Premiums Are Down in 2027. That’s Not the Whole Story for Medicare Advantage.
Medicare Advantage premiums are falling in 2027, and that’s good news for seniors. But a lower premium isn’t the same as lower costs or more choices. Out-of-pocket limits are climbing, plans are leaving markets, and rural seniors are losing options.
That’s the picture from new CMS data and an Avalere Health analysis prepared for Better Medicare Alliance, released as seniors and people with disabilities prepare for the Annual Enrollment Period beginning October 15.
2027 At A Glance
- Average monthly premium, weighted by enrollment (CMS projection): down from $14.37 to $12.00
- Median out-of-pocket limit (general-enrollment plans): up $700, to $6,600
- Total plans: down to 4,993, the third straight annual decline
- Plans available to most beneficiaries: 170 fewer
- States losing plans: 26, plus D.C.
Better Funding Brought Premiums Down
Earlier this year, CMS finalized a stronger 2027 payment update than it first proposed. It wasn’t full funding, but it made a difference. Seventy-two percent of plans will charge a $0 premium next year, and most beneficiaries will still have at least one $0-premium option.
Look closer, though. Most of the $0-premium growth comes from special needs plans (SNPs), which are limited to people with certain chronic conditions or low income. $0-premium SNPs will more than double. Meanwhile, $0-premium plans available to most beneficiaries will shrink, from 2,340 to 2,236. For plans that do charge a premium, the average will rise by about $11 a month, to $57.68.
Out-of-Pocket Costs Keep Climbing
The maximum out-of-pocket limit is the most a beneficiary can pay out of pocket in a year for covered medical services, not including prescription drugs. For general-enrollment plans, the national median will reach $6,600 in 2027. That’s up 32% since 2024, from $5,000 — and it’s rising in 48 states and D.C.
Not everyone will hit that limit. But for seniors with serious health needs living on fixed incomes, it’s the number that matters most.
Millions May Need to Switch Plans
In 2026, nearly 3 million beneficiaries had to choose new coverage because their plan left the market or closed. The trend is likely to continue in 2027. There are 212 fewer plans than in 2024, and the biggest losses in 2027 are in Florida (−48), Ohio (−24), Illinois (−20), and Maryland (−17).
SNP growth makes the decline look smaller than it is. There will be 133 more SNPs but 170 fewer plans available to most beneficiaries, so for most seniors this is a net loss. Every plan exit means comparing new options, checking whether doctors are in network, and adjusting to new costs.
Rural Seniors Are Losing Scarce Options
States that already had few options are losing a large share of them:
- Wyoming: 12 plans to 8 (−33%)
- Montana: 28 plans to 19 (−32%)
- North Dakota: 21 plans to 17 (−19%)
For rural seniors, losing a plan can mean losing affordable coverage, not just a choice.
Why This Is Happening
Three pressures are converging:
- Funding hasn’t kept pace with the program’s needs for several years.
- Medical costs and use of care are rising.
- V28, CMS’s revised risk adjustment model, is now fully in effect.
With less room to make the math work, plans are leaving markets and raising out-of-pocket costs, and many are expected to trim benefits. Seniors absorb every one of those choices.
What Policymakers Can Do
More than 35 million seniors and people with disabilities choose Medicare Advantage. Better Medicare Alliance’s 10-point Policy Roadmap lays out reforms to risk adjustment, prior authorization, Star Ratings, and more, designed to strengthen the program without shifting costs onto seniors.
Lower premiums in 2027 show what better funding can do, but a gap remains. The right policies can help close it and protect what seniors count on: affordable care, strong benefits, and real choices in every community. Better Medicare Alliance is ready to work with policymakers to get there.
Source: Avalere Health analysis of the 2027 CMS Medicare Advantage Landscape Files, prepared for Better Medicare Alliance, October 2026. The analysis excludes MSA, PFFS, Employer Group Waiver, PACE, Cost, and demonstration plans. Weighted average premium projection from CMS.