After nearly two decades of uninterrupted growth, Medicare Advantage is entering unfamiliar territory in 2026. Enrollment is projected to decline for the first time since the mid-2000s, nearly 3 million beneficiaries face forced disenrollment from exiting plans, and the full implementation of the V28 risk adjustment model is reshaping plan economics from the ground up.
For health actuaries - whether working at MA plans, consulting firms, or regulators - 2026 represents a convergence of financial, regulatory, and competitive pressures that demands careful attention. This article breaks down the key developments and their actuarial implications.
Enrollment: The First Decline in Nearly 20 Years
Medicare Advantage enrollment reached approximately 35.5 million in early 2026, up 3.2% from a year ago. But that modest topline growth obscures a dramatic shift underneath: CMS projects total MA enrollment will fall to roughly 34 million over the course of 2026, which would mark the first year-over-year decline in the program’s modern history.
The numbers behind the contraction tell an important story. According to a KFF analysis of CMS data, the total number of MA plans available nationally fell 9% in 2026 compared to 2025, dropping from roughly 3,700 to about 3,370 individual-enrollment plans. In 35 states, Washington D.C., and Puerto Rico, the average beneficiary has fewer plan options than last year.
Why This Matters for Actuaries
The enrollment decline isn’t driven by reduced consumer demand for MA - beneficiaries still prefer its supplemental benefits and cost structure over traditional Medicare plus Medigap. Rather, it reflects deliberate insurer pullbacks from unprofitable markets. For pricing and valuation actuaries at MA plans, this means the enrollment assumptions baked into multi-year projections need serious reexamination. Plans that assumed continued 3–5% annual growth may need to model flat or declining membership scenarios.
Forced Disenrollments: 2.9 Million Beneficiaries Disrupted
A peer-reviewed study published in JAMA on February 18, 2026 - led by researchers at Johns Hopkins Bloomberg School of Public Health - found that approximately 10% of MA enrollees in non-employer HMO and PPO plans face forced disenrollment this year due to plan exits. That’s roughly 2.9 million people.
To put that in context, forced disenrollment rates averaged just over 1% annually between 2018 and 2024. The rate jumped to 6.9% in 2025 and has now reached 10% - a tenfold increase in two years.
The disenrollments are concentrated among certain plan types: PPO plans, non-special-needs plans, plans offered by smaller carriers, and plans rated below four stars. For beneficiaries in rural areas, the disruption is particularly acute, since some counties may have very few - or no - alternative MA options.
Actuarial Implications
Forced disenrollments create a selection risk challenge. Beneficiaries forced out of terminated plans tend to have different risk profiles than voluntary switchers. Plans absorbing these members need to account for potential adverse selection in their 2027 bid development.
Additionally, the concentration of exits among lower-rated plans suggests that star ratings are becoming an increasingly decisive factor in plan viability - not just a quality metric, but a financial survival threshold.
V28 Risk Adjustment: Full Implementation Arrives
Perhaps the most consequential technical change for health actuaries in 2026 is the full transition to the CMS-HCC Version 28 risk adjustment model. After a three-year phase-in (33% V28 in 2024, 67% in 2025), payment year 2026 marks 100% V28 for non-PACE MA plans.
The key changes under V28 compared to the prior V24 model include:
- Expanded HCC categories from 86 to 115, organized into 26 condition families
- Fewer ICD-10-CM to HCC mappings, reduced from 9,797 codes to 7,770 - reflecting CMS’s push for more specific and accurate coding
- Constrained coefficients where related HCCs receive identical payment weights
- Updated calibration data using 2018 diagnoses and 2019 expenditures
The financial impact is significant. Industry estimates suggest V28 will decrease average risk adjustment factor (RAF) scores by 3–8% for most plans relative to what V24 would have produced. For a mid-sized MA plan with 200,000 members, even a 3% RAF reduction can translate to tens of millions of dollars in reduced revenue.
The full V28 implementation eliminates the blended-model cushion that softened the transition in 2024–2025. Plans that haven’t fully adjusted their coding operations, provider education programs, and financial projections to reflect V28-only scoring are now operating at genuine financial risk.
Reserving actuaries should also consider whether IBNR patterns shift as coding practices adapt to the new model.
The 2027 Advance Notice: Chart Reviews Under Fire
Looking ahead, CMS released the 2027 Advance Notice in late January 2026, and it contains a proposal that could further reshape MA plan economics: excluding diagnoses from unlinked chart reviews from risk score calculation.
Chart reviews - retrospective audits of member medical records to identify additional diagnosis codes - have been a standard practice in MA for years. However, MedPAC estimates that chart reviews drove approximately $24 billion in MA overpayments in 2023 alone. A KFF analysis found that one in six MA enrollees underwent a chart review that increased CMS reimbursement to their plan in 2022.
If finalized for 2027, this change would effectively eliminate the financial incentive for plans to conduct chart reviews solely to boost risk scores. CMS actuaries estimate the proposal would save Medicare more than $7 billion in 2027.
