In its annual review of the Medicare and Medicare Advantage (MA) landscape, the Centers for Medicare and Medicaid Services (CMS) last month described the 2027 MA and Part D markets as broadly stable, citing a projected 16.5% decline in weighted average MA premiums and continued access to at least one MA option for more than 99% of Medicare beneficiaries. But underlying plan data and early market analyses point to a more complicated story for beneficiaries and for aging services providers.
Plans are continuing to rebalance their MA businesses in response to margin pressure, utilization trends, risk adjustment scrutiny, and quality rating changes.
Further, MA organizations are projecting 2027 MA enrollments to decline to only 34 million individuals in comparison to 2026 enrollment of 35.5 million.
A number of factors could contribute to this reduction in MA enrollment including: less attractive 2027 plans that increase enrollee out-of-pocket costs and reduce benefits; plan terminations; CMS-approved enrollment caps for some plans; 181 counties without an MA plan; MA plans’ elimination of broker commissions for enrollment into certain plan offerings; 2027 MA Star Rating declines; new Dual Eligible Special Needs Plan integration policies; and MA organization’s focus on profitability over enrollment growth.
For LeadingAge members, the key message is this: 2027 MA plan changes may show up less in monthly premiums and more in plan availability, cost sharing, maximum out-of-pocket limits, supplemental benefits, prior authorization, network design, and quality improvement priorities.
Beneficiaries will need to look closely at their Annual Notice of Change and compare plan details during open enrollment. Providers should anticipate continued MA organization efforts to protect margins while also looking for opportunities to demonstrate their value in care coordination, chronic disease management, transitions of care, and quality improvement.
Here are some key takeaways about what to expect from the 2027 MA plan offerings in preparation for Medicare and MA Annual Open Enrollment, which begins October 15:
Lower average premiums do not necessarily mean lower total costs.
CMS projects that weighted average monthly MA premiums will fall from $14.37 in 2026 to $12.00 in 2027. That is good news at the headline level, but a weighted average can obscure what individual beneficiaries will actually experience. One analysis indicates that the lower weighted average for 2027 is the result of the average including lower Special Needs Plan (SNP) premiums in the calculation and that “general- market MA-PD [Medicare Advantage – Part D prescription drug plans] show higher deductibles and out-of-pocket-limits, and smaller supplemental dental and Part B giveback benefits.” Some plans may reduce premiums by using rebate dollars for premium buy-downs, while reducing other benefits or increasing enrollee cost sharing elsewhere.
Medicare beneficiaries should not evaluate a plan based solely on the monthly premium but instead factor in total out of pocket cost, provider networks, and year-over-year plan benefits compared to traditional Medicare. A lower premium can be offset by higher copayments, higher deductibles, tighter networks, reduced supplemental benefits, or a higher maximum out-of-pocket limit. Providers should be prepared for beneficiaries to ask more questions about why their care costs are increasing even though the premium appears stable or lower.
Out-of-pocket costs are expected to rise for beneficiaries who use care.
Several analyses of the 2027 landscape suggest that plans are shifting more costs to beneficiaries through higher maximum out-of-pocket limits and deductibles. CMS finalized higher MA maximum out-of-pocket thresholds for 2027, including an in-network mandatory maximum of $9,850 and a combined in- and out-of-network maximum of $14,800 for PPOs. Those are ceilings, not necessarily the limits every plan will use, but they create room for plans to shift more of the costs to beneficiaries through new or increasing co-payments and deductibles. In contrast, traditional Medicare has no cap on these costs.
For beneficiaries, this means the cost of using care may matter more than the cost of enrolling in coverage (premium). For providers, this could mean more bad debt risk if they cannot collect the increasing co-payment, co-insurance amounts from the beneficiaries. Additionally, patient’s worried about their cost exposure may delay needed care, or be confused by bills, and frustrated or surprised about plan design changes, especially if they remained in the same plan from the prior year.
Supplemental benefits may remain broadly available, but their value may change.
CMS says supplemental benefits such as dental, vision, and hearing are expected to remain stable across the market. But “stable” availability does not mean every beneficiary will see the same dollar value, coverage rules, provider network, or utilization limits in 2027. Plans can preserve a benefit category while reducing the value of the benefit (e.g. last year’s $600 flexible debit card may now only be $200), narrowing eligible services (e.g. eliminate in-home supports or reduce covered over-the-counter items), adding more conditions, or changing vendors.
LeadingAge members should watch for changes in benefits that matter to older adults and people with complex needs, including transportation, meals, over-the-counter allowances, in-home supports, dental coverage, and post-discharge services. Even small changes can affect care transitions and beneficiary expectations. For HUD housing members should confirm their residents’ plans and any flexible benefit card rent benefits that could impact their rent calculations.
