Medicare Advantage is changing in several ways for 2027. The Centers for Medicare & Medicaid Services (CMS) finalized new policies affecting Medicare Advantage plans, Part D prescription drug coverage, Star Ratings, supplemental benefits, enrollment processes, and administrative requirements. The Contract Year 2027 Medicare Advantage and Part D final rule was issued on April 2, 2026.
The major finalized changes include:
CMS says the 2027 policies are intended to focus quality measurement more heavily on clinical outcomes, patient experience, and meaningful differences between plans.
Star Ratings are used to measure the quality of Medicare Advantage and Part D plans.
The system evaluates plans across areas such as:
Star Ratings can also affect quality bonus payments and the rebates available to Medicare Advantage organizations.
For 2027, CMS is changing the measure set used in the ratings system.
The final rule removes 11 measures that primarily involve administrative processes or areas where there is limited meaningful variation between plans.
The objective is to place greater emphasis on areas where differences in plan performance can be meaningful to beneficiaries.
CMS is adding a new Part C Depression Screening and Follow-Up measure.
The measure is intended to address gaps in behavioral healthcare.
The new measure begins with the 2027 measurement year and is scheduled to affect the 2029 Star Ratings.
This means the change does not immediately translate into a new benefit or requirement that every Medicare Advantage member will see during 2027.
Instead, it becomes part of the quality measurement system used to evaluate plans.
The measure focuses on whether appropriate depression screening and follow-up occur.
CMS had previously developed the Excellent Health Outcomes for All reward, which was formerly referred to as the Health Equity Index reward.
For the 2027 Star Ratings, CMS is not implementing this reward.
Instead, CMS will continue using the historical reward factor that encourages consistently strong performance across quality measures.
This is primarily a change affecting how Medicare Advantage plans are evaluated rather than a direct change to a beneficiary's coverage.
One of the more beneficiary-focused changes involves providers leaving a Medicare Advantage plan's network.
Under previous policy, an enrollee could qualify for a Special Enrollment Period when a network change was considered significant under CMS requirements.
The 2027 final rule changes this approach.
CMS is allowing an enrollment period when one or more providers leave the plan network without requiring CMS and the Medicare Advantage organization to first determine that the network change is significant.
This can provide additional flexibility for beneficiaries who want to continue seeing a particular healthcare provider.
For example, a beneficiary may discover that a preferred physician is no longer participating in the plan.
Under the finalized policy, the beneficiary may have a more straightforward path to changing Medicare Advantage coverage when the applicable conditions are met.
Medicare Advantage plans can offer Special Supplemental Benefits for the Chronically Ill, commonly referred to as SSBCI.
These benefits can be designed for members who meet specific eligibility requirements associated with chronic conditions.
CMS is finalizing policies intended to strengthen administration and transparency for these benefits.
Plans must publicly post their plan-developed SSBCI eligibility criteria.
This can make it easier for beneficiaries and other stakeholders to understand the criteria a particular plan uses when determining eligibility.
The availability of a particular supplemental benefit can still vary by plan and service area.
Some Medicare Advantage plans use debit cards or similar cards to administer supplemental benefits.
The 2027 final rule codifies and clarifies requirements for these arrangements.
CMS requires debit cards to be electronically connected to plan-covered items and services through a real-time identification mechanism that verifies eligibility at the point of sale.
The final rule also requires these debit cards to be limited to the specific plan year.
This means beneficiaries should not assume that an unused balance or card automatically carries forward into a later plan year.
The exact benefits accessible through a card continue to depend on the individual Medicare Advantage plan.
CMS is removing a requirement for Medicare Advantage plans to send mid-year notices concerning unused supplemental benefits.
Previously, plans were required to communicate information about certain unused benefits during the year.
The 2027 final rule rescinds this requirement.
This does not necessarily eliminate the underlying benefit.
Instead, it changes a communication requirement imposed on plans.
Beneficiaries may therefore need to check their plan documents, member portal, benefit materials, or customer service resources to determine what supplemental benefits remain available.
The 2027 final rule removes several health equity-related requirements for Medicare Advantage Utilization Management Committees.
CMS is eliminating requirements involving:
CMS also eliminates a requirement for Medicare Advantage quality improvement programs to include activities designed to reduce health disparities.
These are primarily plan-level regulatory changes.
They do not mean that beneficiaries lose access to ordinary Medicare Advantage medical services because of the rule.
Many Medicare Advantage plans include prescription drug coverage through Medicare Part D.
Several 2027 changes concern Part D rather than the medical benefits of Medicare Advantage itself.
CMS is codifying major Inflation Reduction Act provisions for 2027 and beyond.
These provisions include:
CMS is also codifying additional operational changes involving True Out-of-Pocket costs, specialty tiers, reinsurance payments, and the Selected Drug Subsidy.
These changes can be particularly important for Medicare Advantage Prescription Drug plans.
The traditional Medicare Part D coverage gap, commonly known as the "donut hole," has been eliminated.
The 2027 final rule codifies the related Inflation Reduction Act changes.
This means the old structure involving an initial coverage period followed by a separate coverage gap is no longer the basis for the Part D benefit structure.
Instead, the redesigned Part D benefit includes an annual out-of-pocket threshold followed by catastrophic coverage with no cost sharing for covered Part D drugs once the applicable threshold is reached.
The specific annual threshold for 2027 should be reviewed in the official CMS materials for that plan year.
Another major change concerns the catastrophic phase of Part D.
CMS is codifying the provision eliminating beneficiary cost sharing once the applicable catastrophic threshold has been reached.
This is significant for people who have high annual prescription drug expenses.
However, not every Medicare beneficiary reaches the catastrophic phase.
For people with relatively low prescription costs, this change may have little effect on annual spending.
The Inflation Reduction Act created the Manufacturer Discount Program, which replaced the previous Coverage Gap Discount Program beginning January 1, 2025.
CMS is codifying the program's requirements for 2027 and later years.
The program involves manufacturers providing discounts on certain covered Part D drugs.
The details are largely administrative and operate within the Part D payment structure.
Beneficiaries generally experience the program through the applicable prescription drug benefit rather than interacting directly with the manufacturer discount mechanism.