2027 Medicare Advantage Advance Notice

What Agents Need to Know: 2027 Medicare Advantage & Part D Advance Notice

Grab your coffee, we’ve got fresh CMS news that’ll matter for your plan year. On January 26, 2026, CMS released the 2027 Medicare Advantage (MA) & Part D Advance Notice, and honestly, it’s a lot less dramatic on rates than some expected. But there are the details under the hood you need to understand.

What Is This Anyway?

Each year, CMS issues an Advance Notice that gives us a preview of how Medicare Advantage capitation rates and payment policies (including Part D) might change in the coming year. It’s part of the statutory Advance Notice = Rate Announcement process, so this is 2027’s early peek.

This isn’t final; a rate announcement is coming in April 2026, but it’s serious enough that plans are already discussing what it means for bids, margins, and benefit strategy.

Rates: Nearly Flat

Let’s get to the elephant in the room:

CMS projects a net average payment increase of just 0.09% for MA plans in 2027. Yep, that’s basically flat compared to 2026. That’s around $700 million more going out to plans, which sounds like a lot… until you remember the MA budget is huge.

When you factor in population effects and coding trends, CMS says the effective change could look more like +2.54%, but that’s driven by how risk scores trend over time, not a higher base rate bump.

Why does this matter?

• Flat-ish rates squeeze margins if costs keep climbing.
• Star Ratings, risk adjustment, and coding changes matter more than a tiny rate uptick.
• Insurers may tighten benefits or rethink geographic bid strategy.

Risk Adjustment Is Getting a Glow-Up

This year’s Advance Notice is heavy on risk adjustment tweaks:

CMS is updating the MA risk adjustment model to use more recent data (2023 diagnoses and 2024 cost experience), which will better reflect today’s disease burden and real-world costs in payments.

Big deal: CMS proposes excluding diagnoses from unlinked chart reviews, that’s right, no more counting chart-mined diagnosis codes that aren’t tied to real outpatient or inpatient encounters for risk scoring.

Why agents care:

• More accurate risk adjustment affects how plans price draws and benefits.
• It may reduce overly inflated risk scores, a hot topic after coding intensity scrutiny.
• It could change how carriers bid and structure supplemental benefits.

CMS is also tweaking the Part D risk adjustment model to line up with Part D redesign provisions and updated cost/diagnosis data, a good reminder that Part D pricing accuracy still matters.

Star Ratings & Quality Bonus Payments, What We Know

The Advance Notice also touches on the Star Ratings impact:

CMS has a small -0.03% estimate on change due to Star Ratings, reflecting changes to quality bonus payments.

This isn’t the big Star overhaul, that’s in the Proposed Rule, but the Advance Notice does give us a hint that quality metrics and bonus eligibility will continue to be important. (For reference, those Proposed Rule changes include measure removals, refinements, and other tweaks, but that’s for another blog!

What CMS Is Saying (and Why It Matters)

CMS is positioning these proposals as efforts to:

• Improve payment accuracy
• Promote beneficiary choice
• Maintain plan affordability
• Support long-term sustainability

These aren’t just buzzwords; they reflect real tension between keeping Medicare Advantage vibrant and getting better at paying for actual risk.

Important Deadlines & Next Steps

– Comments on the Advance Notice are open; agents, carriers, and stakeholders can weigh in (due late Feb 2026).-Final Rate Announcement lands by April 6, 2026, that’s the one plans really use for bids and agent communications.

Then comes fall enrollment for 2027 plans, yes, that’s soon!

 Here is what it really means

• 2027 MA rates are basically flat (+0.09%), not a huge bump.
• Risk adjustment updates matter more than the headline rate.
• Chart review diagnoses may not count for risk scores anymore.
• Star Ratings shifts are in motion.
• Final rates hit in April; that’s the real planning number.

If you’re talking with plan sponsors, compliance teams, or clients, this Advance Notice should spark conversations about pricing strategy, risk adjustment impact, and benefit design trade-offs.

Stay tuned as more details come out.  Make sure you are following Pinnacle on our website and social media channels, as we will provide more information as it becomes available.  You can always reach out to the Pinnacle team at 800-772-6881 or email Sales@pfsinsurance.com.