CMS Forecasts 16.5% Decrease in 2027 Medicare Advantage Premiums

Projected Drop in MA Plan Premiums and Increase in PDP Premiums for 2027

According to the CMS, the 2027 projected average monthly premium for all Medicare Advantage (MA) plans, which includes those with drug coverage and Special Needs Plans, is expected to decrease from $14.37 in 2026 to $12.00. Supplemental benefits, such as hearing, dental, and vision coverage, are anticipated to remain consistent.

Medicare Advantage Enrollment and Availability for 2027

MA enrollment is predicted to reach 34 million by 2027, accounting for about 47.4% of all Medicare enrollees. This estimation is based on plan projections, which CMS noted have usually been lower than the actual enrollment. Furthermore, over 99% of beneficiaries will have access to at least one MA plan. Despite the slight drop in the total number of MA plans from 5553 to approximately 5532, around 80% of MA enrollees can retain their existing plan at the same or a reduced premium.

Notable Changes in Part D Premiums

For 2027, the average total monthly premium for Prescription Drug Plans (PDPs) is expected to rise from $35.09 in 2026 to $36.00. Regarding MA plans with drug coverage (MA-PDs), the average monthly Part D premium post-MA rebates is expected to drop by 38%, from $11.32 to $7.00. Among beneficiaries who don’t qualify for the Part D Low-Income Subsidy, 88% will have access to a basic plan costing $10.30 or less per month and 93% to an upgraded plan for less than $6, as per CMS.

Impact of the Demonstration’s Conclusion on Stand-Alone Part D Premiums

CMS described the outcome as a return to typical market conditions and dismissed any misleading reports about the conclusion of the demonstration. Established in 2024, the voluntary demonstration aimed to stabilise PDP premiums as the Inflation Reduction Act’s Part D redesign capped enrollees’ out-of-pocket costs and transferred more responsibility to plan sponsors, as stated in a KFF analysis. Over the span of two years, the subsidies cost $9.8 billion, and CMS had initially stated the program could last at least three years.

Effects on Individual Premiums and Drug Coverage

As CMS figures are averages, they don’t reveal how premiums will change for individual plans. KFF indicated before the release that without the subsidies, some PDP enrollees might face larger increases in 2027 than in recent years. Pressure from rising drug prices and the growing use of specialty drugs, such as glucagon-like peptide-1 receptor agonists, is likely to continue. The projected $36 average stand-alone premium is approximately five times the $7 MA-PD average, a difference partly attributed by KFF to MA-PD sponsors’ ability to use rebates to deflate drug coverage premiums. CMS encourages beneficiaries to compare 2027 options during open enrollment and has provided plan landscape files and state-by-state fact sheets to aid these comparisons.

References

1. Medicare Advantage and Medicare prescription drug programs expected to remain stable in 2027. News release. CMS. September 28, 2026. Accessed September 30, 2026.
2. Cubanski J. CMS’s decision to end temporary subsidies to Medicare’s stand-alone drug plans could mean larger premium increases for some beneficiaries next year. KFF. July 29, 2026. Accessed September 30, 2026.