Medicare Advantage Premiums Are Dropping 16.5% in 2027 - Here’s What Retirees Should Know

Medicare Advantage premiums are projected to fall 16.5% in 2027, from a weighted average of $14.37 a month to $12, according to CMS. Your own premium could stay the same or even increase, though. The national average doesn't tell you what your particular plan is charging.

That matters if you're budgeting for health care in your retirement plan. A lower monthly premium could come with higher costs for prescriptions or doctor visits. With Open Enrollment running October 15 through December 7, now is the time to check your 2027 coverage. Here's what to know before choosing a plan.

The decrease works out to $2.37 a month

If your premium fell by that amount, a single copayment increase of $30 could erase the year's savings. Check the actual dollar difference between your current and next year's premium before deciding how much room it leaves in your budget.

That puts the headline in perspective. If your premium fell by that amount, one higher copayment could wipe out the annual savings. A lower premium is useful, but the dollar amount matters more to your budget than the percentage.

Will your Medicare Advantage premium go down in 2027?

An enrollment-weighted average gives more influence to plans covering more people. It isn't simply the sum of every plan's premium divided by the number of plans.

CMS's figure includes Medicare Advantage plans with prescription coverage and Special Needs Plans. Your premium depends on your particular plan. Someone already paying a $0 plan premium shouldn't expect a 16.5% discount on that bill, and other enrollees could face increases.

Do you still pay Medicare Part B premiums with Medicare Advantage?

Medicare Advantage doesn't turn your entire Medicare bill into a $12 monthly payment. You generally still owe your Part B premium, plus any premium your Advantage plan charges.

Medicare explains that some plans help pay part or all of the Part B premium, though availability varies. When comparing prices, check what each quoted amount includes. A $0 plan premium doesn't mean you have no health care expenses.

Drug premiums are falling in Advantage plans

The projected drug premium within Medicare Advantage plans is falling 38%, while the stand-alone Part D average is rising slightly. The $7 figure describes the drug portion of Advantage coverage; it isn't a separate charge to add to the $12 average. Check your plan's listed total premium to see what you'd owe.

The first figure represents a 38% decrease. These are different measures covering different groups; don't add $7 to $12 to estimate your bill. Use the total premium shown for your specific plan.

Your choices depend on where you live

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

Your useful choices may be much narrower. Ten available plans don't help equally if several exclude your specialist or cover your medication poorly. Start with plans available at your address, then narrow the list around the care you actually use.

Read your plan's change notice first

Before sorting through alternatives, find your Annual Notice of Change. Plans send it each fall to explain changes taking effect in January.

Use it to identify what deserves attention: a higher deductible, a different copayment, or a coverage change. Then check the plan's detailed documents for anything unclear. Even if you're keeping the same plan, don't assume the costs and coverage are staying the same.

Compare Medicare Advantage costs beyond monthly premiums

Look beyond the monthly payment to the deductible, copayments, coinsurance, and annual out-of-pocket limit for covered medical services. Pay particular attention to services you use often. A higher specialist copayment matters more if you have appointments every month.

Make two rough comparisons: what you might spend during a typical year and what a year with more medical care could cost. A low premium may look less appealing alongside expensive specialist visits or hospital care.

Check the cost of each prescription

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

Check whether each medication is covered, what you'd pay, and whether coverage requires approval or trying another drug first. Include the exact dosage and how often you refill it. A comparison based on an outdated medication list isn't much use at the pharmacy counter.

Check your doctors and extra benefits

Check your doctors, specialists, and preferred hospital against the specific plan's network. Network rules differ: HMOs generally restrict routine care to network providers, while PPOs generally allow outside care at a higher cost.

For dental, vision, and hearing benefits, ask what services qualify, which providers participate, and what limits apply. "Dental included" doesn't tell you what a crown might cost. Compare benefits you expect to use, not just the length of the benefits list.

Bottom line

The projected premium decrease doesn't tell you whether your own coverage is getting cheaper. To avoid money mistakes, compare what you'd pay over the year for the care and prescriptions you need before choosing a plan.

If you're 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. Choosing different plans could make more sense than keeping everything with one insurer.

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