Strategic Actuarial Considerations
Plans heavily reliant on chart review revenue need to begin modeling the financial impact immediately. For consulting actuaries advising MA clients, this is a critical conversation to have during 2027 bid development.
The proposal also interacts with V28 in compounding ways - plans already seeing lower RAF scores under V28 would face a second revenue headwind if chart review exclusions take effect.
Benefit Reductions and Premium Dynamics
From tracking MA benefit filings over the past several cycles, a clear pattern has emerged in 2026: insurers are prioritizing margin recovery over membership growth. This represents a meaningful philosophical shift for an industry that spent the past decade competing aggressively on supplemental benefits to attract enrollees.
KFF’s analysis of 2026 plan offerings reveals measurable pullbacks in supplemental benefits. The share of plans offering over-the-counter item allowances dropped from 73% in 2025 to 66% in 2026. Meal benefits declined from 65% to 57%. Transportation benefits fell from 30% to 24%. Remote access technologies dropped from 53% to 48%. Similar reductions appeared in Special Needs Plans.
On the premium side, CMS projects the average monthly premium across MA plans will decrease slightly from $16.40 to $14.00 in 2026. However, this average masks divergence: many large-carrier plans have increased premiums, deductibles, and out-of-pocket maximums. Analysts at Evercore ISI noted that insurers took particular action on HMO plans, which saw more substantial benefit reductions than PPO products.
The benefit reduction trend creates a natural experiment in price elasticity within MA. Plans that cut benefits aggressively risk losing members to competitors that maintained richer offerings - but if the entire market leans out simultaneously, the competitive dynamics change.
Monitoring actual 2026 enrollment against bid projections will provide valuable data for calibrating future benefit-value models.
Star Ratings: Stabilization After Years of Decline
One piece of relatively positive news for the industry: average MA star ratings for 2026 are essentially flat after several consecutive years of decline. However, the aggregate stability masks significant variation among major carriers.
Among the five largest publicly traded MA payers, the share of members in plans rated four stars or above - the critical threshold for quality bonus payments - stayed roughly stable for UnitedHealthcare, declined for Humana and Aetna, and improved for Elevance and Centene.
Why Four Stars Matters So Much
Plans rated four stars or above receive quality bonus payments from CMS that can represent 5% or more of their benchmark payment. Losing that threshold can force immediate and significant benefit reductions, creating a self-reinforcing downward cycle: lower stars lead to benefit cuts, which lead to member dissatisfaction, which lead to lower stars.
For actuaries building multi-year financial projections, star rating trajectory should be modeled as a stochastic variable, not a static assumption.
Special Needs Plans: The Growth Story Within the Contraction
While the broader MA market contracts, Special Needs Plans (SNPs) represent a significant counter-trend. SNP availability increased 33% in 2026, with 1,797 SNPs now offered nationally. The fastest growth is in Chronic Condition SNPs (C-SNPs), which serve beneficiaries with specific chronic illnesses.
From a market strategy perspective, the SNP growth reflects plans’ efforts to identify population segments where they can deliver differentiated care coordination and capture appropriate risk-adjusted revenue. For actuaries, SNPs present both opportunities and challenges: the populations are clinically complex and require sophisticated risk stratification, but the potential for meaningful care management savings is higher than in general MA populations.
Anti-Obesity Medications: The Emerging Cost Wild Card
Milliman’s 2026 MA outlook identifies anti-obesity medications (AOMs) as a central cost concern for MA plans. While coverage of GLP-1 drugs like semaglutide is not mandated in the 2026 final rule, MA plans face increasing pressure to address coverage decisions, prior authorization protocols, and utilization management.
The situation is further complicated by the Medicare drug price negotiation program and separately negotiated administration deals around AOMs. For health actuaries, AOMs represent a classic emerging risk: potentially high near-term costs with uncertain long-term offset through reduced obesity-related comorbidities. Modeling this requires careful assumptions about uptake rates, adherence patterns, and downstream medical cost impacts - all of which have limited historical data.
What Health Actuaries Should Be Doing Now
The convergence of these trends creates a to-do list for actuaries working in or adjacent to Medicare Advantage:
For plan actuaries: Revisit enrollment projections for 2026–2028 under scenarios that include continued market contraction. Update RAF score assumptions to reflect full V28 implementation, and begin modeling the potential impact of chart review exclusions for 2027. Review benefit designs against competitor intelligence to assess competitive positioning.
For consulting actuaries: Proactively advise MA clients on 2027 bid strategy in light of both V28 and the proposed chart review changes. Help plans quantify the revenue impact of SNP expansion opportunities versus general MA membership contraction.
For regulatory actuaries: Monitor state-level adoption of CMS guidance on MA plan exits and forced disenrollment protections. Track whether the 2027 advance notice proposals survive the comment period and how CMS responds to industry feedback.
For reserving actuaries: Assess whether V28’s coding changes and benefit reductions are affecting claim development patterns, IBNR adequacy, or completion factors. The simultaneous occurrence of multiple structural changes increases the risk that historical patterns may be less predictive than usual.