2027 Medicare Advantage: Flat premiums mask rising costs and shrinking plan choices
CMS data shows 2027 Medicare Advantage premiums will drop 16% to $12, but insurers are cutting plans and raising out-of-pocket costs to boost margins. Enrollment is projected to fall to 34 million, with major carriers like Centene and Humana exiting hundreds of counties.
Key points
- Weighted average MA premiums fall from $14.37 to $12.00 in 2027, though this includes lower-cost special needs plans.
- Insurers are reducing plan counts; Centene cuts ~3,000 plans, Humana ~2,400, and UnitedHealthcare ~690.
- Average maximum out-of-pocket limits rise 10%, and Part D deductibles increase 30% across major carriers.
- Total MA enrollment is projected to drop by 2 million to 34 million, potentially falling below 50% of the Medicare population.
- Open enrollment runs from October 15 to December 7, 2026, with plans required to notify beneficiaries of changes by September 30.
Background
This follows a volatile 2026 enrollment period where nearly 3 million seniors lost coverage. In August, Humana announced exits affecting 600,000 members, triggering guaranteed-issue Medigap windows. The current cuts are part of a broader industry shift to improve margins after years of high medical spending, occurring alongside CMS efforts to curb overpayments and the end of a Biden-era Part D subsidy.
How outlets are covering it
CMS and the Trump administration emphasize 'stability,' noting 99% of beneficiaries have at least one plan option and 97% have ten or more. They highlight the 16% premium drop. However, Healthcare Dive and analysts from Stephens and J.P. Morgan argue this masks significant turmoil, with insurers sacrificing membership for margin improvement. 24/7 Wall St. warns that flat premiums hide rising hospital copays and deductibles, while KFF notes insurers may be trimming drug formularies and supplemental benefits to offset costs. CMS data shows flat total plan counts, but this is driven by growth in special needs plans offsetting cuts in traditional MA and MA-PD plans.
Why it matters
Seniors face a complex 2027 enrollment period where lower monthly premiums may come with higher costs when care is used. The reduction in plan choices and geographic exits by major insurers could force beneficiaries into less favorable coverage or require them to navigate Medigap options, impacting their financial security and access to care during a midterm election year.
What to watch
Open enrollment begins October 15. Beneficiaries should review their Annual Notice of Change by September 30, comparing 2026 Evidence of Coverage with 2027 terms for changes in copays, deductibles, and network access. Those losing plans should utilize guaranteed-issue windows for Medigap or compare new MA options. CMS expects enrollment to be higher than projected, but market volatility may continue.
- Here’s how much insurers are cutting Medicare Advantage plans for 2027 Healthcare Dive
- CMS projects Medicare Advantage premiums to decline by 16% in 2027 Fierce Healthcare
- Medicare unveils 2027 rates for private Medicare, Part D plans USA Today
- Your ANOC's First Page Says $0 Premium Again for 2027. Page Six Says the Hospital Copay Went From $295 a Day to $395, in the Same Size Type 24/7 Wall St.
- Medicare Advantage insurers pull back even further Modern Healthcare
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