Medicare 2026

How Medicare Will Pay Advantage Plans in 2027: The Rate Announcement and Audits

If you have Medicare Advantage, or you're weighing it for 2027, two behind-the-scenes decisions by the Centers for Medicare & Medicaid Services (CMS) are worth understanding. One is how much CMS will pay Medicare Advantage plans next year. The other is how aggressively CMS is checking whether past payments to those plans were accurate. Together, they shape the premiums, benefits and plan choices you'll see this fall.

What the 2027 Rate Announcement does

On April 6, 2026, CMS released the Calendar Year 2027 Rate Announcement, the final word on how Medicare Advantage plans will be paid next year. CMS projects the change in payments will average 2.48%, or about 4.98% once expected risk score trend (how plans' coded diagnoses are likely to shift) is included. That's a meaningful increase from the Advance Notice back on January 26, 2026, which had projected just 0.09%.

A couple of technical choices stand out. For 2027, CMS will keep using the 2024 Medicare Advantage risk adjustment model rather than switch to the updated version it had proposed. And it will apply the statutory minimum "coding pattern difference" adjustment of 5.90%, the same as in 2026. In plain terms: the formulas plans have been working with largely stay in place.

Why does this matter for you? Payment rates are an input, not a guarantee. They influence what plans offer, what they charge and what extras they can afford. But every plan's premiums, provider network and benefits are set locally, and the only way to see what applies to you is to look up your options on Medicare.gov.

A quieter change: which diagnoses count

Medicare Advantage plans are paid more for enrollees with more serious or chronic conditions, through a system called risk adjustment. Starting in 2027, CMS will no longer count two types of diagnoses when calculating most risk scores:

• Diagnoses from "unlinked" chart reviews — information pulled from medical records that isn't tied to a specific patient encounter.
• Diagnoses from audio-only encounters (phone visits without video).

There's one carve-out: unlinked chart review diagnoses can still count for enrollees who switch from one Medicare Advantage organization to another, so the new plan isn't penalized for missing history.

The audit side: RADV expands

The other half of the story is enforcement. In a RADV audit, CMS checks whether the diagnoses a plan submitted are backed up by enrollees' medical records. If they aren't, CMS can collect overpayments.

On May 21, 2025, CMS announced it would audit all eligible Medicare Advantage contracts — about 550 — for each payment year, up from roughly 60 a year. Depending on contract size, CMS will review between 35 and 200 records per contract. To do that work, CMS said it planned to grow its medical coder team from 40 to about 2,000 by September 1, 2025.

CMS began payment year 2020 audits on March 20, 2026, payment year 2021 audits on May 29, 2026, and payment year 2024 audits on August 28, 2026. For the 2024 audits, CMS samples 35, 50, 100 or 200 enrollees per audited contract, with records due from plans by February 5, 2027.

For enrollees, audits are a back-office process. But over time, tighter checks on how diagnoses are documented can affect how plans build networks, structure extra benefits and set premiums.

What CMS is projecting for 2027

On September 28, 2026, CMS shared projections based on plan filings: Medicare Advantage enrollment of about 34 million (roughly 47.4% of people with Medicare), a 16.5% decline in the weighted average monthly Medicare Advantage premium from 2026 to 2027, and that about eight in 10 Medicare Advantage enrollees can stay in their current plan with the same or a lower premium next year. These are national averages; your plan's specifics may be very different.

What stays the same, what you'll see later

A few program-level numbers are set for 2027:

• The Part D out-of-pocket cap rises to $2,400 (up from $2,100 in 2026).
• No Part D plan may charge a deductible higher than $700.
• The Part D base beneficiary premium is $41.33, a national figure used in the late-enrollment penalty.
• Social Security benefits payable beginning January 2027 reflect a 3.6% cost-of-living adjustment.

Some things aren't out yet. The 2027 Part B standard premium and deductible, and the 2027 IRMAA income brackets and surcharges, are announced by CMS in the fall — typically November. Watch Medicare.gov for the official figures rather than relying on estimates.

Medicare Advantage vs. Original Medicare + Medigap

If you're deciding between Medicare Advantage and Original Medicare paired with a Medigap policy and a stand-alone Part D plan, both have real trade-offs. Medicare Advantage bundles coverage, often includes extras and caps in-network out-of-pocket costs, but typically uses provider networks and prior authorization. Original Medicare lets you see any provider who accepts Medicare, and a Medigap policy can make costs predictable, but you pay separate premiums and manage Part D on its own. Neither is "best" in the abstract — it depends on your health, your providers and your budget.

Special rules if you have Medicaid or Extra Help

If you qualify for Medicaid or Extra Help with Part D costs, you have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch stand-alone Part D plans. If you're a full-benefit dual-eligible, you can join an integrated Dual Eligible Special Needs Plan (D-SNP) in any month.

What to do this fall

Each fall, your plan sends an Annual Notice of Change describing what will change in January. Read it. Then, during Open Enrollment — October 15 through December 7, 2026 — compare options at Medicare.gov or call 1-800-MEDICARE (TTY 1-877-486-2048), 24/7. Choices made during this window take effect January 1, 2027.

Source: CMS — Medicare enrollment periods (medicare.gov).