Nearly all Vermonters enrolled in individual Medicare Advantage plans will lose their coverage in 2026 as two major insurers exit the state’s market.
Blue Cross Blue Shield of Vermont (Vermont Blue Advantage) and many of UnitedHealthcare’s Medicare Advantage plans will no longer be available.
“Vermont’s Medicare Advantage marketplace has collapsed,” said Mike Fisher, Vermont’s health care advocate. “There’s no insurance companies offering a statewide plan.“
Here’s what you need to know.
What’s Happening
Two major insurers are scaling back or completely exiting Vermont’s individual Medicare Advantage market for 2026:
Blue Cross Blue Shield of Vermont (Vermont Blue Advantage): Discontinuing all Vermont Blue Advantage plans, affecting approximately 26,000 members.
UnitedHealthcare: Ending Medicare Advantage coverage in 14 Vermont counties, impacting around 7,800 members.
In total, more than 51,600 Vermonters enrolled in individual Medicare Advantage plans will need to find new coverage for 2026. This represents nearly the entire individual Medicare Advantage market in the state.
Important Note: These changes only affect individual Medicare Advantage plans. Large employers may continue to offer Medicare Advantage coverage to their retirees through employer-sponsored plans.
Why the Exit?
Vermont’s Medicare Advantage exits stem from the same financial pressures hitting insurers nationwide, but with Vermont-specific complications:
- Unsustainable Membership Growth: When two other Medicare Advantage plans exited Vermont last year, Blue Cross Blue Shield of Vermont couldn’t handle the influx of new members, straining the plan’s finances.
- Rising Healthcare Costs: Medical expenses are increasing faster than the rates insurers can charge, making plans unprofitable.
- Limited Competition: Vermont’s small, rural market with limited competition meant fewer options for spreading risk and managing costs.
- Lower Federal Payments: Insurers cite decreased payments from the federal government that don’t keep pace with actual care costs.
- High Utilization Rates: More patients are seeking and paying for care, cutting into insurer profits and in some cases leading to losses.
What Are Medicare Advantage Plans?
Medicare Advantage plans (also called Medicare Part C) are an alternative way to get Medicare benefits through private insurance companies approved by Medicare.
Instead of having Original Medicare (Parts A and B) plus a separate prescription drug plan, Medicare Advantage plans often bundle everything together into one plan.
These plans may include:
- Hospital coverage (Part A)
- Medical coverage (Part B)
- Prescription drug coverage (Part D)
- Additional benefits like dental, vision, or hearing aids
Medicare Advantage plans were particularly attractive because they often had lower premiums than buying separate Medigap and Part D plans, and they capped annual out-of-pocket expenses. About half of all Medicare-eligible Americans are now enrolled in these private plans.
The key difference is that with Medicare Advantage, you’re getting your Medicare benefits through a private insurance company rather than directly through the government.
Need Help With Medicare?
If you have any questions about this situation (or Medicare in general), our licensed insurance agents are standing by.
Simply call us at +1 877-360-6565 (TTY: 771) or click the button below to schedule an appointment.