Medicare beneficiaries face another challenging year as major insurers reduce benefits and increase out-of-pocket costs for 2027 coverage. This marks the third consecutive year that Medicare Advantage plans have cut back on services while raising deductibles and other expenses, raising concerns about the impact on seniors’ access and affordability.

Enrollment for 2027 Medicare coverage runs through December 7, and this year’s market is expected to be particularly volatile. Approximately 3.2 million people currently enrolled in Medicare Advantage plans will be affected by the closure or withdrawal of those plans from various regions, according to data from Chapter, a national Medicare brokerage. Many of the departing or downsizing offerings are preferred-provider organization (PPO) plans, which typically provide more flexibility in choosing specialists without the need for referrals.

Judy Moreland of Mesquite, Texas, voiced frustration about losing her PPO plan, citing worries about being forced into more restrictive health maintenance organization (HMO) plans with tighter networks. “The insurance companies are getting a little tighter and a little tighter about the things that they allow and don’t allow,” Moreland said. Experts advise that beneficiaries confirm their doctors’ participation in any new plans, as some hospital systems are severing ties with Medicare Advantage carriers, and network directories can be outdated.

While many Medicare Advantage plans continue to offer $0 premiums, beneficiaries should anticipate rising costs when receiving care. Leerink Partners analysts report that maximum out-of-pocket expenses—including copayments and other fees—are increasing by an average of 10%. Copays for specialist visits are rising in some plans, with some moving to coinsurance models requiring patients to shoulder a percentage of the costs rather than fixed fees. In addition, insurers are trimming supplemental benefits such as dental coverage, over-the-counter health products, and transportation services, which have been favored by many seniors.

Prescription drug coverage is another area undergoing significant changes. The number of stand-alone Part D plans has declined by 12% from this year, now at 316 offerings, and has fallen 55% since 2024. While the Centers for Medicare & Medicaid Services reports only modest premium increases on average, consulting firm Avalere Health notes that many beneficiaries will face substantial premium hikes if they remain with their current plans. For example, Peter Harrigan, a 75-year-old retiree in Rehoboth Beach, Delaware, expects to pay nearly $175 monthly next year for his Part D plan, an 85% increase. He intends to keep the plan to maintain access to his doctors despite the cost spike.

Within Medicare Advantage plans, drug deductibles are rising by about 30% on average, often surpassing $500 annually. Experts warn that changes in drug formulary tiers and increased deductibles are causing some medications to become significantly more expensive for enrollees. Mike Smith, president emeritus of The Brokerage, noted that such adjustments could generate considerable dissatisfaction once the new plans take effect.

Adding to the complexity of this year’s enrollment, some Medicare Advantage plans are capping enrollment, meaning that plans may fill up and no longer accept new members well before the December deadline. These limits can be difficult for seniors to identify, potentially necessitating earlier decision-making. Some insurers are also discouraging sign-ups by reducing commissions to brokers or removing their plans from agents’ digital platforms, making it harder for beneficiaries to see all available options.

Given the increased cost pressures, shrinking networks, and enrollment uncertainties, experts emphasize the importance of thorough research. Seniors are advised to verify provider networks directly with doctors and insurers, use Medicare’s drug plan finder tools to assess medication costs, and act promptly to secure coverage that meets their needs in the coming year.