2025 AEP Insight📊

2025 Medicare Trends: Contraction, growth, and strategic shifts

October 21, 2024 Market Research

The Medicare landscape has undergone a substantial transformation in 2025, marked by an evident consolidation with respect to the number of plans available for beneficiaries, noticed a prolonged period of growth. As of September 2024, Individual Medicare Advantage (MA) enrollment has surpassed 28 million. This article offers insights into the national distribution of MA plans for 2025, along with a state-level overview that highlights important takeaways for MA Only and MAPD plans. Drawing facts and insights based on CMS landscape and crosswalk data released, we will explore the evolving dynamics within the MA landscape. Our analysis will delve into how changes in plan types over the past five years have contributed to market expansion or reduction. Focus on the significant roles played by Non-Special Needs Plans (Non-SNP), Dual Eligible Special Needs Plans (D-SNP), Chronic or Disabling Condition Special Needs Plans (C-SNP), and Institutional Special Needs Plans (I-SNP), as well as HMO and PPO categories.

National Overview

First-ever shift: Medicare Advantage plan count reduces from 5,805 to 5,682 in 2025

The past trend from 2019 reveals a clear deceleration in the growth of plans, shifting from a period of rapid expansion to a slight contraction. Growth rate over the years peaked at 17.1% in 2019, but progressively slowed—15.0% in 2020, 12.8% in 2021, 9.1% in 2022, and 6.3% in 2023. By 2024, growth was minimal at 1.1% Year-over-Year (YoY), indicating market saturation.

In 2025, the market contracted by -2.1% YoY, the first decline in Medicare industry. This suggests a period of consolidation, from growth to a slight decrease may reflect changing market dynamics, where innovation has plateaued, or there has been a refocus on enhancing existing plans.

Note:

The total number of plans is divided into several categories, which include Renewal Plans, Consolidated Renewal Plans, Renewal Plans with Service Area Expansion (SAE), Renewal Plans with Service Area Reduction (SAR), Initial Contracts, and New Plans.
Categories of plans will be represented in italics (e.g.: Consolidated Renewal Plans, New Plans).
New Plans (without italics or capitalization) indicate both New Plans and Initial Contracts. Renewal Plans is combination of Renewal Plans, Consolidated Renewal Plans, Renewal Plans with SAR and Renewal Plans with SAE.

The surge in Renewal Plans with SAR catalyzed industry contraction, with the plan count tripling in 2025 compared to 2024.

In 2025, the Medicare landscape saw a significant shift, with Renewal Plans with SAR tripling their count to 651 from just 214 in 2024 impacting around 1.9 million lives. This sharp rise stands out to be one of the reasons for industry-wide contraction, where the remaining renewal plan categories saw a reduction. Notably, the total number of new plans increased from 714 to 810, marking a 13% YoY rise, a reversal after the previous year’ 19% decline. At the same time, renewal plans fell from 5,091 to 4,872, underscoring the reshaping of the Medicare market. While new plans made a modest comeback, the SAR category’s explosive growth stands out against an overall industry slowdown.

Breaking down the plan categories for 2025, Renewal Plans continue to dominate with around 60% of the total share, though this is a slight decline from 2024’s 65%. Historically, Renewal Plans with SAE held the second-largest share, but in 2025, New Plans have taken this spot, comprising approximately 13% of the total. Following closely behind are Renewal Plans with SAR, which surged to 11.5%, a significant rise from just 3.7% in 2024. Meanwhile, Renewal Plans with SAE have been steadily decreasing—dropping from 20% in 2023 to 13% in 2024, and now only accounting for 9% in 2025.

State Overview

State-by-State Medicare Advantage Trends: Growth in 38%, Shifts in 54%, Stability in 8%

In 2025, several states saw notable shifts in plan counts, with growth in some areas and sharp declines in others. Pennsylvania led the increase with a 12% YoY rise, adding 35 plans compared to 2024, while Mississippi (22% YoY) and Georgia (10% YoY) also saw strong growth. States such as Louisiana, Tennessee, North Carolina, Indiana, and Colorado demonstrated notable growth in the number of plans from 2024 to 2025, each increasing by over 10 plans. This upward trend suggests an active expansion in Medicare markets, as essential areas of growth amidst overall industry consolidation.

