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Federal regulators have finalized the rules that will shape next year's Medicare Advantage and Part D drug plans, and a few of the general changes are worth knowing about now. Specific plans cannoty be discussed until marketing for 2027 plans begins October 1
There will be a simpler way to compare plan quality than in prior years. The star rating system that helps you judge one plan against another is being streamlined, so ratings should better reflect what matters to beneficiaries rather than administrative box-checking. Drug coverage is also moving: the annual cap on out-of-pocket prescription costs is rising from $2,100 this year to $2,400 in 2027 — once you hit that cap, you pay nothing more for covered drugs for the rest of the year. Also, drug plan deductibles will be permitted to increase from this year’s maximum of $615 to $700 next year.
(Note: some drug plans have no deductible, whereas others have deductibles for only some drug tiers, and some plans have deductibles which are less than the permitted maximum. The Annual Notice of Change (ANOC) document you receive in September will notify you of any changes in your drug coverage for next year.)
Beyond the rules coming out of Washington, it's worth watching what insurers themselves do with next year's plan designs. CMS ended up finalizing a noticeably bigger payment increase for 2027 than it first proposed, which gives plans some breathing room. But several major carriers have already said funding still isn't where they need it to be — so here's our projection of what we expect heading into the fall:
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HMOs: HMOs have been gaining ground over local PPOs for the past couple of years as insurers tighten networks to manage costs, and that trend will likely continue. PPOs currently make up a little over a third of Medicare Advantage enrollment, and we expect that share to shrink further.
(Note: you'll be notified by your carrier if they terminate your plan for 2027. If this happens, you'll have the opportunity to change to another available plan offered by any carrier, and you'll also be given a guaranteed issue right to change to a Medicare Supplement plan with no medical underwriting. We'll be in contact in early October with any clients we know are affected by a plan termination.)
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Part B premium "giveback" plans: These plans, where the carrier pays some or all your Part B premium, have been expanding — about a third of enrollees have access to one today, up from a fifth just a couple of years ago. This is one benefit we expect insurers to keep growing, since it's an easy way to stay competitive without adding cost elsewhere.
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Supplemental extras: Core benefits like dental, vision, and hearing have stayed stable and should remain widely available. The "nice to have" extras — over-the-counter allowances, meal delivery, transportation, and flex cards — are the most likely to keep shrinking. Insurers have said outright that more trimming is coming in 2027 as they work to hit profit targets.
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Plan availability: We expect some smaller or regional carriers to exit entirely from certain counties or states or even to leave the market entirely. It's worth confirming that your plan, or one you're considering, will still be offered where you live once the 2027 lineup is announced.
None of this changes your current plan today. But insurers will start publishing their actual 2027 plans and pricing this fall, and it's a good reminder not to assume next year's plan will look like this year's. When those details drop, it's worth a quick review together rather than letting your coverage auto-renew on autopilot or for you to lose coverage because your plan has left the market without you taking action to change to another plan.
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