The most consequential piece of mail a Medicare enrollee gets each year arrives in late September and looks exactly like junk.
Medicare’s annual enrollment window opens October 15 and closes December 7, with whatever you pick taking effect January 1. Before that window opens, your plan has to send you an Annual Notice of Change, due by September 30. It lists every difference between what you have this year and what you will have next year: premium, deductible, copays, drug formulary, provider network. Most of it is boilerplate. The cost comparison table in the front is not.
This year the notice matters more than usual, because a large number of Medicare Advantage plans are going away.
Two systems, two completely different cost structures
Original Medicare is the government program. Part A covers hospital stays, Part B covers doctor visits and outpatient care, and you can see any provider in the country who accepts Medicare, which is most of them. There is no network and no referral requirement. Medicare pays its share, you pay the rest, and the rest has no ceiling. Original Medicare on its own carries no annual out-of-pocket maximum, which surprises almost everyone who learns it for the first time.
Because of that, people on Original Medicare usually buy two extra things: a standalone Part D drug plan, and a Medigap policy (also called Medicare Supplement) that covers the deductibles and the 20% coinsurance Medicare leaves behind. Add it up and you are paying three premiums, but your exposure in a catastrophic year is predictable.
Medicare Advantage is the private alternative. A carrier such as UnitedHealthcare, Humana, or Aetna takes over your Part A and Part B coverage, usually bundles in drug coverage, and often adds dental, vision, hearing, or a gym membership. Many plans carry a $0 premium beyond what you already pay for Part B. In exchange you accept a network, and you accept prior authorization, meaning the plan reviews certain services before agreeing to pay for them. Every Medicare Advantage plan does have an annual out-of-pocket maximum, which Original Medicare lacks.
So the tradeoff is not complicated to describe. Original Medicare plus Medigap costs more every month and asks less of you when you get sick. Medicare Advantage costs less every month and asks more of you when you get sick.
KFF reports that 55% of eligible Medicare beneficiaries were enrolled in Medicare Advantage in 2026, though growth has slowed. Nearly a quarter of those enrollees are in special needs plans designed for people with specific chronic conditions or dual Medicare and Medicaid eligibility.
What is changing for 2027
The costs are going up across the board, and some plans are disappearing.
The 2026 Medicare Trustees Report projects the standard Part B premium rising to $209.50 a month in 2027, up from $202.90. That is a projection, not a rule. CMS confirms the real number in November, and the trustees have already revised their own estimate downward once this year, so treat $209.50 as a planning figure rather than a promise.
On the drug side, the standard Part D deductible is projected to climb to $700, an increase of $85, and the average Part D premium to around $41. The annual out-of-pocket cap on prescriptions, one of the better things to happen to Medicare in years, rises to $2,400 from $2,100. Fifteen more high-cost drugs, including several GLP-1 medications, join the federal price negotiation list.
The bigger story is the plan exits. Humana is discontinuing Medicare Advantage plans covering about 600,000 members for 2027, roughly 8% of its 7.2 million enrollees, concentrated in contracts with lower star ratings. The company expects to move about 40% of those people into its other plans. Humana is not alone. UnitedHealthcare is pulling out of 34 counties across 12 states, Molina is discontinuing its Medicare Advantage drug product entirely, and industry-wide more than a million enrollees are losing the plan they have.
The reason is unglamorous. Medical costs rose faster than the payments insurers receive, and the plans that were thinnest on margin got cut. CMS actually raised 2027 payment rates by 2.48%, and the exits happened anyway.
If you are in a rural county, this matters more. In 28% of US counties, UnitedHealthcare and Humana together hold at least three quarters of Medicare Advantage enrollment. When one of them leaves, there is often nothing comparable to switch to.
The rule that traps people, and almost nobody explains it
If your plan is discontinued, you get a special enrollment period and a guaranteed path back to Original Medicare. Fine.
But consider the person who chose Medicare Advantage voluntarily at 65, stayed on it for six years, then developed a condition that made the network feel small. They can switch back to Original Medicare during annual enrollment. Getting a Medigap policy to go with it is a different matter.
Medigap carriers are only required to sell to you without medical underwriting during your initial six-month Medigap open enrollment period, which starts when you first enroll in Part B at 65 or later, plus a handful of guaranteed-issue situations. Outside those windows, in most states, the insurer can ask about your health, charge you more, or decline you. A few states including New York, Connecticut, Massachusetts, and Maine are more generous, and the rules there are genuinely different.
So the choice at 65 is not fully reversible in practice, even though it is technically reversible on paper. Someone who takes a $0 premium plan at 65 and needs to leave it at 72 may find that the supplement they want is priced for their medical history. That does not make Medicare Advantage the wrong call. Plenty of people are better served by it, particularly if their doctors are in network and their prescriptions are covered. It means the decision deserves more than ten minutes and a TV ad.
How to actually evaluate a plan
Start with your own doctors and your own prescriptions rather than the benefit list.
Pull up Medicare’s Plan Finder, enter every medication you take with its exact dose, and let the tool show total annual cost rather than premium. A plan with a $0 premium and a drug tier that moves your medication from tier 2 to tier 4 can cost you more than a plan with a $40 premium. Then check each of your physicians against the plan’s current network directory, and call one of the offices to confirm, because directories are wrong more often than they should be.
Look at the out-of-pocket maximum and ask yourself whether you could absorb it in a bad year. That number is the real product you are buying.
Read the star rating. It is imperfect, but plans rated 3.5 stars and below were exactly the ones carriers cut this year, so a low rating is a reasonable signal about whether your plan will still exist in two years.
Finally, check whether your income triggers IRMAA, the surcharge on Part B and Part D premiums that is based on your tax return from two years earlier. A 2027 surcharge is calculated from your 2025 income, which means a one-time event like a home sale or a Roth conversion can raise your premiums well after the fact. If your income dropped because of retirement, divorce, or a spouse’s death, you can appeal using Form SSA-44.
What to do between now and December 7
Find the Annual Notice of Change when it arrives and read the cost comparison table, which is usually on the first two pages. If your plan is being discontinued, the letter will say so plainly, and you will have until the end of February to pick a Medicare Advantage replacement or until you have returned to Original Medicare.
If nothing is changing and your doctors and drugs are still covered, doing nothing is a legitimate answer. Medicare will renew you automatically. But run the Plan Finder comparison anyway, because Medicare’s own cost pages will reflect the confirmed 2027 numbers once CMS publishes them in November, and the premium you budgeted for may not be the premium you pay.
One more thing worth doing while you are in the paperwork: if you are setting money aside for next year’s medical costs, keep it somewhere separate from checking. A high-yield savings account earning real interest turns a deductible you are dreading into a line item you already funded.