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CMS’s annual rate announcement shapes what Medicare Advantage carriers can offer next year, from premiums to supplemental benefits. Here’s a plain-English breakdown of what changed and what to watch for locally.
Published June 12, 2026 · By Tom Wertish, Options.Health
CMS finalized its Medicare Advantage payment rates for 2027 on April 6, 2026 — a bigger increase than initially proposed, following heavy pushback from the insurance industry. Here’s what changed, why the number moved so much, and what it could mean when you compare plans this fall.
The final CY 2027 Rate Announcement sets a net average payment increase of 2.48% to Medicare Advantage plans — over $13 billion in additional payments nationally. Factoring in expected risk score trends, insurers estimate the real impact closer to 4.98%, or roughly $26 billion.
Back in January, CMS’s initial Advance Notice proposed a nearly flat 0.09% increase — a fraction of what plans ultimately received. Between the proposal and the April final announcement, CMS reversed course on a planned update to the risk adjustment model, choosing to keep using the existing 2024 model rather than recalibrating it with newer data. That single decision avoided what would have been a meaningful payment cut, and is largely responsible for the gap between the proposed and final numbers.
More generous federal funding makes it somewhat less likely that plans will need to cut benefits or raise costs sharply to stay profitable for 2027 — insurers had warned they might trim benefits or exit certain markets if rates came in too low. That said, a national funding increase doesn’t guarantee any specific carrier or plan in Carver County passes that funding through as better benefits; it varies by plan. It’s still worth a real comparison during this fall’s Annual Enrollment Period rather than assuming your current plan automatically benefits.
CMS also finalized stricter rules on which diagnoses count toward a plan’s risk-adjusted payments — specifically excluding diagnoses from certain chart reviews not tied to an actual patient visit, and from audio-only telehealth visits. This is aimed at reducing overpayment tied to aggressive coding practices industry-wide, separate from the base rate increase itself.
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