States with Positive Growth in Plan Counts (2024 vs. 2025)

State	Number of plans in 2024	Number of Plans in 2025	Added Plans in 2025	Penetration rate (%)
Pennsylvania	281	316	35	44%
Georgia	162	178	16	43%
Mississippi	72	88	16	40%
Tennessee	118	131	13	48%
Louisiana	99	112	13	49%
North Carolina	162	174	12	44%
Colorado	120	132	12	42%
Indiana	144	155	11	41%

**Penetration rate (%) is based on September 2024.

However, significant consolidation was observed in major states like California, which dropped by 44 plans (-9% YoY), and New York, down by 36 plans (-13% YoY). Other regions, such as Washington (-18% YoY) and Wisconsin (-20% YoY), faced sharp contractions. Vermont experienced the most dramatic drop with a 67% YoY reduction in plan counts from 24 to 8 plans. These trends suggest a growing divergence in plan availability across states, with some regions consolidating and others expanding to meet demand.

States with Decline in Plan Counts (2024 vs. 2025)

State	Number of plans in 2024	Number of Plans in 2025	Declined Plans in 2025	Penetration rate (%)
California	465	421	-44	40%
New York	272	236	-36	44%
Wisconsin	144	115	-29	50%
Washington	152	125	-27	42%
Oregon	132	109	-23	49%
Florida	613	591	-22	52%
Idaho	83	66	-17	47%
Vermont	24	8	-16	23%
Massachusetts	113	99	-14	31%
Rhode Island	36	25	-11	55%

**Penetration rate (%) is based on September 2024.

At the national level in 2025, Florida is leading the way with 591 total plans and 64 new plans, followed by California (421, 52), Texas (385, 55), Pennsylvania (316, 54) and New York (236, 26). Along with leading states, Georgia, Illinois, and Washington are witnessing a surge in new plans, with Georgia showing 37 new additions, Illinois and Washington at 35.

The distribution of plan categories across states reveals that Renewal Plans continue to dominate, reflecting national trends. Even in Consolidated Renewal Plans, the leading states are California (45), Florida (22), and Pennsylvania (17), while six states have no such plans. Texas (54), Ohio (33), and Florida (28) top the list for Renewal Plans with SAE, although four states have none. Texas (48), Indiana (41), and North Carolina (38) also show strong numbers for Renewal Plans with SAR, while Hawaii does not have any SAR plans. Initial Contracts are concentrated in Indiana, which has 11 plans, with Georgia, North Carolina, and Missouri each having 8.

Smaller states, like Vermont and Wyoming, exhibit minimal growth. Wyoming holds steady with 20 total plans despite no new additions, and Vermont with only eight plans—the fewest among all states—includes just a single New Plan. These variations reflect diverse strategic priorities across regions.

MA Only / MAPD Overview

Renewal Plans with SAR increased from 8% to 18% in MA Only plans and from 3% to 11% in MAPD plans.

In 2025, the Medicare Advantage Prescription Drug (MAPD) segment shows a slight decline in the total number of plans, dropping from 5,321 in 2024 to 5,200—a decrease of approximately 2.3%. This reflects a continuation of the slowing growth rate seen in previous years. For MA Only plans, the downward trajectory is even more pronounced. The total number of plans decreased marginally from 484 in 2024 to 482 in 2025, indicating a YoY decline of less than 1%. Despite overall market consolidation, a notable increase was observed in the inclusion of new plans, with MA Only plans rising by 32% YoY and MAPD new plans by 12% YoY in 2025.

The same trend holds across both, MA Only and MAPD plans, with Renewal Plans continuing to have the largest share, though they dropped from 64% to 59% in MA Only and from 65% to 60% in MAPD. Renewal Plans with SAE experienced a sharp decline, particularly in MAPD (13% to 9%) and MA Only (17% to 11%). On the other hand, New Plans showed an uptick, signifying renewed innovation, with MA Only increasing from 7% to 10% and MAPD from 12% to 13%.

Special Needs Plan Type Overview

27% of C-SNPs in 2025 are new plans, though no Initial Contracts were introduced

In 2025, the distribution of Special Needs Plan (SNP) types highlights a significant focus on targeted care, with C-SNP comprising 7% of the total and D-SNP making up 17%. This indicates a strong commitment to integrated care for those eligible for both Medicare and Medicaid. In contrast, I-SNP plans account for only 3%, while the Non-SNP category remains dominant, representing 74% of the overall total.

