Judy Moreland is 80 and lives in Mesquite, Texas. Her Medicare Advantage plan won't be offered next year. She liked it because it was a PPO. She could see a specialist without asking her primary doctor first. About 3.2 million people are in the same spot, by the count of Chapter, a national Medicare brokerage. Their plans are closing or pulling out of their markets for 2027.
The Wall Street Journal's Anna Wilde Mathews calls it a tough year for Medicare shopping. It's the third year in a row that the big insurers have trimmed benefits and added charges. A Baird analyst, Michael Ha, says the plans are focused on “margin repair.” In plain words, their profit margins come first this year. Open enrollment for 2027 coverage closes Dec. 7.
The $0 premium plans aren't going away. The cost shows up when you actually use care. The out-of-pocket maximum is the most you can owe in a year for covered care. By Leerink Partners' count, that cap is up 10% on average in Medicare Advantage. Some plans are raising specialist copays or switching to coinsurance, where you pay a share of the bill instead of a flat fee. The extras seniors like, such as dental, over-the-counter products and rides, are getting trimmed too.
The drug plans are where the surprises hide
Inside Medicare Advantage plans, drug deductibles are up 30% on average, and above $500 in many cases. Stand-alone Part D plans keep shrinking, to 316 next year. That's 12% fewer than this year and 55% fewer than in 2024. Medicare says the average Part D premium is barely rising. We reported that on Oct. 7. Both things are true. The average is flat while some individual plans jump. Peter Harrigan, 75, a retiree in Rehoboth Beach, Delaware, says his stand-alone plan's premium goes up 85% next year, to nearly $175 a month. He's keeping it so he can keep his doctors. “It's definitely a squeeze,” he told the Journal.
Two more traps are worth knowing. A few plans cap enrollment. Once enough people sign up, the plan closes, and it isn't always obvious. Insurers are also pulling some plans off the platforms agents use, or cutting broker commissions. So your agent may not show you every option. Mike Smith of The Brokerage says some drugs have moved between tiers, and more tiers now sit under the deductible. A drug that cost a small copay could cost hundreds of dollars before coverage kicks in.
Our read
This is Retirement · M10 and Health Costs. A health plan is one of the few big retirement bills you can change every year. The lesson of this story is to never let a plan roll over on its own. Don't trust the online doctor list, either. Hospital systems are dropping Medicare Advantage contracts, so call the doctor's office and the insurer. If your plan is one of the ones closing, you may get a special window to buy a Medigap policy with traditional Medicare. That window matters. Medigap enrollment can be restricted at other times.
Here's the check for this week. Open your plan's Summary of Benefits for 2027 and find three lines. The out-of-pocket maximum, the drug deductible, and the tier of each drug you take. Then run every prescription through the drug checker on Medicare.gov. If a number jumped, you have until Dec. 7 to move. Mike Smith of The Brokerage expects a lot of complaints in January. Better to find your surprise in October. Bring the booklet to your next review and we'll read it with you.