CMS Forecasts Lower Medicare Advantage Premiums for 2027, Though Costs May Still Rise Elsewhere

Retirees concerned about climbing health care expenses have received a bit of encouraging news.

The Centers for Medicare & Medicaid Services (CMS) says two major premium costs are expected to decline for people enrolled in Medicare Advantage plans in 2027.

Here is a look at those savings, and why the broader picture may not be quite as favorable as it first appears.

Which Medicare costs are expected to fall?

The weighted average Medicare Advantage premium is projected to drop from $14.37 to $12 in 2027, a decrease of 16.5%.

At the same time, supplemental benefits such as dental, hearing and vision coverage are expected to hold steady.

The Part D drug coverage portion inside Medicare Advantage plans is forecast to fall from $11.32 to about $7 after rebates, a decline of 38% from 2026.

CMS Administrator Dr. Mehmet Oz says the lower premiums reflect the government's push to reduce payments to large insurance companies.

Who stands to benefit?

CMS says nearly 80% of Medicare Advantage beneficiaries who keep their current plan are expected to see premiums drop or remain unchanged in 2027.

For millions of seniors, that is welcome news.

Still, 20% of the 34 million people expected to be enrolled in Medicare Advantage in 2027 are not likely to see those same benefits and may face higher premium costs.

Other Medicare expenses that may keep rising

Even beneficiaries who save on Medicare Advantage premiums could still face higher costs in other parts of Medicare, including:

• Deductibles
• Copays
• Out-of-pocket maximums

For example, Medicare deductibles are projected to increase from $282 to $293 next year. A deductible is the amount you pay before coverage begins.

Some beneficiaries may also encounter narrower provider networks or tighter prior-authorization rules.

In addition, the number of Medicare Advantage plans available nationwide is expected to stay relatively steady in 2027, but some states could lose dozens of options. In certain markets, insurers plan to exit altogether.

Original Medicare costs are also climbing

Seniors enrolled in Original Medicare are expected to see some important costs go up in 2027.

Part B premiums are projected to rise by $6.60, reaching $209.50 per month, though CMS has not yet released final official figures.

Standalone Part D premiums are also expected to increase as a temporary federal subsidy meant to help contain premium costs comes to an end.

How to get ready for Medicare changes

Medicare's annual open enrollment period runs from Oct. 7 through Dec. 15. For most beneficiaries, this is the only time each year to make major coverage changes.

As open enrollment approaches, consider taking these steps.

Review your Annual Notice of Change

In September, your Medicare Advantage or Medicare Part D drug plan should mail you an Annual Notice of Change, or ANOC. This document outlines the key changes your plan is making for 2027.

Reading it can help you determine whether your doctors will still be in your plan's network and whether the prescription medications you rely on remain covered under the formulary.

Decide whether a different plan makes sense

If some of your doctors are no longer included in your network, open enrollment may be the right time to look for new coverage.

The same is true if your plan no longer covers medications that are important to your health.

Even if you are satisfied with your current coverage, it can still be smart to compare plans during open enrollment. Doing so may help you find the best coverage at the lowest price.

CMS estimates that 97% of beneficiaries have access to 10 or more Medicare Advantage plans, so many choices should be available.

Where to get help

CMS offers an online Medicare Plan Finder that lets users compare plans.

By entering your ZIP code and the type of plan you want, you can compare total costs instead of looking only at premiums.

Comparisons are available for health, drug and supplemental plans.

Beneficiaries who need extra help can turn to official Medicare resources or licensed agents.

Bottom line

Millions of retirees in the United States are likely to see lower Medicare premium costs in 2027, which is a welcome development for seniors facing higher prices across the economy.

But not everyone will see lower expenses, and other parts of Medicare may become more expensive next year.

The best way to protect your wallet is to use the upcoming Medicare open enrollment period to compare options and choose the coverage you need at the lowest possible price.

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