CMS Says Medicare Advantage Premiums Are Expected to Drop 16.5% in 2027 — Check What Your Plan Will Cost

A 16.5% drop in Medicare Advantage premiums sounds like welcome news for retirees watching every dollar, but don’t start adjusting your 2027 budget based on that number just yet. The Centers for Medicare & Medicaid Services projects that the average monthly 2027 Medicare Advantage premium will fall from $14.37 in 2026 to $12 in 2027. That’s a $2.37 monthly decline, or about $28.44 over a full year, based on the national weighted average. Your own premium could fall more, remain unchanged, or even increase because Medicare Advantage costs vary by plan and location. With Medicare Open Enrollment beginning Oct. 15, now is the time to find your actual 2027 number rather than assuming the national average applies to you.

The Average Medicare Advantage Premium Is Falling to $12

CMS projects the weighted average monthly premium across Medicare Advantage plans, including plans with prescription drug coverage and Special Needs Plans, will decline 16.5% in 2027. In dollar terms, the average is expected to move from $14.37 this year to $12 next year, which makes the percentage decline sound considerably more dramatic than the monthly savings. CMS estimates approximately 34 million people will enroll in Medicare Advantage in 2027, representing about 47.4% of the total Medicare population. The agency also says supplemental offerings such as dental, hearing and vision benefits are expected to remain stable overall. Those national numbers are encouraging, but they don’t tell an individual beneficiary what a particular 2027 Medicare Advantage premium or benefit package will look like.

Eight in 10 Enrollees May Keep the Same or Lower Premium

There’s more useful information for current Medicare Advantage members than the national average alone. CMS estimates that approximately eight in 10 Medicare Advantage beneficiaries will be able to remain in their current plan with the same or a lower premium in 2027. That also means the other roughly two in 10 shouldn’t assume their current arrangement will remain unchanged. Nationwide, the number of available Medicare Advantage plans is projected to slip only slightly, from 5,553 in 2026 to approximately 5,532 in 2027. More than 99% of Medicare beneficiaries are expected to have access to at least one Medicare Advantage plan, while 97% should have 10 or more choices.

Your $12 Premium Doesn’t Include Every Medicare Cost

The $12 figure can be misleading if someone interprets it as the total monthly cost of having Medicare. Medicare Advantage members generally must continue paying their Medicare Part B premium in addition to any premium charged by the private Medicare Advantage plan. Depending on the plan and the care someone uses, there can also be deductibles, copayments, coinsurance, and other out-of-pocket expenses. A zero-premium Medicare Advantage plan therefore isn’t the same thing as zero-cost health care, just as a $12 plan doesn’t mean someone’s entire Medicare bill is $12. When comparing a 2027 Medicare Advantage premium, look at the total expected cost of coverage rather than stopping at the number printed beside “monthly premium.”

A Cheaper Premium Can Still Cost You More Overall

Imagine you’re choosing between one Medicare Advantage plan charging $0 per month and another charging $35, making the first plan look like the obvious way to save $420 a year. Now suppose the $0 plan charges considerably more when you see specialists or requires you to use pharmacies where your regular prescriptions cost more. Someone managing diabetes, heart disease or another chronic condition could easily spend more than that $420 premium difference through higher medical or prescription costs. Provider networks matter financially too because discovering that a preferred physician or hospital is no longer in-network can affect both continuity of care and what you pay. That’s why comparing total annual costs is considerably more useful than simply hunting for the lowest 2027 Medicare Advantage premium.

Prescription Drug Costs Deserve a Separate Look

CMS also released encouraging numbers for Medicare Advantage plans that include Part D prescription coverage, commonly called MA-PD plans. After Medicare Advantage rebates are applied, CMS projects the average monthly Part D portion of those premiums will decline from $11.32 in 2026 to $7 in 2027, a 38% decrease. That’s different from stand-alone Part D plans, where the average total monthly premium is projected to rise slightly from $35.09 to $36. Your actual medication costs still depend on whether your prescriptions remain on the plan’s formulary, what tier they’re assigned to, and which pharmacies you use. Someone taking several expensive prescriptions should therefore enter their actual drugs when comparing plans rather than assuming a lower average Part D premium guarantees lower pharmacy spending.

Your Annual Notice of Change Deserves More Than a Glance

If you’re already enrolled in Medicare Advantage, one of the most important documents you’ll receive is your plan’s Annual Notice of Change, or ANOC. CMS recommends reviewing that notice because Medicare health and drug plans can change costs, coverage, provider networks, and pharmacy arrangements from one year to the next. Compare the 2027 premium with what you’re paying now, but also look for changes involving deductibles, copayments, drug coverage, and benefits you regularly use. A $5 monthly premium reduction saves $60 annually, but that savings disappears quickly if another plan change adds $20 to a prescription you fill every month. Treat the ANOC like a financial document rather than another piece of insurance mail.

Medicare’s Plan Finder Can Show Your Actual Options

You don’t have to rely on advertisements or national averages to see what’s available where you live. Medicare’s official Plan Finder now allows beneficiaries to review 2027 health and drug plan options based on their ZIP code. Signing into a Medicare account can make comparisons more useful because beneficiaries can use saved medications and pharmacies when estimating plan costs. CMS says users can also save providers and access information about premiums, benefits, and other coverage details while comparing plans. Before changing coverage, confirm doctors, hospitals, pharmacies, and important medications directly because those details can matter considerably more to your annual budget than a few dollars of premium savings.

Open Enrollment Runs From Oct. 15 Through Dec. 7

Medicare Open Enrollment begins Oct. 15, 2026, and ends Dec. 7, 2026, with coverage selections generally taking effect Jan. 1. During that period, beneficiaries can compare Medicare health and prescription drug options for 2027 and make eligible coverage changes. People who are happy with their current coverage generally don’t have to re-enroll if the plan remains available, but doing nothing without checking the changes can be an expensive mistake. CMS specifically encourages beneficiaries to compare coverage because plan costs and benefits can change each year. Free assistance is also available through 1-800-MEDICARE if comparing the 2027 Medicare Advantage premium, drug coverage, and other costs becomes overwhelming.

Don’t Let 16.5% Make the Decision for You

A projected 16.5% decline in average Medicare Advantage premiums is positive news, but the dollar savings behind that national figure averages only about $2.37 per month. The more important number is what your particular plan will charge in 2027 and whether its medical, prescription and supplemental benefits still match the services you actually use. Pull out your Annual Notice of Change, make a list of your doctors and medications, and compare those details with competing plans during Open Enrollment. Someone who spends an hour finding a plan that saves $75 a month across prescriptions and medical copays could potentially save far more than someone who chooses solely because of a $5 premium difference. Your 2027 Medicare Advantage premium matters, but what ultimately matters to your retirement budget is the total amount that leaves your pocket for health care.

Is your Medicare Advantage premium going down for 2027, or have you found other changes to your plan that could actually make your health care more expensive?

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Amanda Blankenship

Amanda Blankenship is Chief Editor at District Media, Inc., leading content strategy, quality assurance, and editorial operations across high-traffic personal finance sites like SavingAdvice.com and CleverDude.com. A Wingate University graduate with a BA in Communications (Journalism focus), she brings over a decade of experience in digital publishing, writing, and team leadership in the personal finance space.