By Amina Niasse
NEW YORK (Reuters) -UnitedHealth said it will stop offering Medicare Advantage plans in 16 U.S. counties in 2026, impacting 180,000 members, as the company balances higher costs with reimbursement pressure in the insurance program.
"The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs and increased utilization have created headwinds that no organization can ignore," said Bobby Hunter, who runs the company's government programs.
UnitedHealth
is leaving the counties but will continue to operate in most states, he said in a Tuesday press briefing.
The government pays private insurers to operate the Medicare Advantage plans for people 65 and older or with disabilities. The company's UnitedHealthcare insurance business has the most enrolled members, ahead of rivals CVS Health and Humana.
UnitedHealth suspended its full-year guidance this year, after missing earnings for the first time since 2008. The company attributed the first-quarter earnings miss to unexpected costs in its Medicare Advantage business as members increased use of medical services.
UnitedHealth in a second-quarter earnings call said regulatory changes set to decrease payments the company receives for certain conditions would present a $4 billion risk to insurance profits in 2026.
It flagged in its second-quarter earnings release that closing certain plans with about 200,000 members could help mitigate the impact.
When compared with 2023, Hunter said government funding will have dropped in 2026 by about 20%.
The company will cease operating over 100 plans representing about 600,000 members in all, largely comprised of preferred provider organizations or those that allow members to see providers outside of a plan network, Hunter said.
The exits will likely steer patients toward health maintenance organizations, or plans which require more frequent referrals and limit patients to a network of providers, Hunter said.
Most plan closures will occur in rural areas said Hunter, where UnitedHealthcare is still working to streamline operations: "We need a model that is sustainable and allows us to bring care to folks in those areas in a cost-effective way."
(Reporting by Amina Niasse; Editing by Caroline Humer and Jane Merriman)
