More than 3 million Medicare Advantage enrollees need to find new plans for 2027 in third year of turmoil

By Tami Luhby, CNN

(CNN) — Fewer health insurance plans. Higher out-of-pocket costs. Skimpier supplemental benefits.

This upheaval is what senior citizens will have to contend with when Medicare Advantage open enrollment for 2027 coverage begins on Thursday. That’s why it’s even more important that enrollees review their plan options so they aren’t hit with unexpected bills and other surprises next year, experts say.

Medicare Advantage, which covers just over half of Medicare’s roughly 71 million enrollees, is going through its third year of turmoil as health insurers overhaul their offerings. The changes are largely being spurred by medical costs outpacing reimbursements from the federal government, which pays insurers to provide coverage to Medicare enrollees – though critics say that insurers are overbilling for patient care.

Millions of senior citizens and other enrollees will have to find new Medicare Advantage plans because their policies are being terminated, while others could have to pay more for their coverage and care.

The disruption also comes as Americans prepare to vote in the midterm elections, where the rising cost of healthcare and other necessities is a key concern. Senior citizens are a reliable voting bloc that both parties are trying to woo. President Donald Trump announced this month that he is sending a $90 payment to about 20 million senior citizens to help them cover part of their Medicare premiums – but those enrolled in Medicare Advantage plans aren’t eligible.

Medicare Advantage plans had grown rapidly in popularity as insurers expanded their offerings and benefits to lure the growing senior population. They are often more attractive than traditional Medicare to budget-conscious older Americans because they have limits on out-of-pocket spending and provide some supplemental benefits, such as dental, vision and hearing coverage. However, they typically have more limited doctor networks than traditional Medicare, and certain treatments can be subject to prior authorization.

But in recent years, insurers have been discontinuing their less profitable Medicare Advantage plans and seeking to stabilize their offerings, even if it means fewer policyholders. Insurers estimate that enrollment will drop to 34 million people, or 47.4% of total Medicare enrollment in 2027, though the Centers for Medicare and Medicare Services expects actual enrollment to be higher than projections and is stressing stability in the Medicare Advantage market. Open enrollment ends on December 7.

“CMS is fighting to keep high-quality care options affordable and accessible for the millions of beneficiaries who rely on Medicare Advantage and Part D prescription drug plans,” CMS Administrator Dr. Mehmet Oz said in a statement.

Terminating coverage

Nearly 3.2 million Medicare Advantage enrollees, or almost 11%, will have to shop for new policies for 2027 because their insurers are no longer offering their plans, said Jared Strock, founder of Medicare Market Insights, a weekly newsletter for the Medicare industry leaders. That compares with about 2.9 million and 2 million enrollees whose plans were terminated for this year and for 2025, respectively. Prior to that, only 1% to 2% of enrollees typically lost their plans year to year.

Major insurers, including Humana, UnitedHealthcare, CVS’ Aetna and several Blue Cross and Blue Shield carriers, are among those culling their offerings or pulling out of geographic areas, according to Strock, who reviewed CMS data. Many of the plans being canceled are preferred provider organization, or PPO, policies, which give patients more flexibility and include out-of-network coverage.

To be sure, most enrollees will still have a choice of multiple policies. The average beneficiary will have 28 Medicare Advantage plans with prescription drug coverage to select from, although that’s down from a high of 36 plans in 2024, according to KFF, a nonpartisan health policy research group.

Still, a small but growing share of older Americans will not have any of these plans in their area. Some 638,000 people in 193 counties will be in this situation for 2027, up from 399,000 people in 123 counties this year, according to KFF.

The number of plans offered varies widely by state and county, said Haitham Aly, a principal at Oliver Wyman, a consulting firm. Rural residents are more likely to see insurers pull out, but those living in the Southeast typically have a wider array of choices.

“It’s very regionally driven,” he said. “There are some states where there’s minimal disruption as far as plan offerings to consumers. There are other states where there are a lot more drastic changes happening.”

Overall, there will be 5,532 Medicare Advantage plans next year, decreasing by only 21, according to CMS. But that figure includes so-called special needs plans that cater to specific categories of enrollees. Insurers are expanding their selection of policies for those with chronic conditions – particularly certain heart and lung diseases and diabetes. One incentive to do so is that they receive higher federal reimbursements for sicker enrollees.

Some 744 chronic condition plans are available for next year, up from 376 in 2025, according to Strock. Enrollment in those types of plans has skyrocketed to more than 1.8 million, up from about 401,000 in the fall of 2021.

Insurers are also expected to trim the generosity of their supplemental benefits, though CMS has yet to release its overview of these offerings for 2027, experts said. Enrollees may find that their dental and hearing benefits don’t cover as much care as they have in the past, their medical transportation benefits are curtailed or their allowances for over-the-counter products are reduced.

Uptick in costs

Many enrollees whose plans are not being terminated could see their costs increase for 2027, which is why they need to review their options. Insurers are trying to return to or boost the profitability of their policies as they contend with higher prices and greater healthcare usage among patients.

Average monthly premiums, weighted for enrollment, will dip 7% to $12.11 overall, but much will depend on what type of Medicare Advantage policy an enrollee has, Strock said. The plans that don’t cater to people with chronic conditions or other special needs will see their premiums jump 23% to $14.80 a month. Just over 1 in 5 people with non-special needs coverage will be hit with a premium increase.

The plans for those with chronic conditions, on the other hand, will be less expensive.

Meanwhile, insurers are also raising the out-of-pocket limits that enrollees will face, leaving them on the hook for more of the cost of care. On average, the enrollment-weighted maximum for in-network services will be $6,603, up 9% from this year, Strock said. Some 70% of enrollees will see their out-of-pocket cap increase, compared with 35% for this year.

And nearly three-quarters of enrollees will have to pay more for prescription medications, with the average enrollment-weighted deductible jumping 23% to $509 for plans with drug coverage. Only 12% of enrollees are expected to be in plans with no deductible, down from 60% in 2024.

“Better funding brought Medicare Advantage premiums down for 2027, but a record number of seniors will have to find new coverage, and many will pay more when they need care,” Mary Beth Donahue, CEO of the Better Medicare Alliance, a coalition of insurers, providers, business groups and community organizations that advocates for Medicare Advantage, said in a statement to CNN. “Seniors shouldn’t have to face this disruption every year.”

Standalone drug coverage

Those in traditional Medicare who buy standalone Part D drug policies from insurers will also see some changes for 2027.

More than 1 million people are losing their Part D plans and will have to pick new options, said Brooks Conway, principal at Oliver Wyman. CVS’ Aetna is leaving the market, which is dominated by Humana and Centene.

No plans with $0 premiums will be available, though almost every state will have policies with monthly premiums of less than $20, he said. Part of the reason is that Trump discontinued a Biden-era subsidy for insurers aimed at stabilizing their costs after the Democrats’ Inflation Reduction Act in 2022 left carriers on the hook for more of the drug spending by sicker enrollees.

While CMS is highlighting that the average Part D monthly premium will increase less than $1 to $36 for next year, some insurers are hiking premiums by more than $50 a month. So enrollees should check the cost of their plans for 2027.

“Those people won’t be technically forced to shop, but if they do shop, they’ll have significant premium reductions,” Conway said.

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