Medicare Advantage Plans Raise 2027 Costs After a Payment Boost

Medicare Advantage insurers are raising 2027 out-of-pocket costs and cutting dental money even as federal data show average plan premiums falling 16.5%. Open enrollment for those plans starts October 15.

The Centers for Medicare & Medicaid Services called the year stable on September 28. The same plan files, read by Wall Street analysts, show higher spending caps, thinner extras, and fewer broad doctor networks for people who actually use care.

A Cheaper Premium Comes With a Steeper Medical Bill

CMS said the weighted average monthly premium of $12 in 2027 is down from $14.37 in 2026. Drug premiums inside Medicare Advantage plans fall from $11.32 to $7 after rebates, a 38% drop. Stand-alone Part D premiums rise less than $1, from $35.09 to $36.

CMS Administrator Dr. Mehmet Oz said the agency is “fighting to keep high-quality care options affordable and accessible” and urged people to compare plans. The press release said hearing, dental, and vision extras “are expected to remain stable.” It also said about eight in 10 current Medicare Advantage members can stay in the same plan at the same premium or a lower one.

THE CMS HEADLINE NUMBERS

• Average MA premium: $14.37 in 2026 to $12.00 in 2027, down 16.5%.
• Plan count: 5,553 plans in 2026 to about 5,532 in 2027, a net drop of 21.
• Projected enrollment: 34 million people, or 47.4% of Medicare, a figure CMS said plans have historically understated.
• Choice: More than 99% of people with Medicare can get at least one Medicare Advantage plan, and 97% can get 10 or more.

Whit Mayo, an analyst at Leerink Partners who reviewed Medicare Plan Finder, found a different bill for people who need treatment. The average maximum out-of-pocket limit is up 10%, he wrote, and Part D deductibles are up 30%. That split is the whole product: a cheaper monthly number in the shop window, and more cost at the specialist, the dentist, and the pharmacy.

A HealthScape Advisors survey of leaders at 35 plans found that nearly 70% expect 2027 benefit packages to be less rich than 2026, including higher specialist copays and reduced dental coverage. The people who only check the premium line will not see that.

Washington Raised 2027 Payments in April

On April 6, CMS finalized a net average payment increase of 2.48% for Medicare Advantage, which it said meant over $13 billion in additional MA payments in 2027. The January proposal had been 0.09%. Insurer shares jumped after the revision.

The agency also kept the 2024 risk-adjustment model for 2027 instead of moving to newer data, after industry comments. It will still drop diagnoses from unlinked chart reviews, with an exception when a member switches plans. Chris Klomp, director of Medicare at the Department of Health and Human Services, said the rate notice “improves payment accuracy and strengthens competition based on quality, not on coding practices.”

KFF, the health-policy research group, said the delay of the model update was a large part of why final rates came in higher, and that average per-enrollee payments rise by nearly 5% once risk scores are counted. Insurers still went into the bid season talking about medical costs running hotter than the raise, and about investors who wanted fatter margins than 2025 and 2026 delivered.

THE PATH TO 2027 OPEN ENROLLMENT

1. April 6, 2026: CMS finalizes the 2.48% payment increase and holds the 2024 risk model for another year.
2. July 29, 2026: Humana tells investors it will exit plans covering about 600,000 members.
3. September 28, 2026: CMS releases 2027 plan data and says premiums fall while extras stay stable.
4. October 1, 2026: UnitedHealthcare, Humana, and rivals publish 2027 plan pitches built around $0 premiums and $0 primary care.
5. October 15, 2026: Open enrollment begins. It ends December 7, 2026.

Humana CEO Jim Rechtin had already told analysts the company would “adjust benefits” to stay on a path back to a sustainable margin of at least 3% by 2028. The spring raise bought time. It did not buy richer 2027 extras.

What UnitedHealthcare and Humana Cut for 2027

UnitedHealthcare and Humana cover almost 15 million Medicare Advantage members, more than 40% of the market, so their 2027 designs set the tone. Both companies spent October 1 talking about $0 primary care and extras Original Medicare does not offer. Mayo’s Plan Finder read showed where the money came out.

THE 2027 CUTS BY CARRIER

UnitedHealthcare still advertises $0 primary care visits in 2027, $0 preventive care, and $0 Tier 1 drug copays for all members. About 90% of Medicare-eligible people who can get a UnitedHealthcare Medicare Advantage plan will have a $0-premium option, the company said, and more than 94% of Medicare-eligible people nationwide will have access to some UnitedHealthcare Medicare plan. Bobby Hunter, president of UnitedHealthcare, said millions rely on the product “because it delivers unmatched value, quality and peace of mind.”

As those needs continue to evolve, our responsibility is not only to protect the benefits they have today, but also to help build a Medicare experience that is simpler, more connected and easier to navigate.

Bobby Hunter, president of UnitedHealthcare, October 1, 2026 newsroom statement

Humana, which kept richer 2026 extras and then had to explain the cost, took a different knife to 2027. It left primary-care copays alone and nudged dental allowances up a little. It cut or killed the Part B giveback, the check that offsets the federal outpatient premium, for 62% of members. That is a monthly hit for people who shopped last year for a plan that paid them back.

