The great contraction Medicare Advantage seems to continue to continue

Shakespeare wrote in The Tempst, “what happened is prologue”, to express how the events of the past have prepared the field for developments in the present.

This feeling was clear for health insurers in the second quarter, in which companies that reduced Medicare benefits and reduced non -profitable members last year took advantage of the apparent immunity of the tidal wave of medical expenses buried their peers.

Humana and CVS were the only insurers to increase their expectations of annual profits after the second quarter, Bucking a wider slowdown. Four other large payers – Unitedhealth, Elevance, Centene and Molina – have lowered their expectations or established new floors well below the previous objectives.

(The other main insurer listed on the stock market, Cigna, has reaffirmed its previous perspectives. Cigna does not participate in my.)

The state of play is a strong case from 2024. Last year, Humana and CVS were the hardest affected by the use and regulatory changes in the Privatized Medicare program, as Biden administration policies which have shrunk reimbursement coincided with the increase in medical expenses. Their insurance benefits have dropped accordingly.

The two insurers found themselves in the hope of improving the margins in 2025, the reduction of their plans and seeing it to the counties where they could not make a profit.

This strategy is bearing fruit, CVS and humana leaders told investors in the second quarter calls.

Movements that Etna took last year to rationalize her products and geographies led to an “optimal” medication, said Steve Nelson, president of Aetna, during the CVS call with analysts at the end of July.

“All respect for the environment in which we are – very, very encouraged how the neighborhood takes place,” said Nelson.

Membership of MA of Humana has dropped more than 400,000 people since the end of 2024, while CVS fell by more than 200,000 people.

In comparison, other insurers such as United have expanded their membership in the MA for 2025, probably capturing some of the members at high prices that Humana and CVS have unloaded, analysts said.

The insurance division of Unitedhealthcare’s insurance has added more than 500,000 MA members to the first half of 2025 – the greatest growth in registrations among the main organizations of MA. This placed the payer in a difficult situation: SELLED with more membership at a higher cost of cost.

The leaders of Unitedhealthcare declared that they had considerably underestimated the accelerated medical trend when they evaluated their plans for this year, especially in MA.

Medicare is the largest engine expectations for lower profits for 2025, according to Tim Noel, head of Unitedhealthcare. “In short, most meetings intensify in services and cost more”, Christmas Said during the call of Unitedhealth at the end of July with investors.

Molina has also said that medical prime percentage medical costs – a metric called medical loss ratio, or MLR, monitored by investors – arrived higher than the company expected MA.

In comparison, Humana and CVS leaders said their plans were well equipped to cover high medical use. Humana said its reduction in companies should thank.

“We were the only plans to reduce the advantages [2024] And we have reduced more advantages than any of our competitors in [2025]”Said George Renaudin, president of Humana’s insurance segment, when calling the end of July.

Given the discounts, “we have a significant difference for the value of the advantages of peers while certain peers have kept their stable advantages or even invested more in their advantages,” he added.

The payers who did not adequately plan the costs indicated that they planned to reduce the services and leave additional markets in 2026 in order to recover the gains and take the right side of Wall Street.

Unitedhealthcare, which is the largest MA insurer in the United States, described a particularly aggressive strategy. The payer intends to leave plans that currently serve more than 600,000 members, managers said.

Unitedhealthcare will also increase bonuses and reduce the advantages to “focus intensely” on profits, said Christmas when investing.