Next year average monthly Medicare Advantage premiums are expected to fall 16.5 percent, according to the Centers for Medicare and Medicaid Services, from $14.37 in 2026 to $12.
But as good as that news sounds for retirees, changes to co-pays, deductibles and other benefits could cost them hundreds or even thousands of dollars.
“Everyone looks at the headline number, but what they don’t see is how everything else has shifted,” said Geoffrey Schmidt, founder of the retirement-focused education hub Holy Schmidt!.
Not everyone’s premium will drop, and Medicare Advantage enrollees also generally pay the Medicare Part B premium, which covers medical services. Regardless of whether your specific premium gets cheaper, the real question is whether you’ll spend less on health care next year.
Lower premiums’ hidden costs
Peter Abilla, an independent Medicare insurance agent and founder of Resting Sycamore Advisors, said that when one aspect of a program is lowered, there are often raises hidden elsewhere.
One of the biggest potential surprises is a plan’s annual out-of-pocket maximum, which limits what beneficiaries pay for covered medical services. Abilla said he’s seeing 2027 plans with lower premiums but higher out-of-pocket maximums, specialist co-pays or prescription drug deductibles.
For 2027, the maximum out-of-pocket spending limit rises to $9,850, up from $9,250 in 2026, and some plans are bumping up their caps in response.
Other plans are reducing dental allowances, over-the-counter benefits or reimbursements toward Medicare Part B premiums.
Although the percentage drop in Medicare Advantage premiums sounds fairly large, it amounts only to a bit more than $2 per month in savings. For example, if your plan drops its dental allowance from $2,000 to $1,000, a major procedure could end up costing you nearly the full $1,000 difference, because the average premium drop doesn’t offer much to offset it.
Schmidt, who is also a Medicare insurance adviser, said a plan that is inexpensive when you’re healthy can suddenly become much more costly when you need frequent doctor visits or ongoing treatment. As expenses escalate, you may find yourself approaching the plan’s annual out-of-pocket maximum.
Check whether your plan has changed
Abilla recommended reviewing your plan’s “annual notice of change” to understand what changes may be coming before open enrollment ends Dec. 7.
Doctors and hospitals don’t always remain in-network. This can be particularly concerning for someone who has an established relationship with a specialist or needs ongoing medical care, Abilla said.
Check specialist and hospital co-pays, deductibles and the annual out-of-pocket maximum, which generally doesn’t include prescription drug expenses.
Also, confirm that your prescriptions remain covered, their future cost and whether your preferred pharmacy remains in the plan’s network.
“Doctors, drugs, pharmacy and preferred facilities are what I hammer home every time,” Abilla said. “All the bells and whistles won’t matter if these things are not covered.”
You can compare available plans using Medicare’s Plan Finder.
If your plan disappears
For some retirees, losing a Medicare Advantage plan could actually open the door to better coverage options.
Abilla noted that someone with a broken back might have difficulty qualifying for Medicare Supplement Insurance, also known as Medigap, because of their medical history.
But if their Medicare Advantage plan is being discontinued, they may qualify for what’s called a guaranteed-issue right. That would allow them to switch to the standard Medicare plan and purchase a Medigap policy without undergoing medical underwriting.
Medicare specifies that if you’re eligible, you can apply within 63 days of your Medicare Advantage coverage ending. Your state may also offer additional options.
Medigap isn’t necessarily a cure-all, as it has its own premiums. Beneficiaries may also need to buy separate prescription drug coverage.
A lower premium may sound like a good deal until you run a true cost comparison that captures your overall coverage. For some, the right Medicare plan might not always be the one that’s cheapest up front.
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