MA Crosses 51.6% Penetration: What the Majority Threshold Means for Plan Actuaries

Medicare Advantage enrollment reached 51.6% of eligible beneficiaries in 2026 on 1.1 million net new enrollees, or 55% on KFF's denominator, 35.2 million of 64.2 million.

Whichever figure a plan actuary uses, the arithmetic underneath has changed. More than half of Medicare is now priced through private plans, and the fee-for-service population left behind is not a random half of what it used to be.

Key Takeaways

• $76 billion, or 14%, is MedPAC's estimate of 2026 MA payments above traditional Medicare cost for the same beneficiaries, split into 11 points of favorable selection and 4 points of coding intensity.
• Coding intensity is influenceable. Favorable selection is not. It is a function of who is left to enroll, and CBO's 63%-by-2034 projection leaves under 40 points of the population still to convert.
• 2027 is not the V28 full-weight year. That was 2026. What 2027 adds is a $7.12 billion unlinked-chart-review exclusion plus a recalibration from 2018 diagnoses to 2023, compounding rather than repeating.
• 889 counties, 28% of all US counties, have two carriers holding at least 75% of MA enrollment. Above that level, growth means taking a switcher rather than converting a fee-for-service beneficiary.
• 23% of plan leaders expect MA enrollment to decline in plan year 2027, against 9% a year earlier, and 69% expect their own membership to hold flat or contract.

Two Measures, One Milestone

The gap between 51.6% and 55% is two denominators applied to a similar enrollment count, not a rounding error, and it moves the answer by enough to flip a county from apparent below-average penetration to above-average depending on which baseline a competitive analysis uses.

The composition underneath moved further than the headline. SNPs absorbed 85% of the entire net enrollment gain, expanding to 8.2 million enrollees, while non-SNP individual plans, the segment most actuaries think of as the core MA product, grew by only 0.2 million and group MA enrollment fell for the first time since 2010. We worked through the denominator mechanics and the SNP mix in an earlier analysis.

MedPAC's March 2026 status report puts a number on the mechanism that made two decades of growth profitable. MA payments in 2026 will run $76 billion, or 14%, above what the same beneficiaries would have cost in traditional Medicare, split into an 11-point favorable-selection component and a 4-point coding-intensity component.

That split is the one to carry into bid modeling. Coding intensity is a documentation and workflow variable a plan influences directly through audits and provider engagement. Favorable selection is not.

The Subsidy Compresses as Its Source Population Disappears

The first beneficiaries to choose MA in the 2000s and 2010s were disproportionately younger-old, mobile and healthier than the fee-for-service population they left, because those are the beneficiaries most willing to trade provider choice for lower cost sharing and richer supplemental benefits. Every cycle since has drawn from a progressively less self-selected pool.

CBO projects national penetration climbing to 63% by 2034 and holding through 2036, leaving under 40 points of the Medicare population still to convert. That remainder splits between beneficiaries who actively want an open network, rural beneficiaries in counties with thin plan availability, and higher-acuity beneficiaries for whom Traditional Medicare is a clinical necessity rather than a preference. As that convertible pool shrinks, the 11-point favorable-selection component compresses mechanically, with no regulatory action required.

It is common shorthand to describe 2027 as the year the V28 risk model reaches full weight. That was 2026. CMS completed the three-year phase-in with payment year 2026, moving from a 67%/33% V24/V28 blend in 2024 to 33%/67% in 2025 to 100% in 2026, a transition CMS projected would compress average risk scores by 3.12%, worth roughly $11 billion. That compression has already flowed through the current bid year, as our full-weight analysis covered.

What 2027 adds is a second compression on an already fully weighted model. CMS finalized a rule excluding diagnoses from unlinked chart review records, codes not tied to a specific clinical encounter, from risk score calculation starting in calendar year 2027, estimated at $7.12 billion. Separately, the CY 2027 recalibration shifts the underlying data from 2018 diagnoses and 2019 expenditures to 2023 diagnoses and 2024 expenditures, a five-year jump into a different coding and utilization environment. CMS finalized a 5.33% effective growth rate for 2027, or a 2.48% average net payment increase, roughly $13 billion once the components net out.

The vintage effect is what makes this hard to read off a triangle. A book's blended risk score mixes long-tenured members who joined during the favorable-selection era with recent entrants who look more like the population left behind. As the recent-entrant share grows and the long-tenured share ages into higher morbidity, both forces push the blended score up at once. An actuary reading that increase as trend overstates secular medical cost growth and understates a compositional shift that stops once the mix stabilizes.

County Concentration Reached the Threshold First

A national figure of 51.6% or 55% sits on top of wide dispersion, and some markets crossed the majority threshold years ago.

Market	Approximate MA Penetration	Source
National (Arnold Ventures denominator)	51.6%	Arnold Ventures, July 2026
National (KFF denominator)	55%	KFF, July 2026
Monroe County, NY	82%	Becker's Payer Issues, 2026
Miami-Dade County, FL	75%+	Becker's Payer Issues, 2026
Palm Beach County, FL	75%	Becker's Payer Issues, 2026

Carrier concentration compounds the geography. UnitedHealth Group holds 26% of national MA enrollment, or 9.3 million members, down 647,000 from 2025, while Humana holds 20%, or 7.0 million, up 1.3 million. Together they hold 46% of national enrollment, unchanged from 2025. But in 889 counties, 28% of all US counties, those two carriers alone control at least 75% of MA enrollment.

Growth mechanics in those counties differ in kind rather than degree. Below roughly 40% penetration, a plan grows largely by converting beneficiaries who have never had an MA option evaluated against their specific provider relationships, so a modest premium or benefit advantage wins volume. Above 75%, with two carriers already holding most of the book, incremental growth means taking share from the other incumbent, which competes on network breadth and provider-contract terms rather than headline benefit value.

That changes what the marginal member costs to price. In a low-penetration county the marginal enrollee costs roughly what the average enrollee costs. In a duopoly county the marginal enrollee is disproportionately a switcher whose claims history and provider attachments the receiving plan does not hold, which is exactly the member for whom recent completion factors and IBNR development patterns carry the least predictive value.

Plan leaders are pricing that in already. In a January 2026 survey of leaders at more than 35 health plans, HealthScape Advisors found 23% expected overall MA enrollment to decline in plan year 2027, up from 9% a year earlier, while 69% expected their own membership to hold flat or contract. Ninety-three percent said the MA line was not currently profitable and 79% did not expect profitability for at least two more years.

Roughly 2.9 million enrollees were forced to switch plans for 2026 after their plan exited their county, a tenfold increase from the sub-2% annual rate that held from 2018 through 2024. Who stays and who leaves under that pressure is the sorting mechanism that decides whether the remaining MA pool gets healthier or sicker against the benchmark it is measured on.