Medicare beneficiaries are getting some encouraging news heading into the 2027 Annual Election Period.

According to a September 28 report from the Centers for Medicare & Medicaid Services (CMS) is projecting a 16.5% decrease in average Medicare Advantage premiums for 2027.

The weighted average monthly premium is expected to fall from $14.37 in 2026 to $12 in 2027. CMS is also projecting a 38% decrease in the average prescription drug premium for Medicare Advantage plans that include drug coverage.

That's certainly welcome news, particularly after several years of uncertainty surrounding Medicare Advantage funding, carrier profitability and changes to supplemental benefits.

But before beneficiaries start celebrating, there are a few things worth understanding.

What CMS Is Projecting for 2027

The agency's announcement provides a more encouraging picture of the Medicare Advantage market than some of the earlier concerns about carrier withdrawals and benefit reductions might have suggested.

CMS expects the following for 2027:

• Average Medicare Advantage premiums will decrease 16.5%, from $14.37 to $12 per month.
• Average Part D premiums within Medicare Advantage plans will decrease 38%, from $11.32 to $7 per month, after Medicare Advantage rebates.
• Supplemental benefits, including dental, vision and hearing, are expected to remain relatively stable.
• More than 99% of Medicare beneficiaries will have access to at least one Medicare Advantage plan.
• Approximately 97% will have at least 10 Medicare Advantage plans available.

CMS also projects that approximately 80% of current Medicare Advantage beneficiaries will be able to remain in their existing plan with the same or a lower premium.

The total number of Medicare Advantage plans nationwide is expected to remain relatively stable, declining slightly from 5,553 in 2026 to approximately 5,532 in 2027.

These are national projections, however. They don't mean every beneficiary will have the same number of plans available or that every existing plan will maintain its benefits.

What About Stand-Alone Medicare Part D Plans?

This is another interesting part of the announcement.

CMS is projecting that the average monthly premium for stand-alone Medicare Part D plans will increase by less than $1, from $35.09 in 2026 to $36 in 2027.

That is a relatively modest national increase, especially considering that the temporary Part D Premium Stabilization Demonstration is scheduled to end after 2026.

The demonstration provided additional federal financial support to participating stand-alone Part D plans as the prescription drug benefit underwent significant changes.

CMS says its decision to discontinue the program reflects its assessment that insurers have gained sufficient experience with the redesigned benefit. KFF has cautioned that ending the temporary support could still produce larger premium increases for some beneficiaries.

And that is an important distinction.

An average premium increase of less than $1 doesn't mean your particular prescription drug plan will increase by less than $1.

Some plans could become considerably more expensive, while others may offer lower premiums.

For beneficiaries who depend on stand-alone Part D coverage, reviewing their options remains important.

A Lower Premium Doesn't Necessarily Mean Better Coverage

This is where I think beneficiaries need to be careful.

A lower premium is certainly attractive, but the monthly premium is only one part of what determines the overall cost of a Medicare Advantage plan.

You also need to consider the plan's maximum out-of-pocket limit, copays and deductibles.

And perhaps most importantly, you need to make sure your doctors and hospitals are still participating in the plan's network.

A plan that saves you a few dollars each month isn't necessarily a better deal if your specialist is no longer in the network or your prescription costs increase.

The same applies to supplemental benefits.

CMS expects dental, vision and hearing benefits to remain relatively stable nationally. That doesn't guarantee that every individual plan will maintain the same benefits or allowances.

Insurance companies can make changes to their benefits from one year to the next.

A beneficiary who currently receives a particular dental allowance or over-the-counter benefit shouldn't assume that the same amount will be available in 2027.

Reviewing the Annual Notice of Change is a good place to start.

What This Means for Medicare Agents

For Medicare agents, the announcement provides some encouraging national numbers, but it doesn't eliminate the need to prepare for a potentially complicated AEP.

CMS estimates that Medicare Advantage enrollment will reach approximately 34 million in 2027. The agency acknowledges that its enrollment projections have historically underestimated actual enrollment.

The national outlook also doesn't tell us everything about individual markets.

A carrier may continue offering Medicare Advantage nationally while reducing its presence in certain counties. Another company may expand into a market where it previously had little or no business.

And two plans with similar premiums can offer substantially different coverage.

Agents need to look at what's actually happening in the markets they serve rather than relying entirely on national averages.

For beneficiaries whose plans are being discontinued, understanding their available enrollment options and any applicable Medigap guaranteed-issue rights will be particularly important.

This is where having an experienced Medicare broker can make a difference.

The Bottom Line

The latest CMS projections suggest that Medicare Advantage premiums and plan availability will remain relatively stable nationally in 2027, with average premiums actually declining.

That is encouraging news for the millions of Americans who depend on Medicare Advantage.

But I wouldn't confuse lower premiums with lower overall healthcare costs.

A beneficiary's actual expenses will depend on the specific plan they select, the medications they take and the healthcare services they need.

And while the national numbers look encouraging, individual counties and insurance companies may tell a different story.

The Annual Election Period begins October 15 and runs through December 7.

Whether you're currently enrolled in Medicare Advantage or considering it for the first time, take the opportunity to compare your options.

Even if you ultimately decide to keep your existing coverage, it's worth making sure your plan still meets your needs for the coming year.