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The Federal Agency that oversees Medicare, the Centers for Medicare & Medicaid Services (CMS), finalized an extensive set of changes to Medicare Advantage and Part D in early April 2026. Most of these changes take effect for coverage beginning Jan. 1, 2027. The changes are set to include plan quality ratings, prescription drug coverage, supplemental benefits, and marketing rules.
With more than 67 million Americans on Medicare, these changes have a huge impact on what plans will look like when fall open enrollment starts on Oct. 15. The best way to avoid wasting money in retirement related to Medicare and Medicare Advantage is to stay ahead of the changes and get ready to review your plan and switch if necessary during open enrollment.
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Star ratings are being recalculated
CMS removed 11 measures from the Star Ratings system. Several of these were tied to call center performance and were eliminated because they were considered administrative or produced too little variation between plans.
This change in the way star ratings are calculated gives more weight to clinical outcomes and patient experience. There's also a new depression screening and follow-up measure being added to the star ratings, but it won't show up until 2029. Because star ratings determine which plans earn bonus payments, the changes are estimated to add roughly $19 billion in program costs between 2028 and 2036.
Part D drug coverage protections are now permanent
The Inflation Reduction Act changes are already in effect for 2026, but now they are locked in as permanent law. That means the $2,100 annual out-of-pocket cap on drug costs and the elimination of the coverage gap cannot be reversed in a future budget change.
Once you hit the cap in a given year, your covered drugs cost you nothing for the rest of it. These protections were already in effect for 2026, but codifying them means you can budget around them long-term without worrying they will be rolled back in the future.
Plans no longer have to remind you about unused benefits
This subtle and somewhat sneaky change in supplemental benefits is the one that's most likely to cost you money without you realizing it. This new rule eliminates the requirement for plans to send mid-year notices to remind enrollees about unused supplemental benefits. These could include gym memberships, dental and vision allowances, and over-the-counter spending cards.
If you're not using the benefits that you're entitled to, your plan may no longer prompt you to do so. Therefore, you need to get in the habit of checking your plan's evidence of coverage and set a calendar reminder to revisit it mid-year, every year.
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Marketing rules were relaxed
Several consumer protections related to marketing rules that were introduced in 2023 were rolled back. Recording retention requirements for agent calls were cut from 10 years to six years, and agents are no longer required to refer callers to State Health Insurance Assistance Program (SHIP) counselors.
Additionally, restrictions on superlative language in plan marketing were also loosened. The requirement for utilization management committees to include a health equity expert and publicly post equity analyses was also removed.
This means that enrollees need to be much more proactive in doing their own due diligence before they commit to a specific plan.
Plans are getting a bigger payment increase than expected
Medicare Advantage plans are receiving a 2.48% payment increase, which is worth about $13 billion from the federal government in 2027. This is a significant jump from the 0.09% increase that was initially proposed.
This larger increase was finalized after heavy lobbying from insurers, who argued the original figure didn't keep up with rising medical costs and would force benefit cuts. This substantial increase reduces the chance of benefit cuts, shrinking networks, and rising out-of-pocket costs.
A key enrollment protection wasn't finalized
Probably one of the more anticipated proposals in this set of changes would have given you the right to switch Medicare Advantage plans mid-year if your doctor left your plan's network. Unfortunately, it didn't make the final ruling, but CMS said that it may revisit the idea in future rulemaking, although it gave no timeline. Being caught in a plan after your specialist or primary care doctor drops out is disruptive, potentially expensive, or detrimental to your health.
For now, the only protection you have is doing your homework before open enrollment closes each December. You need to confirm every provider you rely on is still in-network before you lock in a plan for the coming year.
Debit card rules for supplemental benefits are tightening
Many Medicare Advantage plans provide a debit-style payment card that's loaded with an annual allowance for dental, vision, hearing, over-the-counter items, and other supplemental benefits.
Beginning in 2027, these cards will be electronically restricted to only cover plan-approved items and verified at the point of sale in real time. Any balance left unspent expires at the end of the plan year.
Because you won't be able to use the card on ineligible purchases, it's a good idea to know exactly what your card does and does not cover to avoid embarrassment at the checkout. You also need to track your balance through the year and make sure you don't leave any money on the table by letting it expire in January.
Bottom line
The 2027 rule changes are a mixed bag for Medicare Advantage enrollees. The permanent qualification of Part D drug cost protections is a real win, and the higher payment rate to plans reduces near-term pressure on benefits. Lifting the restrictions on marketing safeguards and the elimination of mid-year benefit reminders place more responsibility on enrollees to stay informed and advocate for themselves if they want a healthy and stress-free retirement.
When your Annual Notice of Change arrives in September 2026, read it carefully. Check your premiums, formularies, and networks, as they can all change year to year.
Use Medicare's plan finder tool during open enrollment, which runs Oct. 15 through Dec. 7, to compare your options. Given the loose agent marketing rules, you may want to consult a free SHIP counselor to get some genuinely knowledgeable and unbiased guidance.
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