Medicare Advantage premiums to fall 16.5% in 2027, a drop of $2.37 a month, as the Part D subsidy ends

The average monthly premium across all Medicare Advantage plans is projected to fall from $14.37 in 2026 to $12.00 in 2027, a 16.5% decline, the Centers for Medicare & Medicaid Services said in a release late Monday. The figure is weighted by enrollment and includes plans with drug coverage and special needs plans. CMS projects Medicare Advantage enrollment at 34 million in 2027, about 47.4% of everyone on Medicare, and said plan projections have historically understated actual sign-ups.

CMS released the figures ahead of Medicare open enrollment, which runs from October 15 to December 7.

The number behind the 16%

A 16.5% cut sounds like a big change in what seniors pay. In dollars it is $2.37 a month, or about $28 over a year, because most Medicare Advantage premiums are already low or zero. The larger move is inside the drug benefit: the average Part D portion of a Medicare Advantage premium, after plan rebates, is projected to fall from $11.32 to $7, a drop of $4.32 a month, or 38%.

People in stand-alone drug plans, used alongside traditional Medicare, see the opposite direction. That average premium is projected to rise from $35.09 to $36, an increase of 91 cents a month. This is the first year without the Part D Premium Stabilization Demonstration, the temporary program that had subsidized those plans and which CMS narrowed for 2026 and is ending in 2027. CMS said pricing across Part D remains broadly stable despite "speculation and misleading reports" about the demonstration ending, and that 93% of beneficiaries who do not qualify for low-income help will have access to an enhanced Part D plan for less than $6 a month.

Who it actually hits

The line that matters most for an individual is further down the release: about eight in ten Medicare Advantage members will be able to stay in their current plan at the same or a lower premium in 2027. That leaves roughly two in ten whose plan either costs more or is not available to them next year, and at 34 million projected enrollees that is millions of people who need to compare plans this fall. The number of plans nationally is nearly unchanged, 5,553 in 2026 against about 5,532 in 2027, and CMS said 97% of beneficiaries will have 10 or more to choose from.

For small-business owners, this lands in two places. Owners who are 65 or older and on Medicare themselves face the same open-enrollment choice as any beneficiary. Employers with staff turning 65 often field questions about whether to stay on the company plan or move to Medicare; the premium figures in this release are one input to that choice, alongside deductibles, networks and drug coverage, which the averages do not show. CMS points beneficiaries to the Medicare Plan Finder at Medicare.gov to compare plans on those terms.

What investors are watching

Lower average premiums do not tell investors much about insurer profits on their own, since premiums are one piece of plan revenue alongside government payments. Health insurer shares were lower on Tuesday morning: at 10:58 a.m., UnitedHealth was down 1.5%, CVS Health 1.3%, Elevance 1.1%, Centene 1.7% and Humana 0.3%, according to Nasdaq quote data. Those moves were modest, and we did not find a report tying them specifically to the CMS figures. Plan-level detail is in CMS's 2027 landscape files, and insurers will report how their own enrollment shifted after open enrollment closes.

Sources: Centers for Medicare & Medicaid Services; Nasdaq quote data (10:58 a.m. ET). This is market information, not investment advice.