Medicare Advantage Plan Cancellations Surge for 2025

As we approach the 2025 Annual Election Period (AEP), millions of Medicare Advantage (MA) members across the United States are facing significant disruptions in their healthcare coverage. According to recent reports from Deft Research and industry expert Jared Strock, a staggering number of Medicare Advantage plans are being terminated, forcing seniors to explore new coverage options.

Sharp Rise in Plan Terminations

For the 2025 plan year, over 2 million individual Medicare Advantage members will see their coverage terminated. This figure represents a five-fold increase compared to last year’s cancellations, signaling an unprecedented shake-up in the Medicare landscape. Every state will be affected, but certain areas are experiencing higher impacts:

• Washington: 23% of MA members, or over 115,000 seniors, will need to switch plans.
• Georgia: 31% of MA members, affecting around 168,000 seniors, will lose their current coverage.
• New York: 27% of MA members, representing over 278,000 seniors, will have to find new plans.

The breadth of these terminations marks a dramatic shift, creating uncertainty for many seniors who may need to navigate the complexities of selecting new health plans.

Types of Plans Affected

A large portion of the plan terminations is concentrated in the Local PPO (Preferred Provider Organization) market. According to Strock, approximately 1.2 million members, or 13% of the Local PPO market, will see their plans discontinued. This is the largest share of any MA plan type affected during this AEP.

Other plan types are also seeing terminations, though not to the same extent:

• HMO (Health Maintenance Organization) plans are experiencing fewer disruptions, with only about 3% of the HMO market being affected.
• While PFFS (Private Fee-for-Service) and Regional PPO markets are smaller in comparison, the impact is more pronounced. Around 24% of the PFFS market and 27% of the Regional PPO market will see terminations.

This uneven distribution of terminations means that seniors in certain types of plans—especially Local PPOs—will face a more significant challenge in finding comparable coverage.

Why Are Plans Being Terminated?

Several factors may explain the rise in MA plan cancellations. These include:

• Plan mergers and acquisitions: As insurance providers consolidate, some are discontinuing duplicative or less profitable plan options.
• Regulatory changes: Adjustments to Medicare payment models and requirements for plan offerings may lead insurers to re-evaluate which plans they maintain.
• Network adequacy: Plans may be terminated if they can no longer meet Medicare’s strict standards for network coverage, particularly in rural or underserved areas.

What This Means for Seniors

Seniors impacted by these cancellations will need to take action during the 2025 AEP, which runs from October 15 to December 7. It is critical for those affected to:

1. Review their options: Members should carefully review any notices they receive about plan changes and explore alternative plans that meet their healthcare and financial needs.
2. Consider plan types: If switching from a Local PPO, seniors may need to decide whether another PPO, an HMO, or a different type of MA plan offers the best balance of benefits and provider access.
3. Compare networks and costs: Some seniors may face changes in their provider networks or out-of-pocket costs, so it is essential to compare these elements before making a decision.

Navigating these changes can be complex, and seniors should consider seeking guidance from a Medicare specialist or using online resources to ensure they make an informed decision. With the rapid growth of MA plan terminations, understanding the market landscape will be key to securing the right coverage for the upcoming year.

Have questions? Feel free to contact us!