CMS Projects 16.5% Drop in 2027 Medicare Advantage Premiums

Weighted average monthly Medicare Advantage (MA) premiums are projected to fall 16.5% in 2027, while average premiums for stand-alone Part D prescription drug plans (PDPs) are expected to rise by less than $1 per month, according to 2027 plan data released by CMS.¹

The figures, released ahead of Medicare open enrollment (October 15-December 7, 2026), also reflect the planned end of the Part D Premium Stabilization Demonstration, a temporary subsidy for stand-alone drug plans that CMS is discontinuing after 2026.

“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,” said CMS Administrator Mehmet Oz, MD, in a statement. “By slashing handouts to big insurance companies, CMS is keeping premiums stable while ensuring that 97% of Medicare beneficiaries have access to 10 or more MA plans and that 93% of non–low-income beneficiaries can get an enhanced Part D plan for less than $6 a month. We urge beneficiaries to use open enrollment as an opportunity to review their coverage, compare options, and pick the plan that best suits their needs and budget.”

MA Premiums Fall to $12 as Plan Count Holds Near 5500

The weighted average monthly premium across all MA plans, including those with drug coverage and Special Needs Plans, is projected to decline from $14.37 in 2026 to $12.00 in 2027. CMS expects supplemental benefits such as hearing, dental, and vision coverage to remain stable.

MA enrollment is estimated at 34 million in 2027, or about 47.4% of all Medicare enrollees, based on plan projections, which CMS said have historically understated actual enrollment. Further, more than 99% of beneficiaries will have access to at least 1 MA plan. The number of MA plans nationally is projected to dip from 5553 to approximately 5532, and roughly 8 in 10 MA enrollees will be able to keep their current plan at the same or a lower premium.

Stand-Alone Part D Premiums Edge Up Less Than $1 as Demonstration Ends

The average total monthly PDP premium is projected to increase from $35.09 in 2026 to $36.00 in 2027. Among beneficiaries who don't receive the Part D Low-Income Subsidy, 88% will have access to a basic plan costing $10.30 or less per month and 93% to an enhanced plan for less than $6, CMS said. For MA plans with drug coverage (MA-PDs), the average monthly Part D premium after MA rebates is projected to fall 38%, from $11.32 to $7.00.

CMS characterized the results as a return to normal market conditions and pushed back on what it called speculation and misleading reports about the demonstration's end. The voluntary demonstration was established in 2024 to steady PDP premiums as the Inflation Reduction Act's Part D redesign capped enrollees' out-of-pocket costs and shifted more liability to plan sponsors, according to an analysis from KFF.² In 2025, it cut the base beneficiary premium by $15 and limited year-over-year premium increases to $35. In 2026, those parameters were scaled back to a $10 reduction and a $50 cap. The subsidies cost $9.8 billion over the 2 years, and CMS had originally said the program could last at least 3 years.

Because the CMS figures are averages, they don't show how premiums will change for individual plans. KFF noted before the release that without the subsidies, some PDP enrollees could face larger increases in 2027 than in recent years and that cost pressures from rising drug prices and growing use of glucagon-like peptide-1 receptor agonists and other specialty drugs are likely to continue.

The premium gap between the 2 types of drug coverage also remains wide. The projected $36 average stand-alone premium is roughly 5 times the $7 MA-PD average, a gap KFF attributes in part to MA-PD sponsors' ability to use rebates to buy down drug coverage premiums. CMS is urging beneficiaries to compare 2027 options during open enrollment and has posted plan landscape files and state-by-state fact sheets to support those comparisons.

References

1. Medicare Advantage and Medicare prescription drug programs expected to remain stable in 2027. News release. CMS. September 28, 2026. Accessed September 30, 2026. https://www.cms.gov/newsroom/press-releases/medicare-advantage-medicare-prescription-drug-programs-expected-remain-stable-2027
2. Cubanski J. CMS's decision to end temporary subsidies to Medicare's stand-alone drug plans could mean larger premium increases for some beneficiaries next year. KFF. July 29, 2026. Accessed September 30, 2026. https://www.kff.org/quick-insights/cmss-decision-to-end-temporary-subsidies-to-medicares-stand-alone-drug-plans-could-mean-larger-premium-increases-for-some-beneficiaries-next-year/