Bids Are In! What Does 2027 Portend for Medicare Advantage and Part D Enrollees?
by Lauren Flynn Kelly
Companion reports from KFF recently depicted 2026 as another disruptive year for Medicare Advantage and Part D in terms of service area reductions, regional plan exits, higher out-of-pocket limits and reduced supplemental benefits. That was after some serious market shakeups in 2025, when insurers grappled with medical costs that began rising in 2024 and government payments that were slow to catch up.
Will this resetting of the MA market continue into 2027, or will things stabilize?
Plans submitted their bids for the 2027 plan year last week, and I caught up with a few industry experts to get a sense of where MA might be headed. The answer? It’s likely that certain trends will continue but may not be as dramatic as they were in 2026. These include strategic market exits, surgical benefit cuts, some portfolio reshuffling and tweaks to things like supplemental benefits and cost sharing amounts.
“If we rewind back to last year, I think many health plans were operating under a doom and gloom scenario of ‘funding is not adequate, our trends are off the rails and we’ve got to make some pretty dire changes,’” says Haitham Aly, a principal specializing in Medicare Part C and Part D consulting with Oliver Wyman. “We saw [companies] terminate certain plans and enroll people in new ones…benefit degradation, network curation, county trimming, and the reshaping of portfolios.”
In 2027, “I think you’re going to still see some of that to an extent,” but maybe not at the “same level of concern that we saw last year,” Aly continues.
That’s partly because plans have seen some recent improvements in medical trend, or at least in their ability to manage medical costs. Moreover, the government estimated an average revenue change of 2.48%, compared with its initial expected average impact of 0.09% for 2027.
That’s not to say that there won’t be a third wave of plans cutting their losses, he adds. (We’ve already seen regional plans Presbyterian Health Plan in New Mexico and Providence Health Plan in Washington state announce their exits for next year.) But the differences may be more subtle and may not be consistent across the industry.
Changes May Skew Toward Affordability Benefits
“I think the rate announcement was definitely helpful, but we’re still in this new normal of margin pressure amid modest increases in plan payments,” weighs in Tricia Beckmann, principal with Faegre Drinker Consulting. “It’s looking like it’s not going to be another retraction year, but it’s not like the rubber band’s going to snap back and we’re going to see a thousand flowers bloom with different benefit offerings.”
The KFF report estimated that 55% of eligible Medicare beneficiaries enrolled in MA this year. That’s still a significant portion, but KFF noted that the pace of enrollment in MA is slowing.
Of the benefits offered by MA plans that are not available in traditional Medicare, dental, vision and hearing remain core benefits included in most plans. For example, 98% of MA enrollees now have some form of dental coverage, compared with 94% in 2021, although the extent of coverage varies.
But after years of gaining popularity, most other extra benefits peaked in 2023 and have been declining. Specifically, KFF reported smaller shares of enrollees in plans that offer over-the-counter coverage (68% in 2026 versus 79% in 2025), meal benefits (65% in 2026 versus 70% in 2025), remote access technologies (43% in 2026 versus 49% in 2025) and transportation (73% in 2026 versus 46% in 2025). The picture for Special Needs Plans looks slightly different, due to the nature of those plans (e.g., in-home support services are available to 38% of SNP enrollees, compared with 10% of non-SNP enrollees), KFF observed.
Given the persistent affordability crisis in the U.S., insurers would be wise not to eliminate certain supplemental benefits. These include meal and grocery, over-the-counter coverage, and Part B “buyback” benefits. And since CMS abandoned its plan to prohibit the marketing of dollar amounts associated with extra benefits, more insurers may offer Part B premium reductions or heavily market them, suggests Beckmann.
In addition to Part B buybacks and OTC coverage, Aly predicts an ongoing emphasis on “particular types of members in certain regions,” such as through Chronic Condition Special Needs Plans (C-SNPs). Whereas plans a few years ago were focused more on general enrollment MA plans, “the future from what we’re seeing is…plans getting more tactical on how plans engage with members that need specific interventions.” And while some plans may look at restricting their OTC coverage, they may end up rethinking that during the rebate reallocation process in August if they need to enrich their benefits.
On the Part D side, Oliver Wyman’s Brooks Conway predicts continued Part D benefit erosion in the form of higher deductibles and coinsurance amounts for prescription drugs. But that’s as Part D enrollees face new maximum out-of-pocket limits and structural benefit changes due to the Inflation Reduction Act.
“There’s also just continued uncertainty around how much the Part D benefit is going to cost plans, just by nature of how quickly drug trend is moving,” says the Part D actuary.
Despite BALANCE Delay, GLP-1s Remain Top Concern
One thing that didn’t make it into bid planning but could impact future Part D planning is the BALANCE model. Introduced by CMS as Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (no really, that was its full name), the model would have allowed participating Part D plans to bypass the current exclusion of GLP-1 drugs used for weight loss and offer them at a lower negotiated price than is typically available to plans. But CMS indefinitely delayed the launch of that voluntary model and opted to fully fund coverage of three popular weight-loss drugs via the Medicare GLP-1 Bridge demonstration. (For more on why BALANCE wasn’t the ideal approach to testing obesity drug coverage in Medicare, see Kenneth Thorpe and Kristen Axelsen’s Forefront piece in Health Affairs.)
“We spent a lot of time during the bid season thinking about and talking about the BALANCE model,” laments Conway. “But, it still may have been a fruitful exercise because we are eventually going to have to cover GLP-1s for weight loss in Part D, so it made everybody do the legwork to think about that population and how [coverage] might be funded.”
But What About Clover and the Star Ratings?
Unless you’re living under a rock, you know that a federal court’s recent ruling in favor of Clover Health is like no other Star Ratings decision we’ve seen. That’s because the insurer’s lawsuit challenged CMS’s authority to make changes to the Star Ratings through technical notes; the judge agreed and set aside Clover’s 2026 Star Ratings. Prior to this, other insurers had argued over calculations involving cut points, the Tukey outlier methodology, and so on.
Questions remain about how this latest decision will impact the future of the Star Ratings and whether it will involve more than just Clover resubmitting its bid to account for the new bonus revenue. Plans, keep your actuaries and advisers close!
Lauren Flynn Kelly has been writing about the business of health insurance and pharmacy benefits since the early 2000s. Up until its closure in August 2025, she served a variety of roles at AIS Health, including beat reporter on Medicare Advantage and executive editor leading a specialized team of health business journalists. When she’s not busy paddleboarding at the Jersey Shore, she is helping clients build their brand authority through the creation of blog posts, case studies, white papers and other strategic content.