The CMS headline is stability. The details say another tough year for members and plans.
The Centers for Medicare and Medicaid Services (CMS) wants you to see Medicare Advantage (MA) in 2027 as a story of lower premiums and steady choice. In its Sept. 28 release, CMS projected that the weighted average monthly MA premium would fall from $14.37 to $12, a 16.5% drop, and that the average Part D premium inside MA drug plans would fall 38%, from $11.32 to $7.
The industry tells a different story. Once you open the landscape and crosswalk files, I think the industry has it right.
Stability on top, churn underneath
The total number of MA plans barely moves, from 5,553 in 2026 to 5,532 in 2027. But that net number hides a lot of adds and cuts. The average beneficiary will have 28 MA-PD options, down from 32. MA-PD products will fall 8%. I looked at various predictions and performed my own analysis. I have seen estimates of impacts so far from 2M to 4.6M enrollees. Everyone does it slightly differently. I think at least 3.2 million people will have to select new coverage after their insurer terminates a plan. That is about 10% of enrollees. Another 2.1 million appear to have been moved to a plan that may or may not be to their liking. For perspective, estimates for 2026 ranged from 2.9 million to 4.6 million for those impacted by terminations of their plan. I think the low end of the 2026 estimate is about right — so the impact in 2027 will be as high as 2026.
I predicted that well over 1 million beneficiaries would face forced disruption in 2027, but not a repeat of 2026. I think the magnitude of the difference stunned some who watch MA, including me. It appears to be yet another signal that Big MA plan executives are indeed taking margin recovery seriously and perhaps further retrenchment than expected was a way for plans to hedge against continued headwinds related to escalating costs, rate uncertainty, a toughening risk adjustment world and likely poor performance in Stars quality.
Who is cutting and who is growing
Of the large plans, only Molina is fully exiting mainstream MA, and it will keep its Special Needs Plans (SNPs). Humana has the largest county footprint at 2,694, just ahead of UnitedHealthcare at 2,655. Yet every major plan is paring back in some counties while growing in others.
The biggest net reductions are HCSC at 498 plans, Centene at 344, UnitedHealthcare at 140 and Aetna at 123.
Humana’s exits alone will affect about 600,000 members. UnitedHealthcare’s exits will impact between 400K and 500K. CVS Aetna’s exits will impact about 300K. The big three — United, Humana, and CVS Aetna account for 45% of all disenfanchised members. In most cases, these plans had alternative plans the members were moved to.
The majority of impacted MA enrollees are in PPOs as plans continue to pullback on the more liberal benefit offering.
Where you are in America also dictates how impacted you are in terms of choice. Choice declines in 29 of 51 states and DC. Florida drops from 611 plans to 560, Ohio from 212 to 180 and Illinois from 157 to 136. Counties with no MA plan at all will jump from 67 to 181.
Premiums are only part of the story
That 16.5% drop laid out by CMS is a weighted average. The calculation includes lower premiums for SNPs, so it understates premium changes for the general enrollment population, which is the bulk of the program. Analyses of continuing general-market MA-PD plans find higher deductibles and out-of-pocket limits. Supplemental dental and Part B givebacks are noticeably smaller. And insurers are cutting $0 premium plans, which pushes premiums up by several dollars for many members.
On a side note, the standalone Part D (PDP) market shows a hidden hurt as well. CMS says the average standalone premium rises less than $1, from $35.09 to $36. Healthcare policy group KFF’s numbers are less reassuring. The average number of standalone PDPs falls from 11 to 9, the fourth straight annual decline. Healthcare policy group KFF notes that there will be no zero-premium PDPs for people without the low-income subsidy. That is stunning. About 4 million people who paid nothing in 2026 will pay something in 2027, whether they stay or switch.
While I was never a fan of the premium stabilization program, the further destabilization is because it has ended. The Democrats passed a political Part D cost-sharing reduction initiative as part of the misnamed Inflation Reduction Act (IRA) in 2022 and the PDP program is suffering for it. While all sorts of caps and limitations sound nice, the changes were not paid for, and everyone now is seeing impacts as the costs roll through the system.
SNPs get hit too
Despite years of investment, D-SNP offerings are shrinking, down about 3% in one analysis. Starting in 2027, CMS limits new D-SNP enrollment to people already in a Medicaid plan from the same carrier, where the D-SNP holds an overlapping state Medicaid contract. By 2030, all D-SNP members must be in an aligned plan.
Chronic Care SNPs are the escape valve. There is a net increase of 195 C-SNP plan benefit packages, with Devoted accounting for 133, or about 68%, of that growth. Devoted just closed a $1.2 billion financing deal, so it is clearly betting on this strategy. Expect CMS to eventually tighten C-SNP rules too.
Beyond benefit and plan cutbacks
The plans’ toolbox keeps growing. Beyond exits and benefit cuts, plans are making certain plans non-commissionable for new enrollment. CMS is also allowing prospective enrollment caps, though only a bit over a dozen plans have used them so far.
Plans are projecting a fall in enrollment. They did so last year as well. They were wrong as MA continues to look far more attractive than traditional Medicare. But growth was a tiny 2.5% or so. With this much retrenchment again, could growth really go negative? That now has me wondering.
Why this keeps happening
The causes are the same ones I have been writing about. Medical and pharmacy trends are running 7% to 8%. The 2.48% rate increase for 2027 doesn’t keep pace. The v28 risk model took more than 7% out of base rates, and extrapolated RADV audits are coming. Plans also expanded too far, too fast.
Star Ratings add to the pressure. Federal quality bonus spending reached $13.4 billion in 2026, yet only 68% of MA enrollees are in bonus-eligible plans, down from 75% and the lowest since 2018. Based on Plan Preview 2 cut points, average measure values, and average measure ratings, I think plans will collectively perform about the same if not fall.
The bottom line
I continue to view this as rationalization, not abandonment of MA. More than 99% of beneficiaries still have access to an MA plan, and 97% have at least 10 choices. MA remains popular, and the product still outperforms traditional Medicare.
But rationalization is painful for the people living through it. Millions will get a termination notice this fall, and many more will find leaner benefits in the plan they keep. My advice is simple. Don’t assume your plan is the same plan. Read the annual notice of change, compare options on Plan Finder, and check your doctors, drugs and out-of-pocket limits.
#medicareadvantage #enrollment
— Marc S. Ryan
