While Medicare Advantage plans typically help Americans keep more cash in their
wallet while accessing the health care they need, valuable perks could be cut
from these plans in 2027. The Centers for Medicare & Medicaid Services (CMS)
finalized a 2.48% average payment increase to Medicare Advantage insurers for
2027, and insurers are signaling that the increase isn’t enough and that they
may have to cut perks from plans
Here’s what you should know if you or a loved one are enrolled in a Medicare
Advantage plan
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Why CMS’s 2027 payment increase matters
The 2027 Medicare Advantage increase for insurers adds more than $13 billion in
federal spending for the plans. When risk score trends due to factors like
population changes are accounted for, it equates to a 4.98% increase. On
average, payments to insurers who manage Medicare Advantage plans should
increase by an average of 2.48% in 2027
Insurance executives have already spoken out and warned that the rates are not
high enough to keep up with rising medical costs
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Which Medicare Advantage perks could disappear?
The extra perks that distinguish Medicare Advantage plans from traditional
Medicare plans may be most at risk of cuts. As 2027 Medicare Advantage plans are
finalized, plans may feature higher annual caps and fewer plans may offer
comprehensive dental coverage. Some plans might eliminate coverage of routine
eye exams or hearing aids, and others might reduce their transportation and
in-home support offerings
The exact changes may vary depending on the competition in each plan’s market.
Where plans face steep competition, they might still offer some of these popular
benefits. However, those benefits might feature more restrictive usage limits or
higher copays
What major insurers are saying
Humana, the second-largest Medicare Advantage insurer, has announced plans for
large-scale cutbacks because the 2027 rate falls short of health care cost
increases. While Humana’s exact cuts aren’t yet finalized, they might include
cuts to gym and fitness memberships, enhanced dental and vision coverage, meal
delivery and grocery allowance benefits, and more
Humana and other major insurers, like UnitedHealthcare and CVS Health’s Aetna,
may choose to cut benefits or could even choose to stop offering coverage to
certain regions or states in an effort to save money. Medicare Advantage
enrollees might be left with fewer plan options and might have to choose from
plans that offer reduced coverage
The cuts are not finalized, but several insurers have indicated benefit reductions are possible if current payment rates remain unchanged. Actual changes won’t be identified until the plans
publish their Annual Notice of Change documents this fall
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Why Medicare Advantage plan cuts matter
Medicare Advantage plan cuts have the potential to impact millions of Americans.
According to KFF data, Medicare Advantage enrollment has increased over the past
20 years. Since 2023, more than half of beneficiaries have been enrolled in
Medicare Advantage plans
However, KFF data also indicates that there’s already been a decrease in the
perks that make Medicare Advantage plans attractive options. From 2025 to 2026,
the share of plans that offered perks like over-the-counter benefits, meal
benefits, remote access technologies, transportation benefits, and bathroom
safety devices declined
Medicare Advantage plans are also highly concentrated among a small number of
insurance providers, with United Health Group being the largest, and Humana
being another major supplier. Since Humana has already expressed plans to cut
perks, if other major insurers follow suit, the effect of reduced perks could be
widespread and might impact the majority of Medicare Advantage plans
How to prepare during Medicare open enrollment
With potential changes coming to Medicare Advantage plans, it’s important to
stay informed about your current plan’s coverage. Be sure to read your Annual Notice of Change, which arrives in September; this notice spells out exactly what your plan is dropping or altering for the coming year. It may help you to
determine whether the plan still meets your needs, or whether it’s time to shop
for a new plan
Use the fall Medicare Advantage open enrollment window from Oct. 15 to
Dec. 7 to compare plans or to consider whether it makes sense to switch. You
may make changes to your coverage each year during this period, and any changes
you make go into effect on Jan. 1 of the next year
Bottom line
To get the maximum value out of your Medicare Advantage plan, consider which
perks you actually use and make sure the plan offers them in 2027. Confirm that
your doctors and medications stay covered, and don’t assume that your 2027 plan mirrors this year’s. It’s always a good idea to compare plans annually anyway,
but potential coverage changes make shopping around even more important this
fall
Add the open enrollment dates to your calendar now to ensure you don’t miss out.
Knowing you’ve thoroughly researched the plans and chosen the right Medicare
Advantage plan for you may help eliminate some money
stress in 2027
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Author Details
Paige Cerulli
Paige Cerulli has covered personal finance for more than 15 years and writes about the money news readers can actually act on. In particular, she helps people claim what they are owed from class-action settlements, understand Social Security COLA changes and Federal Reserve rate moves, and make the most of everyday decisions around insurance, mortgages, and credit cards. Her work has appeared in U.S. News & World Report and Kiplinger.
