivity.

Other major healthcare insurers are pursuing similar cutbacks. Humana is trimming plans covering about 600,000 members for 2027 to emphasize value-based care. Centene is reducing its Wellcare lineup, completely exiting Hawaii, Oklahoma, and Tennessee while keeping Special Needs Plans in Nevada and Ohio.

UnitedHealth shares have gained 32.2% over the past six months, slightly ahead of the industry average gain of 32.1%. The stock trades at a forward price-to-earnings ratio of 16.98 compared with an industry average of 14.93, while consensus earnings estimates for 2026 stand at $19.85 per share, representing 21.4% year-over-year growth.