Medicare Advantage Premiums Are Expected to Ease in 2027 — What Retirees Need to Check

Medicare Advantage premiums are projected to drop 16.5% in 2027, falling from a weighted average of $14.37 a month to $12, according to CMS. But your own premium may not budge, and it could even rise. The national average does not show what your specific plan charges.

That distinction matters when you are building retirement health care costs into your budget. A lower monthly premium can still leave you with higher prescription or doctor-visit expenses. With open enrollment underway, it is a good time to review your coverage and compare options before selecting a plan.

The reduction amounts to $2.37 a month

If your premium dropped by that much, even one $30 increase in a copayment could erase the year’s savings. Before deciding, look at the actual dollar change between your current plan and next year’s premium to see how much it really helps your budget.

That puts the headline into context. A smaller premium can be helpful, but the dollar amount often matters more than the percentage when you are trying to manage expenses.

Will Medicare Advantage premiums actually fall for you?

An enrollment-weighted average gives more influence to plans that cover more people. It is not simply an average of every plan’s premium added together and divided by the number of plans.

CMS’s estimate includes Medicare Advantage plans with prescription coverage and Special Needs Plans. Your premium depends on the plan you choose. Someone already paying a $0 premium should not expect a 16.5% discount, and other enrollees may see increases instead.

Do you still pay Part B premiums with Medicare Advantage?

Medicare Advantage does not replace your entire Medicare bill with a $12 monthly payment. You generally still pay your Part B premium, along with any premium charged by the Advantage plan.

Medicare says some plans may help pay part or all of the Part B premium, but that benefit is not universal. When comparing plans, make sure you know what each price actually includes. A $0 plan premium does not mean you have no health care costs.

Drug premiums are declining inside Advantage plans

The projected drug premium within Medicare Advantage plans is falling 38%, while the average for stand-alone Part D plans is edging up. The $7 figure refers only to the drug portion of Advantage coverage; it is not something you add on top of the $12 average. Check the total premium listed for your plan to understand what you would actually pay.

The first figure reflects a 38% decrease. These are separate measures for different groups, so do not add $7 and $12 together to estimate your bill. Use the total premium shown for your own plan.

Your options depend on where you live

CMS projects about 5,532 Medicare Advantage plans nationwide, compared with 5,553 in 2026. More than 99% of beneficiaries are expected to have access to at least one plan, and 97% are expected to have access to 10 or more.

Still, your practical choices may be far narrower. Ten plans mean little if several do not include your specialist or cover your medications well. Start with the plans available at your address, then narrow the list based on the care you actually use.

Read the plan’s change notice first

Before comparing alternatives, look for your Annual Notice of Change. Plans send it each fall to explain changes that take effect in January.

Use it to spot anything that deserves attention, such as a higher deductible, a different copayment, or a change in coverage. Then review the plan’s detailed materials if anything is unclear. Even if you stay with the same plan, do not assume the costs and benefits are unchanged.

Compare more than the monthly premium

Look beyond the monthly payment and review the deductible, copayments, coinsurance, and annual out-of-pocket limit for covered services. Pay special attention to the care you use most often. A higher specialist copayment matters more if you see that doctor every month.

It helps to make two rough estimates: what you might spend in a typical year and what a year with heavier medical use could cost. A low premium can look far less attractive if specialist visits or hospital care are expensive.

Check prescription costs one by one

Use Medicare Plan Finder with your current medications and pharmacies. Compare estimated annual drug costs alongside premiums instead of assuming a lower drug premium automatically means cheaper prescriptions.

Check whether each drug is covered, what you would pay, and whether the plan requires prior approval or step therapy. Include the exact dosage and refill schedule. A comparison based on an outdated medication list will not help much at the pharmacy counter.

Review doctors and extra benefits

Make sure your doctors, specialists, and preferred hospital are in the plan’s network. Network rules vary: HMOs usually limit routine care to in-network providers, while PPOs generally allow out-of-network care at a higher cost.

For dental, vision, and hearing benefits, ask which services are covered, which providers take part, and what limits apply. “Dental included” does not tell you what a crown may cost. Focus on the benefits you expect to use, not just the length of the list.

Bottom line

The projected premium decline does not tell you whether your own coverage is becoming cheaper. To avoid costly mistakes, compare what you would pay over a full year for the care and prescriptions you need before choosing a plan.

If you are comparing coverage with a spouse, price your options separately. The same plan may work well for one of you and poorly for the other, especially if you take different medications or see different specialists. In some cases, choosing different plans may make more sense than staying with one insurer.

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal