CMS Says Medicare Advantage Premiums Will Drop in 2027 - But There's a Catch

Retirees worried about rising health care costs just received a rare bit of good news.

The Centers for Medicare & Medicaid Services (CMS) says two key premium costs are expected to fall for those enrolled in a Medicare Advantage plan in 2027.

Find out more about these savings, and why the overall picture might not be as good for your financial fitness as you hope.

Which Medicare costs are falling in 2027?

The weighted average Medicare Advantage premium in 2027 is falling from $14.37 to $12, a 16.5% decline.

Meanwhile, supplemental benefits such as dental, hearing, and vision benefits are projected to remain stable next year.

The Part D portion inside Medicare Advantage plans that covers prescription drugs is dropping from $11.32 to about $7 after rebates. That is a savings of 38% compared to 2026.

CMS Administrator Dr. Mehmet Oz says the lower premiums are a result of the government's commitment to "slashing handouts to big insurance companies."

Who will save on Medicare in 2027?

Nearly 80% of Medicare Advantage beneficiaries who remain with their current plan are expected to see their premium costs fall or stay the same in 2027, according to CMS.

For millions of seniors, this is great news.

However, 20% of the 34 million beneficiaries expected to be enrolled in Medicare Advantage during 2027 are not going to enjoy such benefits and are likely to experience higher premium costs.

Medicare costs that continue to climb

Even those who save on Medicare Advantage premiums may feel the sting of rising prices in other aspects of Medicare. These include:

• Deductibles
• Copays
• Out-of-pocket maximums

For example, Medicare deductibles are expected to climb from $282 to $293 next year. The deductible is the amount you pay before your coverage kicks in.

Some beneficiaries also may face other obstacles, such as shrinking provider networks or stricter authorization rules.

In addition, while the number of Medicare Advantage plans on offer is expected to remain relatively flat nationally in 2027, some individual states are going to lose dozens of options. And in some markets, carriers plan to withdraw entirely.

Original Medicare costs rising

Seniors enrolled in Original Medicare are going to see some key costs increase in 2027.

Part B premiums are projected to rise by $6.60, to $209.50 per month. CMS has not yet announced the official, final numbers.

Standalone Part D premiums are also expected to move higher as a temporary federal government subsidy intended to rein in premium costs ends.

How to prepare for coming Medicare changes

Medicare's annual open enrollment period is slated for Oct. 7-Dec. 15. For most beneficiaries, this is the one time each year when they are allowed to make significant changes to coverage.

As you prepare for open enrollment, consider taking the following steps.

Review the Annual Notice of Change

In September, your Medicare Advantage or Medicare Part D drug plan should have mailed you an Annual Notice of Change (ANOC). This letter breaks down the important changes your plan is making in 2027.

Reading through this document helps you determine whether your doctors remain in your current plan's network next year, and whether the prescription drugs you need remain in your plan's formulary.

Consider whether it makes sense to change providers

If some of your doctors are no longer in your plan's network, it might be wise to use open enrollment to decide whether it's time to find new coverage.

The same is true if your plan's formulary no longer includes drugs that are important to maintaining your health.

Even if you are comfortable with your plan's coverage in 2027, it still makes sense to shop around during open enrollment. That way, you have the confidence that you have selected the best possible coverage at the lowest price.

CMS estimates that 97% of beneficiaries have access to 10 or more Medicare Advantage plans, so you should have plenty of options when shopping around.

How to get help with Medicare decisions

CMS offers an online Medicare Plan Finder that allows you to compare and contrast plans.

By entering your ZIP code and the type of plan you are seeking, you have the chance to compare total costs rather than merely the premiums plans charge.

Comparisons are available for health, drug, or supplement plans.

Beneficiaries who would like additional help should seek the assistance of official Medicare or licensed agents.

Bottom line

Millions of American retirees are likely to enjoy lower Medicare premium costs in 2027. That reality is something to celebrate for seniors struggling to cope with higher prices throughout the economy.

However, not everyone is expected to receive such lower expenses. And other aspects of Medicare may actually increase in cost next year.

The best way to keep more cash in your wallet is to use the upcoming Medicare open enrollment period to shop for the coverage you need at the lowest possible price.

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