The glory days of huge growth and fat insurer profits in Medicare Advantage are probably over.

Why it matters: Billions of dollars are at stake but so is coverage for millions of seniors, and the prospect of a less robust MA program puts added focus on the limitations of traditional Medicare.

Driving the news: The insurance industry is furiously pushing back against the Trump administration's proposal to essentially keep MA payments flat in 2027, which insurers argue is far below what's needed to match their costs.

• If the rate is finalized, the plans say they'll be forced to reduce benefits or increase costs for enrollees.
• But critics of how the program is funded say the lower-than-expected rate is part of a long overdue correction to a system they argue has overpaid insurers.
• The rate notice follows federal crackdowns on coding practices, quality ratings and other drivers of what outside experts deem overpayments, and it could reduce what insurers are paid by the federal government.

State of play: Some large insurers have already pulled back from certain MA markets, and millions of seniors have been forced this year to choose a new health plan (more on that below).

• Industry groups are warning that seniors will pay the price if the proposed payment rate for 2027 is finalized.
• Doing so amounts to "making it more difficult for plans to keep premiums affordable and maintain the supplemental benefits beneficiaries value most," the Better Medicare Alliance said in a statement responding to the proposal.
• "We will continue to work with CMS to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors' benefits and access to care," UnitedHealthcare CEO Tim Noel said on UnitedHealth Group's recent fourth-quarter earnings call.

Between the lines: That sure makes it sounds like the MA program is in trouble. But the experts I spoke with struck a less dire tone.

• What's happening is "a leveling out that happened after pretty sharp increases in enrollment and expansion of benefits that were funded by pretty generous payments from the federal government," said KFF's Jeannie Fuglesten Biniek.
• Insurers have pulled back on some supplemental benefits for 2026, including allowances for over-the-counter items or meal benefits, according to a KFF brief. But "we don't know if that is necessarily a loss for the enrollees," Fuglesten Biniek said.
• "It's really easy to point to and say, 'Oh they're cutting benefits,' but what really matters is whether it's a benefit someone uses and gets value from," she added.

What they're saying: "We continue to believe Medicare Advantage will and must play an important role in the future of Medicare," Trump administration Medicare director Chris Klomp said at an event the day after the rate notice was released.

• The proposal "is just math," he added. "Actuaries are determining underlying medical cost trends. They put that in the effective growth rate and the math flows out."

What we're watching: Until the past few years, MA was the gift that kept giving for insurers, emerging as their most profitable line of business.

• The program is now becoming less profitable. But there's a world in which all that means is beneficiaries eventually choose between 25 MA prescription drug plan options instead of an average of 32 this year — or can no longer enroll in a plan with a transportation benefit.
• But if plans start hacking at hearing, dental and vision benefits, or significantly raising premiums, that would be much more consequential for patients.

Keep reading ...

So let's say MA does crash and burn in a bunch of markets, and insurers either cut benefits or pull out entirely. Why does that matter when traditional Medicare still exists as an option?

• One answer is that MA can be more affordable and offer more financial protection than traditional Medicare, which has big holes in what it covers.

The big picture: More than half of America's seniors are now enrolled in MA, which comes with a lot of perks.

• The plans almost universally include vision, hearing and dental benefits, which aren't included in traditional Medicare. They also usually include prescription drug coverage with no additional premium.
• They also have out-of-pocket limits. Traditional Medicare doesn't, and that's a huge reason why most enrollees also have supplemental coverage that costs them, on average, more than $200 a month.
• "There's no question that the plans offer a better benefit structure," said Arnold Ventures' Mark Miller, who has long argued the federal government overpays the program and that some insurance companies game the system for higher payments.

But MA plans also have much smaller provider networks than the traditional Medicare program.

• Those networks have been further pressured in recent years by high-profile contract disputes between MA plans and hospitals, frequently resulting in health systems dropping out of insurers' networks.
• MA plans also use cost management tools like prior authorization, which aren't very popular with patients.

The bottom line: "If you want to generalize, the market is still robust and stable," Fuglesten Biniek said.

• "People have a lot of options and they still get a lot of extra benefits. But that doesn't mean it doesn't look a little different than it did last year or the year before."
• "Given that the plans have enjoyed overpayments for many years in a row ... this is an anticipated market correction," Miller said.

About 10% of seniors in Medicare Advantage plans will be forced to disenroll this year because the insurer is exiting their market, according to new projections in JAMA Network.

By the numbers: From 2018 to 2024, the mean "forced disenrollment" rate for Medicare Advantage beneficiaries — a measure of coverage disruptions due to plan exits — was just 1%, my colleague Adriel Bettelheim writes.

• That increased to 6.9% in 2025 and 10% for the 2026 plan year, the researchers from Johns Hopkins and Georgetown universities wrote.
• Beneficiaries in preferred provider organization plans, those in plans administered by smaller insurers, and individuals living in rural areas were among the people who faced the most upheaval.

The rising number of insurer exits comes after an MA surge that saw the number of plans available to beneficiaries double over the last seven years, the researchers noted.

• "Millions of Medicare Advantage enrollees will be forced to either find new plans or switch to traditional Medicare in 2026, which may disrupt access to providers and benefits and potentially limit competition in Medicare Advantage," they wrote.