C-SNP

The count of C-SNPs has steadily increased from 169 in 2020 to 391 in 2025. The total number of plans added in 2023 (+33) and 2024 (+6) was minimal, while 2025 saw a significant addition of 69 plans, resulting in a 21% YoY increase in C-SNPs. Notably, 104 new C-SNPs were introduced in 2025, compared to 84 in 2024 with no Initial Contracts. Aside from Consolidated Renewal Plans, other plan categories experienced growth. In both Renewal and New Plans, 38 plans were added for C-SNP type. Florida leads with the highest number of total C-SNPs at 84 plans and California in new plans, while seven states do not have any C-SNPs. Tennessee notably increased its plans from 3 to 12.

D-SNP

This category has shown robust growth from 545 members in 2020 to 945 in 2025. There is an addition of 70 plans in 2025 compared to 2024, maintaining a consistent growth trajectory with an 8% YoY increase, slightly lower than in previous year. Notably, 166 new D-SNPs were introduced in 2025, surpassing the 134 added in 2024, which contributed to a total increase of 32 plans. While the Renewal Plan with SAE category saw a decline of 48 plans, other categories experienced moderate growth. The Renewal Plans with SAR category made a significant leap from 28 to 92, indicating a shift in focus. Florida remains the leading state with a total of 114 D-SNP plans, while Washington leads in new plans with 16. Notably, New Hampshire, Vermont, and Illinois do not have any D-SNPs, while Puerto Rico increased its D-SNPs from 26 to 36, and Washington saw growth from 16 to 26 plans.

I-SNP

The I-SNP type has shown fluctuations over the years, with the total plans decreasing from 191 in 2023 to 162 in 2025. The growth rate was initially strong, with a peak of 19.7% YoY in 2021, but a negative growth rate has been observed in the last two years. While 18 new plans were introduced in 2024, approximately 24 new I-SNPs will be available in 2025. The primary area of concern within this category is the Consolidated Renewal Plans, which saw a significant drop from 7 in 2024 to none in 2025. However, the Initial Contracts and New Plans increased by 3 plans each. Renewal Plans declined from 89 to 72, while Renewal Plans with SAR rose from 13 to 24. New York and Florida are leading with the total number of I-SNPs, and Indiana added 3 new plans. There are 5 states without I-SNPs.

Non-SNP

The Non-SNP category has exhibited a declining trend in recent years, with a total count of plans decreasing from 4,433 in 2024 to 4,184 in 2025. This decline reflects a 5.6% YoY drop, which is in stark contrast to the growth rates of previous years. The overall growth trajectory had been strong until 2022, but the recent decrease in plan counts is concerning. Earlier in 2024, new Non-SNPs saw a sharp decline with a 27% YoY drop, but in 2025, the trend reversed, showing an 8% YoY growth as new plans increased from 478 to 516.

Consolidated Renewal Plans decreased by 21, while Initial Contracts rose from 33 to 56. New Plans showed a modest increase, adding 15. However, there was a sharp decline in Renewal Plans, dropping from 2,980 to 2,572, and Renewal Plans with SAE fell significantly by 210 plans, down to 348. On the other hand, Renewal Plans with SAR saw a remarkable increase, jumping from 168 to 520 plans, indicating a shift in plan structure.

Though Florida and California remain the leading states for both new and total Non-SNP plans, they experienced declines in total counts in 2025, with Florida dropping from 406 to 381 and California from 352 to 307. In contrast, Pennsylvania saw growth, adding 20 plans for a total of 267, and Georgia added 15 plans, bringing its total to 123.

Plan Type Overview

New plans increase despite a reduction in total HMO and PPO offerings

All plan types are expected to see a decline in total availability in 2025. HMO plans continue to dominate with 61.9% of the market, though their count dropped to 3,518, down from 3,586 in 2024, continuing a downward trend. Similarly, PPO plans, which comprise 35.4% of all plans, decreased to 2,010 from 2,045 in 2024, reflecting a 1.7% YoY decline. In contrast to previous years, both HMO and PPO plan growth rates slowed in 2025. This overall contraction in HMO and PPO plans, following a period of growth through 2023, highlights a shift in the market.

Apart from HMO and PPO plans, no new plans were introduced in other categories. In 2025, there was a notable increase in new plan additions, reversing the trend from 2024. HMO plans grew by 12% YoY with 453 new plans, and PPO plans rose by 16% YoY, adding 357 new plans. Florida continues to lead in HMO plans with a total of 499 plans and 54 new ones, though this is fewer than in 2024. In contrast, Pennsylvania ranks first in PPO plans, showing growth from 2024. The total number of PPO plans increased from 136 to 164, with new plans rising from 21 to 36.