PPO Networks Shrink as Carriers Exit Counties

The other cut is the doctor list. UnitedHealthcare said it will leave markets where it now sells a higher share of preferred provider organization plans, which let members go out of network at a higher price. Sixty-six percent of its members will still have both an HMO and a PPO in 2027, down from 70%. The company said people in its HMOs spent more than $175 a year less out of pocket than people in its local PPOs, in markets that sold both.

Aetna said it is expanding HMO plans that steer care to a tighter, cheaper network. Humana will sell Medicare Advantage in about 2,600 counties across 45 states and Washington, D.C., more than 80% of U.S. counties, down from 85% in 2026. Humana is ending plans that cover about 600,000 members, a figure CFO Celeste Mellet gave on the July 29 earnings call, and it expects to recapture just over 40% of them into other Humana plans, as it did after 2025 exits.

Mayo’s plan-count read had UnitedHealthcare ending about 690 plans and Humana about 2,400, with Centene down about 3,000 unique plans. Nationally the CMS total barely moves, from 5,553 to 5,532, because special needs plans keep multiplying as regular plans disappear. Avalere Health counted non-SNP Medicare Advantage drug plans falling 5%, from 2,967 to 2,827, while SNPs rise 8%, from 1,701 to 1,834. Chronic-care SNPs jump 36%, to 744. Dual-eligible SNPs fall 7%, to 932.

A member whose PPO vanishes does not only lose a logo. They can lose a hospital, a specialist, and the extra dental dollars that came with the old contract, then land in an HMO that looks cheap until they need someone outside the panel.

Extra Benefits Helped Fill Half of Medicare

Those extras are why Medicare Advantage is no longer the side option. KFF found that 55% of eligible Medicare beneficiaries, 35.2 million out of 64.2 million people with both Part A and Part B, were in Medicare Advantage in 2026. CMS’s 2027 projection of 34 million and 47.4% uses a wider Medicare base and plan-submitted forecasts, which is why the two shares should not be stacked as a one-year collapse.

In 2026, KFF counted 98% of individual plan enrollees in dental coverage, more than 99% with vision, 95% with hearing, and 91% with a fitness benefit. The label stayed. The extras around it were already shrinking: over-the-counter allowances covered 68% of individual-plan enrollees, down from 79% in 2025, and meal benefits covered 65%, down from 70%. CMS can say dental, vision, and hearing remain common in 2027 because almost every plan still lists them. The dollar cap on a crown, and the specialist copay next to it, is what moved.

That is the bill for a decade of $0-premium marketing. Plans used leftover rebate dollars to buy dental, gym, grocery cards, and Part B givebacks, and enrollment followed. When medical costs ran hotter than bids, and when investors wanted the margin Humana now pins at 3% by 2028, those same extras became the easiest line to cut without abandoning the $0 premium that still wins the comparison chart.

Open Enrollment Runs From October 15 to December 7

The window to change 2027 coverage is October 15 through December 7. CMS said people who want to keep their current Medicare coverage generally do not need to re-enroll. That advice is safe only if the Annual Notice of Change matches the care they actually use. Eight in 10 members can keep a plan at the same premium or less. The trap is treating that as proof that dental money, the out-of-pocket cap, the drug deductible, and the hospital list also stayed put.

On the drug side, the defined standard Part D deductible ceiling moves from $615 to $700, and the annual out-of-pocket cap moves from $2,100 to $2,400, figures CMS set in the spring rate cycle. Those ceilings sit beside the medical cap; they do not offset it. CMS is also ending the Part D Premium Stabilization Demonstration after 2026, which it described as a return to “normal market conditions” without “billions of dollars in temporary subsidies to insurance companies.” Stand-alone drug plans already look pricier next to a $0 Medicare Advantage package. The package is just thinner once you leave the premium line.

WHAT TO CHECK BEFORE DECEMBER 7

• The out-of-pocket cap: A 10% average rise is large enough to matter in a year with a hospital stay, even if the premium fell a few dollars.
• Dental dollars: Confirm the annual allowance and whether major work is still covered, especially on UnitedHealthcare, Centene, CVS, and Elevance plans.
• The Part B giveback: Humana reduced or ended it for 62% of members; a $0 plan premium can hide a lost monthly offset.
• Doctors and hospitals: PPO pullbacks and county exits are how a familiar specialist leaves the card without a premium change.
• Drug deductibles: A 30% average jump, and a $700 legal ceiling, will show up at the pharmacy before it shows up on a premium chart.

Oz is still pushing people toward the comparison tool, and that is the one part of the federal message that matches the files.

We urge beneficiaries to use Open Enrollment as an opportunity to review their coverage, compare options, and pick the plan that best suits their needs and budget.

Dr. Mehmet Oz, CMS Administrator, September 28, 2026 CMS press release

The 2027 Medicare Advantage market will still sell a low monthly price, $0 primary care, and a dental line on the brochure. The people who need a crown, a specialist, or a hospital will meet the other 2027 plan, the one built after April’s raise to get margins back.

Disclaimer: This article is news reporting and analysis of federal plan data and company statements. It is informational only and is not medical, insurance, tax, or enrollment advice, and it is not a recommendation to join, leave, or stay in any Medicare Advantage, Part D, Medigap, or Original Medicare option. Readers should consult a licensed insurance agent, a State Health Insurance Assistance Program counselor, or 1-800-MEDICARE before changing coverage, because networks, extras, and costs vary by county and by plan. Figures and statuses reflect the public sources named above as of the dates in this article and can change.