Proposed changes to MA and Part D would harm seniors’ coverage in 2027

More than 35 million seniors and people living with disabilities, including individuals with disproportionately lower-income and clinically complex needs, choose Medicare Advantage  for better coordinated care, preventive services and wrap-around supports—all at lower cost. Another 57 million Americans rely on Medicare Part D for affordable prescription drug coverage.

The Centers for Medicare & Medicaid Services (CMS) recently proposed a 0.09% funding increase for the MA program in 2027—virtually flat funding—along with important changes to MA risk adjustment and Medicare Part D payment policies. Without adequate funding for MA that keeps pace with sharply rising medical costs and high utilization of medical services, beneficiaries could see reduced benefits, fewer plan options or higher costs when they renew coverage in October 2026.

Importantly, the effects of flat funding in 2027 would not occur in isolation. They would compound existing instability in MA stemming from consecutive prior years of funding that has not kept pace with higher medical costs and utilization. A new study found that 2.9 million enrollees incurred “forced disenrollments” in 2026 due to plan terminations in their areas and average MA premiums have risen 24%. In the last several years, the number of beneficiaries covered by MA general enrollment plans has dropped and the number of plans available to consumers has declined due to policies enacted in prior years.

As policymakers look for ways to help address the affordability crisis, MA remains a powerful tool for helping to protect Americans from the rising cost of medical care. Ensuring funding keeps pace with underlying costs is critical to preserving affordability, access and choice for the millions of Americans who rely on this vital part of the Medicare program.

Two new reports commissioned by AHIP and conducted by Wakely Consulting Group detail how these proposed changes could affect millions of beneficiaries in 2027 if finalized. These impacts would include:

• A 15% reduction in the rebate dollars that MA plans use to lower premiums and out-of-pocket costs and to offer supplemental benefits;
• A reduction in benefits – including a potential reduction of coverage for benefits such as dental and vision by 50%, increasing the out-of-pocket maximum by $1,000 and reducing other supplemental benefits by 50%; and
• An increase of $23/month in premiums, equivalent to an annual increase of more than $550 for the typical senior couple. 

Uneven impacts across communities

• Approximately 70% of MA beneficiaries live in counties projected to experience payment cuts under the proposed changes.
  • Rural communities are likely to face larger reductions, compounding long-standing access and affordability challenges while geographic rate differences may deepen existing disparities across certain populations.
  • States facing some of the largest projected reductions include North Dakota, Alabama, Oklahoma, Kansas, and West Virginia.