2027 Advance Notice on Medicare Advantage Payments

This white paper examines the influence of fee-for-service (FFS) Medicare spending trends on federal payments in Medicare Advantage (MA) for the year 2027. It details the projected increase in average payments to MA organizations, which is expected to rise by 0.09%, remaining largely unchanged from 2026. The analysis highlights that while FFS costs are projected to increase by over 5%, this creates a significant gap between FFS trends and MA payments. The paper outlines key drivers of projected trends, including changes in Part A and Part B costs, and discusses the implications of risk score adjustments on MA payments. It also addresses the complexities involved in estimating healthcare costs, particularly the impact of policy changes and coding trends. The document concludes by emphasizing the importance for MA plans to monitor CMS projections and adjust their strategies accordingly for 2027.