MA Plan Terminations and Tighter Networks Increase Risks to Beneficiary Access and Provider Participation
Although the total number of MA plans nationally is expected to remain relatively stable, plan availability, benefits, provider networks, and service areas continue to change at the local level. Analysts project that between 2 million and 4.6 million current MA enrollees could be affected by plan terminations, county exits, or automatic enrollment into comparable plans offered by the same MA organization. Many of the affected beneficiaries are enrolled in PPO plans, as some MA organizations are reducing their PPO offerings and placing greater emphasis on HMO products with narrower provider networks. Beneficiaries who are automatically moved to a new plan should carefully review changes in benefits, cost sharing, and provider networks, and may choose a different option during the Annual Enrollment Period (October 15 to December 7) or the MA Open Enrollment Period (January 1 to March 31, 2027).
For provider organizations, these changes underscore the importance of ongoing MA network and market analysis. Providers should not assume a beneficiary’s coverage will remain unchanged simply because the MA organization remains in the market. MA organizations routinely modify benefits, network participation requirements, service areas, and utilization management policies from year to year. The continued shift toward HMO products may increase the importance of network participation decisions, affect beneficiary access to providers, and contribute to ongoing pressure on reimbursement for post-acute care, home health, specialty care, and other aging services.
Special Needs Plans remain important, but policy changes may reshape growth.
Special Needs Plans (SNPs) have been a major driver of MA enrollment growth in recent years, but the 2027 landscape points to different trends by SNP type. D-SNP offerings are shrinking in some analyses, in part as CMS policies move toward greater Medicaid alignment and integration. New CMS policies are pushing for greater integration for dual eligibles who enroll in SNPs. Beginning in 2027, Dual Eligible SNPs (D-SNPs) will be limited to enrolling only those individuals already enrolled in their Medicaid managed care in the same geography. By 2030, all D-SNP enrollees – both new and existing — will be required to also be enrolled in the MA organizations Medicaid managed care plan in the same market. D-SNPs without an affiliated Medicaid managed care plan in a given geography are not subject to this specific enrollment-alignment requirement, although their enrollees may still be affected by other plan, state, or CMS policy changes. These changes could dampen beneficiary enrollment into these plans or shift beneficiaries from one D-SNP to another due to alignment/integration requirements.
At the same time, C-SNP and I-SNP offerings continue to evolve. Providers serving residents or patients with high clinical complexity should monitor whether SNP growth creates new partnership opportunities, new care coordination expectations, or new administrative burdens. Devoted Health is offering 133 new C-SNP plans for 2027.
Part D costs and drug benefit design deserve close review.
CMS projects that average stand-alone Part D premiums will rise by less than $1 per month in 2027, while average Part D premiums inside MA-PD plans will decline. But premiums do not tell the full story. The 2027 Part D standard deductible increases to $700, and the annual out-of-pocket threshold rises to $2,400 for covered prescription drugs. Formularies, pharmacy networks, prior authorization, step therapy, and drug tiering will continue to vary by plan.
Beneficiaries taking multiple medications or high-cost drugs should compare total annual drug costs, not just premiums. Providers should expect medication affordability, formulary changes, and pharmacy access to remain recurring issues for older adults and caregivers.
Star Ratings will affect plan revenue, reputation, and provider priorities.
CMS has released the 2027 MA Star Ratings, and overall ratings declined. Only 15 MA contracts earned a 5-star rating, down from 22 in 2026, while approximately 71% of MA enrollees remain in contracts rated 4 stars or higher. Star Ratings matter because they influence quality bonus payments, rebate dollars, plan reputation, and beneficiary enrollment decisions.
Plans that fall below 4 stars may lose access to the 5% quality bonus and may face additional financial pressure. Some MA organizations may try to offset that pressure through provider rate negotiations or administrative controls. At the same time, providers can use Star Ratings measure weaknesses to make the case for partnership, especially in preventive care, chronic disease management, care transitions, medication safety, and functional outcomes.
Annual Open Enrollment Begins October 15
Medicare’s Annual Open Enrollment begins on Thursday, October 15 and continues through December 7. Given all of the 2027 changes and impacts, beneficiaries should carefully review their options between original Medicare and available MA and SNP plans. For those who are losing their 2026 MA plan, they are encouraged to closely review their Annual Notice of Change and pay close attention to key deadlines, and understand what 2027 plans might cover and how it differs from their current plan. This includes examining the plan’s Evidence of Coverage, formulary, provider directory, pharmacy network, prior authorization requirements, maximum out-of-pocket limit, drug costs, and supplemental benefits before staying in or switching plans.
During this time, providers are able to point the older adults they serve to key, unbiased resources, share information about which plans they contract with and why, and host invited speakers from State Health Insurance Programs and other trusted sources to offer education on available options. LeadingAge has created this “Medicare Open Enrollment 2027: What You Need to Know” explainer as a resource for members and beneficiaries.
Providers should also prepare for the changes coming. Ask residents and clients what plan they are enrolling in for 2027. This information can help provider organizations decide which MA networks to prioritize in their upcoming contract negotiations, and to look at these plans’ MA Star Ratings to identify areas they need to improve and devise a message for how you can help them. Consider reviewing your organization’s internal approaches for collecting co-payments and co-insurance to reduce potential bad debt.
After several years of disruption—marked by private Medicare plans making “business decisions” that can reduce access and deny coverage for needed services—the central question is whether the Medicare Advantage program is still delivering enough value for beneficiaries, providers, and taxpayers.
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