2026 AEP Strategic Briefing
California Medicare Advantage Market Intelligence
- October 7, 2025
- 15 min read
Executive Summary
California’s Medicare Advantage landscape is undergoing significant strategic realignment in 2026, with declining plan counts, intensifying competition among 37 active payers, and dramatic cost restructuring.
Total Plans 2026
-4.5% from 2025
Active Payers
+10 organizations
Avg. Monthly Premium
+8% YoY
Counties Covered
Varying competition
Market Landscape Overview
Plan Volume and Market Dynamics
California's Medicare Advantage market experienced a 4.5% contraction in 2026, dropping from 421 plans to 402 plans.
- 19-plan reduction reverses growth trajectory from 2022's 462 plans
- MAPD segment represents 98% of all California plans (394 total)
- Zero-premium plans: 295 (73% of offerings)
Geographic Coverage and Access
California's has around 4.98 million beneficiaries as of Sept 2025, which is covering 56 counties in 2026
Counties by Imperial Health
Counties by Elevance Health
Counties by Kaiser
Plan Type Segmentation and Strategic Shifts
Non-SNP vs. SNP Distribution
California demonstrates accelerating market segmentation toward Special Needs Plans, with Non-SNP plans declining 11.4% year-over-year.
D-SNP Growth
Non-SNP Decline
Total D-SNP Plans
HMO vs. PPO Market Structure
HMO Market Dominance
372 plans maintaining coordinated care models
PPO Contraction
Declined from 49 to 30 plans in 2026
Payer Analysis and Competitive Positioning
Market Leaders and Strategic Movements
California demonstrates accelerating market segmentation toward Special Needs Plans, with Non-SNP plans declining 11.4% year-over-year.
43 → 54 plans (+25.6%)
35 → 48 plans (+37.1%)
Geographic Repositioning
CVS Health: Major Contraction
Exited 27 counties, maintaining only 16—strategic focus on high-density, profitable markets.
SCAN Group: Targeted Expansion
Entered 6 new counties with zero exits, expanding to 19 total counties.SAE/SAR Strategic Assessment and Expansion
County-Level Market Dynamics
California's Service Area Expansion/Reduction (SAE/SAR) data reveals sophisticated strategic positioning among major payers. CVS Health Corporation's exit from 27 counties while maintaining 16 represents the largest single-state geographic contraction by a major payer, creating immediate market opportunities for regional competitors and new entrants.
SCAN Group's 6-county expansion with zero exits demonstrates aggressive regional growth strategy that capitalizes on major payers' strategic retreats. This expansion positions SCAN to capture market share in counties abandoned by national players, particularly as the company's California-specific focus provides operational advantages in regulatory compliance and provider network management.
National Market Context
California’s payer movements reflect broader industry trends, with major national players like UnitedHealth Group (131 county exits nationally), Humana (199 county exits), and CVS Health (115 county exits) pursuing “margin over membership” strategies. This national contraction creates opportunities for regional California specialists to expand market presence.
Geographic Repositioning
CVS Health: Major Contraction
Exited 27 counties, maintaining only 16—strategic focus on high-density, profitable markets.
SCAN Group: Targeted Expansion
Entered 6 new counties with zero exits, expanding to 19 total counties.Cost Analysis and Financial Trends
Premium Structure
Avg. Monthly Premium 2026
+8% YoY
Part C Premium
+29.2% increase
MOOP Trends
14 payers implement the maximum allowed MOOP of $9,250
$6,097 (+$923 from 2025)
$5,449 (+$1,461 from 2025)
Drug Deductible Revolution
Critical Alert: Deductible Surge
Avg. Deductible 2026
vs. 2024 ($107)
224 in 2025 and 126 in 2026
Zero-dollar deductible plans declined from 54% to 32 %, eliminating affordable drug coverage for significant populations.
Payer Strategies
Centene Corporation
+$169
CVS Health
+$113
Humana
+377%
Strategic Implications for AEP 2026
Competitive Positioning Opportunities
California's market contraction creates immediate opportunities for regional specialists and new entrants to capture market share abandoned by national players' strategic retreats. CVS Health's exit from 27 counties and overall plan reduction creates particular opportunities for California-focused organizations with operational expertise in the state's complex regulatory environment.
The dramatic drug deductible increases position plans maintaining lower deductibles or zero-dollar coverage as premium market differentiators, particularly important given California's diverse demographic composition including significant populations qualifying for Low-Income Subsidies that mitigate deductible impacts.
Member Decision Framework Changes
California's unique cost structure—with premium increases contrasting national decreases while drug deductibles triple—creates complex member decision frameworks that require sophisticated communication strategies. Plans must navigate explaining higher premiums and deductibles while maintaining competitive positioning against 36 other active competitors.
The HMO market dominance (92.5% of plans) combined with PPO contraction (38.8% reduction) suggests successful California strategies must emphasize coordinated care benefits and provider network strength rather than broad access flexibility. This trend favors organizations with strong California provider relationships and integrated delivery capabilities.
Conclusion
California's Medicare Advantage market transformation reflects broader industry dynamics while maintaining state-specific characteristics that create distinct competitive advantages for organizations understanding local market nuances, regulatory requirements, and member preferences. The 2026 AEP will test whether regional specialists can capitalize on national players' strategic retreats to build sustainable market positions.
