The Centers for Medicare & Medicaid Services finalized the growth rate behind Medicare Advantage’s 2027 payments to insurers on April 6, closing a months-long fight over how far the program’s benchmark should rise. The final national per capita Medicare Advantage growth percentage for 2027 lands at 4.40 percent, alongside a fee-for-service growth percentage of 5.46 percent, both figures CMS treats as settled rather than proposed. The number arrives at an odd moment for the program: insurers are simultaneously walking away from hundreds of thousands of members in specific Medicare Advantage contracts, even as the government’s own aggregate payment trend moves upward.
A Final Number That Followed Months of Industry Pressure
CMS’s April 6 announcement did not arrive as a surprise proposal; it closed out a comment process that began with the agency’s Advance Notice published January 26, and it followed direct pressure from the industry it regulates. More than 100 organizations had urged CMS to raise its initial rate above what they called a near-flat proposal, citing the plan exits and market instability already underway across Medicare Advantage. The final 4.40 percent figure came out higher than that early proposal, a shift CMS attributes to the comments it received rather than to a change in its own methodology.
The rate announcement itself makes the finality explicit, stating that after considering all substantive comments on the CY 2027 Advance Notice, the agency is finalizing policies for the CY 2027 Rate Announcement rather than proposing them. That distinction matters because a similar figure appeared in earlier form as a projection during the Advance Notice stage; only the April document converts it into the number insurers can actually build their 2027 bids around.
Two years of enrollment losses among the largest national insurers form the backdrop for that lobbying. UnitedHealthcare’s Medicare Advantage membership fell roughly 9 percent and Elevance Health’s fell 14 percent during the most recent annual enrollment period, even as smaller regional plans posted record gains by staying in markets the larger companies were narrowing. The final growth percentage responds to that instability at the level of the whole program, not to any single insurer’s specific losses.
Free plan-change checklist: A Medicare plan can change its costs, drugs and doctors for next year even when its name stays the same. Check the changes with the free 2027 review sheet.
Why the National Growth Rate Doesn’t Reach Every Contract
A national per capita growth percentage sets the trend used to calculate benchmark payments across every Medicare Advantage county nationwide, but it is not the only adjustment CMS applies before money reaches an individual plan. The same rate announcement that finalizes 4.40 percent growth also finalizes a statutory minimum Medicare Advantage coding pattern difference adjustment for 2027, a separate downward adjustment applied to account for how much more thoroughly Medicare Advantage plans document member diagnoses compared with traditional Medicare.
CMS set that adjustment at 5.90 percent for 2027, the statutory minimum the agency is required to apply, and it works in the opposite direction from the growth percentage, reducing the risk scores used to calculate a plan’s payment rather than adding to them. A plan’s actual year-over-year revenue change is therefore never simply 4.40 percent; it reflects the growth percentage netted against that coding adjustment, county-specific cost trends, and whatever a plan’s own Star Rating does to its bonus payments that year.
That gap between a national growth figure and an individual plan’s actual payment change is exactly where a low-rated or high-cost contract can end up losing money even in a year CMS raises the overall trend. A contract already sitting at 3.5 stars or below, with a coding-adjusted risk score trending down and no material improvement in its cost structure, can see its effective revenue fall in the same year the national percentage everyone reads about goes up.
Insurers Are Still Retreating From Specific Counties
Humana’s own 2027 plans illustrate the gap directly. The insurer told investors in July that Medicare Advantage contracts covering roughly 600,000 members will not continue into next year, with the majority of the affected plans rated 3.5 stars or below for the 2027 bonus year, according to a report on the company’s earnings call. That decision came the same year CMS finalized a higher national growth percentage than the industry initially expected, underscoring that the aggregate trend and a specific insurer’s contract-by-contract math are two different calculations.
Every one of those exits eventually generates the same federally required notice, dated no later than October 2 for any contract ending December 31, regardless of how the national growth percentage moved that year. UnitedHealthcare and Elevance Health both lost meaningful Medicare Advantage membership share during the most recent annual enrollment period, even as CMS’s finalized rate moved in the direction the industry had lobbied for, which suggests a rising national benchmark can coincide with continued retrenchment at specific insurers when county-level costs, coding adjustments and Star Ratings outrun what the aggregate trend provides.
The 4.40 percent figure is real and final, not a projection carried over from the Advance Notice stage, and it will raise the pool of money Medicare distributes across Medicare Advantage plans in 2027. What it will not do is guarantee that any specific plan’s revenue rises by that amount, or that the contracts already losing money at the county level become profitable simply because the national number moved higher. That distinction is the one CMS’s own rate announcement draws and insurers’ 2027 exits confirm.
Shopping Plans in a Year Insurers Are Retreating
A rising national growth percentage explains why Medicare’s overall payments to insurers are increasing, but it does not indicate whether a specific plan in a specific county is one an insurer decides to keep for next year. The same rate announcement that sets that national figure leaves every plan-by-plan comparison, county by county and drug by drug, entirely up to enrollees themselves.
The 2027 Medicare Open Enrollment Decision Kit is a 42-page decision kit built around a prescription-by-plan comparison and a cost calculator spreadsheet that scores plans on cost, drugs and doctors.
Look up the prescription-by-plan comparison and cost calculator in The 2027 Medicare Open Enrollment Decision Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
