The Centers for Medicare & Medicaid Services (CMS) recently released two updates related to Medicare Advantage and prescription drug (Part D) plans for Contract Year 2027:
- Medicare Advantage and Part D Policy and Technical Changes Final Rule: CMS finalized policies affecting Medicare Advantage, the Medicare Prescription Drug Benefit (Part D), and Medicare Cost Plan programs. The rule updates quality measures used for Star Ratings and codifies prescription drug coverage provisions from the Inflation Reduction Act, including eliminating the coverage gap phase, setting a lower annual out-of-pocket threshold, and removing cost sharing in the catastrophic phase. It also finalizes policies related to supplemental benefits, including those offered to chronically ill enrollees.
- CY 2027 Medicare Advantage and Part D Rate Announcement: CMS announced that finalized payment policies are projected to increase payments to Medicare Advantage plans by 2.48 percent, or more than $13 billion, in 2027. The update also includes changes to the Part D risk adjustment model to reflect Inflation Reduction Act changes to the Part D benefit. In 2025, 46 percent of Medicare beneficiaries living in non-metropolitan counties were enrolled in a Medicare Advantage plan.