Other plan types, including Cost, MMP (Medicare-Medicaid Plans), MSA (Medical Savings Account), PFFS (Private Fee-for-Service), and Regional PPOs, collectively represent about 2.7% of the total plans. Among these, Cost plans fell from 57 to 50, and PFFS plans continued their downward trend, declining by 3 plans to a total of 24. The Regional PPO category also decreased, dropping from 60 to 51 plans. MMP plans saw a marginal decline by one plan, while MSA plans remained stagnant at 1.

Breakdown of HMO and PPO Based on SNP Types

Non-SNP type

Of the total Non-SNP plans, HMO plans account for approximately 54%, slightly down from 2024, while PPO plans represent around 42%. The overall trend for Non-SNPs plan types show a decline across the board, both in total counts and YoY percentages. Local HMO plans experienced the sharpest drop, falling by 173 plans, a 7.1% decrease compared to 2024. Local PPO plans also saw a reduction from 1,819 to 1,762 plan, a 3.1% decrease YoY, despite modest growth in prior years. While Regional PPOs saw a significant 15.7% YoY decrease, losing 8 plans. Other categories also followed this declining trend, with MSA plans remaining stagnant. However, there will be a positive development with the addition of 224 new Non-SNP HMO plans and 292 new non-SNP PPO plans in 2025, indicating a slight recovery in new offerings despite the overall contraction in total plans.

D-SNP type

D-SNP plans continue to exhibit growth, particularly in the Local HMO and PPO categories. HMO plans account for approximately 83% of the total D-SNP offerings. Local HMO plans saw a 6.3% YoY increase, adding 46 plans to reach a total of 780, continuing a steady upward trend from previous years. Local PPO plans grew by 18.1% YoY, adding 25 plans to bring the total to 163. In contrast, Regional PPO plans experienced a decline, dropping by 1 plan and continuing a downward trend. Overall, D-SNP plan offerings are expanding, especially in the HMO and PPO categories, while Regional PPOs continue to shrink. Notably, 124 new HMO plans and 42 new PPO plans were added within the D-SNP category.

C-SNP type

C-SNP saw significant growth, particularly in Local HMO and Local PPO categories. 89% of C-SNPs are HMO plans and 9% are from PPOs. Local HMO plans saw a robust increase of 19.2% YoY, compared to a modest 0.3% in 2024, bringing the total to 348. Local PPO plans also demonstrated strong growth, adding 13 plans to reach a total of 37. In contrast, Regional PPOs remained static, with no changes, holding steady at 6 plans for the fourth consecutive year. Overall, C-SNP plans continue to expand, particularly in Local HMO and PPO offerings, while Regional PPOs show no growth. Notably, 90 new C-SNP HMO plans were introduced, along with an increase in new C-SNP PPO plans, bringing their total to 14 from 6.

I-SNP type

70% of the I-SNPs are coming from HMO plans, remaining are PPOs. Local HMO plans slightly increased to 114, reflecting a modest growth of 2.7% YoY after a decline in the previous year. In contrast, Local PPO plans decreased significantly by 25% YoY, falling to 48 plans, marking a notable downturn following a period of stability. Overall, while Local HMO plans showed slight rise and the decline in Local PPO plans. New HMO I-SNP plans accounted for 15 additions, while PPO plans saw an increase with total of 9.

Conclusion

After experiencing a peak growth rate of 17.1% YoY during 2019, the market steadily slowed down, culminating in a 2.1% YoY decline this year—the first drop in Medicare’s history. This shift signals a consolidation phase as insurers navigate rising healthcare costs and regulatory pressures, leading to a pullback from unprofitable regions. Notably, the rise of Renewal Plans with SAR contributed significantly to this industry contraction, while new plans showed signs of resurgence.

Overall, while some states experienced growth in plan counts, the national picture reflects a divergence in Medicare plan availability, highlighting the ongoing challenges and opportunities within the sector. Despite facing challenges, the introduction of new plans, particularly in C-SNP and D-SNP categories indicates a strategic shift towards enhancing targeted care. As insurers adjust to changing dynamics, the focus on innovation and plan diversification remains crucial for navigating the evolving landscape and meeting the diverse needs of beneficiaries. In conclusion, the Medicare market’s evolution in 2025 underscores a complex interplay of growth and decline across various plan types.

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