Texas insurer drops Medicare Advantage, drug plans

Seniors across Texas will need to look for new health insurance, as Blue Cross Blue Shield of Texas ceases offering Medicare Advantage plans beginning in 2027.

A notice recently added to BCBSTX's website reads, "Effective January 1, 2027, BCBSTX will no longer offer Blue Cross MedicareRx (PDP) Prescription Drug Plans, Blue Cross Medicare Advantage Plans or Blue Cross Medicare Advantage Dual Care Plus (HMO SNP) Plans for the 2027 plan year."

The plans affected include BCBSTX's Medicare Advantage plans, including dual plans available to those eligible for Medicare and Medicaid, and its supplemental Medicare Part D plans covering prescription drugs costs not covered by traditional Medicare. Affected customers will have received a notice on non-renewal and will need to enroll in a new plan during open enrollment, which began Oct. 15.

Medicare Advantage is a way to receive Medicare benefits through a private insurance provider. The plans function much like employer-provided plans, with select in-network healthcare providers and varying deductibles and copays. Monthly premiums for Medicare Advantage can be as low as zero dollars, not including the Medicare premium paid to the Social Security Administration. The plans often include prescription coverage, which must be purchased as a supplement to traditional Medicare, and other benefits not offered by Medicare, like vision and dental coverage. This has made them an appealing option for seniors turned off by an additional monthly fees for supplemental, or Medigap, coverage.

More than 35 million seniors, representing over half of all people eligible for Medicare in 2026, are enrolled in a Medicare Advantage plan.

Unlike traditional Medicare, where the federal government pays for care directly, with Medicare Advantage, the government pays a fixed amount of money to private insurers, and the insurer takes over the administration of benefits. But the program is in a precarious spot, as insurers pull out of offering Medicare Advantage plans and providers pull out of accepting them.

Blue Cross Blue Shield of Minnesota, which, like BCBSTX, is a separate independent licensee of the Blue Cross Blue Shield Association, announced an overhaul of its Medicare Advantage offerings for 2027.

In a candid article published in the Minneapolis/St. Paul Business Journal, the company's president and CEO Dana Erickson wrote, "Across the entire Medicare Advantage market, serious financial strain has taken hold. ... [W]e have not been immune to these pressures. In just the past three years, our company has lost more than $500 million on Medicare alone. While I am reassured that our financial foundation remains strong, that does not mean we can ignore such an unsustainable trend."

According to an analysis by health policy non-profit KFF, 2.6 million seniors had their Medicare Advantage plans terminated at the start of 2026, 13% of all enrollees in plans with prescription drug coverage. The rising cost of providing care, outpacing increases in federal payments, as well as greater usage of the plans, has led to decreased margins for insurance companies, the analysis said. UnitedHealthcare, Humana and Molina have all recently made moves to reduce their Medicare Advantage offerings.

Meanwhile, many hospitals have stopped accepting certain Medicare Advantage plans, citing slower approvals and repayment for medical care. In 2025, providers at Texas Health Resources and UT Southwestern Medical Center stopped accepting Aetna's Medicare Advantage plans, and in 2026, the Mayo Clinic, ranked the nation's No. 1 hospital, left most major Medicare Advantage networks.

"Blue Cross and Blue Shield of Texas is committed to access to care and solutions for seniors that helps them navigate a complex health care system, make the most of their benefits and live healthier lives," the company said in a statement. "As quality standards change, we remain focused on improving health outcomes, enhancing the member experience, and enabling access to care. We continue to invest in programs and partnerships will that we believe will help members get the right care at the right time and strengthen overall satisfaction across our plans for the long term."

"Our focus remains on doing what's best for our members and advancing the performance of our plans year over year. We have been integrating our newly acquired Medicare plans and implementing strategies and investments to strengthen our performance, which will benefit our customers in the long term."

BCBSTX is owned by Health Care Service Corp., which also provides Medicare Advantage plans through another brand, HealthSpring, since acquiring Cigna's Medicare Advantage portfolio in a 2025 deal. Health Care Service Corp. will continue offering Medicare Advantage plans through HealthSpring, and enrollees in BCBSTX MedicareRx plans will be moved automatically to a HealthSpring plan. According to Medicare Guide, Health Care Service Corp. holds 11.2% of Texas' Medicare Advantage enrollment, mostly in its HealthSpring plans, but HealthSpring plans are only offered in 47 Texas counties, compared with the 227 that BCBSTX sold plans in.

Former BCBSTX Medicare Advantage enrollees may look for different Medicare Advantage plans, and it is important to consider a plan's coverage of existing prescriptions and whether one's providers are still in-network. Another option is to move to traditional Medicare, which can be used anywhere. While Medigap coverage can often be pricey or denied outright, seniors affected by the discontinuing of their Medicare Advantage plan are usually eligible for the right to purchase Medigap plans without being denied coverage or charged more due to a health condition, as outlined in one's notice of non-renewal.

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