Medicare Advantage premiums projected to drop over 16% in 2027

The Centers for Medicare & Medicaid Services projects that average Medicare Advantage premiums will drop over 16% to $12.00 in 2027. However, this projection masks significant market turmoil. Facing severe margin pressures from high medical spending, major insurers like Humana and UnitedHealthcare are cutting thousands of plans and exiting numerous counties. To offset flat premiums, insurers are raising average maximum out-of-pocket limits by 10% and Part D deductibles by 30%, shifting more healthcare costs onto seniors.

Projected decreases in premiums

• ▪The CMS-projected 16% decrease in average Medicare Advantage premiums for 2027 is driven in part by lower premiums for special needs plans, which may underestimate premium changes for the general enrollment population
• ▪The Centers for Medicare & Medicaid Services projected that average prescription drug premiums in Medicare Advantage plans will decrease by 38% in 2027
• ▪The Centers for Medicare & Medicaid Services projected that the weighted average monthly premium across all Medicare Advantage plans will decrease over 16% from $14.37 in 2026 to $12.00 in 2027

Insurers increasing cost-sharing requirements

• ▪UnitedHealthcare increased its 2027 maximum out-of-pocket limit by 11% and its Part D deductible by 33%, while Humana increased its maximum out-of-pocket limit by 8% and its Part D deductible by 30%
• ▪While upfront premiums are declining, major insurers such as Humana and UnitedHealthcare are increasing cost sharing for 2027, raising the average maximum out-of-pocket limit by 10% and Part D deductibles by 30%
• ▪Clover Health increased its cost sharing the most among publicly traded peers for 2027, hiking its Part D deductible by 192% and its maximum out-of-pocket limit by 13%

Medicare Advantage benefit outlook

• ▪A survey from HealthScape Advisors found that nearly 70% of health plan leaders expect their overall Medicare Advantage benefit packages to be less rich in 2027, including higher specialist co-pays and reduced dental coverage
• ▪The Centers for Medicare & Medicaid Services stated that it expects Medicare Advantage supplemental benefits to remain stable in 2027

Insurers reducing Medicare Advantage offerings

• ▪Major health insurers pared back their individual Medicare Advantage plans for 2027, with Humana culling about 2,400 plans, UnitedHealthcare nixing about 690 plans, and Elevance reducing its offerings by about 150 plans
• ▪Health insurers are reducing traditional Medicare Advantage plans to focus on margin recovery after experiencing years of unexpectedly high medical spending
• ▪Major Medicare Advantage insurers are reducing their geographic footprints for 2027, with Centene exiting 344 counties, CVS exiting 103 counties, UnitedHealthcare exiting 63 counties, and Elevance exiting 56 counties
• ▪Insurers are balancing traditional Medicare Advantage cuts with growth in special needs plans, which generate higher per-enrollee margins and cover members with complex, long-term health issues

Disruption for plan members

• ▪Barclays estimated that Humana's 3,995 gross plan exits for 2027 will affect 942,000 members, representing 19% of its retail Medicare Advantage membership
• ▪Johns Hopkins research indicates that nearly 3 million seniors had to find new Medicare Advantage coverage for 2026 after losing access to their previous plans

CMS projections on plan access

• ▪The Centers for Medicare & Medicaid Services stated that approximately 8 in 10 Medicare Advantage seniors will be able to remain in their current plan with the same or a lower premium in 2027
• ▪The Centers for Medicare & Medicaid Services stated that more than 99% of Medicare beneficiaries will have access to at least one Medicare Advantage plan, and 97% will have access to 10 or more options in 2027

Medicare Advantage enrollment projections

• ▪Insurers said Medicare Advantage enrollment is projected to drop to 34 million people in 2027, down about 2 million from 2026, potentially representing less than half of the total Medicare population for the first time since 2023
• ▪The Centers for Medicare & Medicaid Services stated on September 29, 2026, that plan projections historically understate actual Medicare Advantage enrollment

Debatable claims

• ▪The projected 16% drop in Medicare Advantage premiums is a misleading indicator of senior savings
• ▪Health insurers are justified in cutting Medicare Advantage plans to recover profit margins
• ▪The 2027 Medicare Advantage market provides stable and affordable coverage for seniors