AEP 2026: The year of the Medicare Advantage disruption

The plans, they are a changin’

The Medicare Advantage market has been shaken up all across the country, but particularly so in Michigan, and even more particularly in the southeast and northern areas of the mitten. This annual enrollment period is going to look a bit different than those before it. And, I know this isn't the first time many of us have heard this. With the right amount of preparedness, resources at your disposal, and back-end support by your side, you can better retain - and even grow - your Medicare business.

What happened?

As carriers rolled out their new product menus for 2026, agents might have noticed a thing or two was different this year. Entire plans were wiped out, which isn’t unheard of, but usually not to this extent. Plans with no premiums suddenly were missing a zero. That was bad enough. But it just kept going: deductibles, both drug and medical, started popping up in places they weren’t before. Dental and vision options once loud and proud were nowhere to be seen. OTC card allowances whimpered instead of roared. Some silver sneakers had walked off. And the “max” was definitely put back into the max-out-of-pockets (MOOPs).

Why?

Medical loss ratios, the measurement of carriers' premium dollars in comparison to how much they spent on their beneficiaries' medical care, were not up to snuff last year. Many carriers spent more on care than they collected in premiums. That translates to losses over Q2, which then leads to some swift course correction for 2026.

There is a few reasons for this: first of all, Medicare Advantage (MA) enrollments are at an all-time high. About 52% of eligible beneficiaries are enrolled in a MA plan, meaning many seniors depending on these carriers for health insurance. A large chunk of them have grown accustomed to the zero dollar premium plans offered all over the state. More enrollments, while of course means more dollars from CMS, also means more risk to shell out cash to those with chronic conditions or take a spill. And this year, the scales tipped in the wrong direction.

The cost of care and frequency of care went up, too. Roughly 68% of Medicare beneficiaries have two or more chronic conditions, and over a third have four or more.

Prescription drug advancements, whether it be the so-called miracle GLP-1s like Ozempic, or the ever growing list of biosimilars, cost money. Some carriers have decided not to cover GLP-1s outside of diabetic care, but it appears to be too little too late.

Let’s not forget the changes to Part D coverage with the Inflation Reduction Act. Just a few short years ago, beneficiaries would be expected to pay a whopping $7,050 dollars for their prescription drugs before they hit the catastrophic phase. But starting in 2026, that cap will be $2,100, and the government didn’t just pick up the rest of that tab. And if that bill didn’t go to the government, and it didn’t go to the beneficiary, it was left for the carrier to pick up.

Mix all of these together, and you get risk in the billions (yes, with a b). So carriers have to raise premiums, trim supplemental benefits, and bid farewell to some counties.

How do you know all that?

Experience, the collective desire to understand health care and health insurance, and data.

If you are aligned with Action, you can get your hands on a detailed disruption report of all of your Medicare business, beneficiary by beneficiary, including plan closures, premium and deductible changes, as well as product recommendations and alternatives, should you need additional support.

Every agent is at a different spot right now. Maybe you are still in the “annual” part of AEP—you know it happens, you know this year is going to be a doozy, so you're procrastinating. Maybe you are ramping up for the “enrollment” part: setting meetings, getting ready to pull the trigger right on time. No matter where you find yourself, Action Benefits stands ready to serve you.