Medicare's 2027 shake-up: plan exits, Part D premium hikes, and the star ratings fight

Strip out the noise from this summer's carrier calls and earnings releases and one signal is left: the money in Medicare Advantage has finished moving from growth to margin. Carriers spent a decade buying membership with rich benefits and broad footprints. Now they are paying for it, and 2027 is the year the bill gets passed to the field. That is not a reason to sulk. Members in motion need an agent, and 2027 is going to put a lot of members in motion.

Service area reductions: 600,000 Humana members, and counting

On its July 29 earnings call, Humana said its 2027 plan and market exits will affect about 600,000 members, roughly 8% of its 7.2 million MA book. It expects to recapture around 40% into other Humana plans, the same rate it managed when it shed about 500,000 members going into 2025. Most of the exited plans sit at 3.5 stars or below, but read the driver correctly: this is a margin play. Humana has told investors it wants MA back to at least a 3% pretax margin by 2028, and it is trimming whatever does not get it there.

Humana will not be alone. UnitedHealthcare exited plans covering roughly 600,000 members for 2026 and, per an August report, is weighing 2027 exits in 34 counties across 12 states. Aetna cut about 90 plans for 2026 and has signaled another margin-first year. No other carrier has put a 2027 number on the record yet. The county-level detail lands with the plan landscape in late September, and that is when this stops being an industry story and becomes a list of your clients with names on it.

Part D: the training wheels come off January 1

The IRA redesign capped out-of-pocket drug costs ($2,000 in 2025, $2,100 this year, $2,400 in 2027) and shifted most catastrophic-phase liability onto the plans, which pay 60% of catastrophic costs now versus 15% before. Standalone drug plan bids spiked, and the last administration quietly papered over it with the Premium Stabilization Demonstration: a $15 monthly premium buydown and a $35 cap on year-over-year increases in 2025, scaled to $10 and $50 for 2026. Real money, about $9.8 billion over two years.

On July 28, CMS announced the demo dies entirely on January 1, 2027. Administrator Oz's framing is that most beneficiaries will see increases under $10 a month, and some will see decreases. CMS's own bid data tells the sharper version: roughly 75% of the 25 million standalone PDP enrollees will pay more next year, some up to $20 a month. Clients see the new number in the ANOCs that hit mailboxes in late September, two weeks before AEP opens. We took this one topic apart in full, with the plan-level mechanics and the September playbook, in 'The 2027 Part D Premium Increase' in this feed.

Watch Wellcare hardest. It is the largest PDP carrier in the country with roughly 44% of standalone drug plan membership, built on a $0-premium Value Script in many regions and a Classic plan that sits under the LIS benchmark in all 34 regions. Zero-premium pricing is exactly the position with the most ground to give back when the subsidy disappears. That is our read, not an announcement, but if it breaks that way, the benchmark and LIS membership that auto-assigned into those plans becomes the most disrupted, least-served population in the market.

One more wrinkle: most of those PDPs pay you nothing. For 2026, essentially every major PDP carrier except Cigna made standalone drug plans non-commissionable, and CMS now publishes which plans pay $0 commission. Plenty of agents have responded by walking clients through Medicare.gov self-enrollment on non-commissionable plans. It keeps the client served, but be honest about the optic: an industry arguing it deserves compensation while routing its own clients to the government portal is telling on itself. Do the service either way, and keep count of every one. That count is your advocacy story.

Stars: the scoreboard is being rebuilt mid-game

UnitedHealthcare started this in November 2024 by suing CMS over one secret-shopper phone call and winning a recalculation of its 2025 stars. The dam broke this May: a federal court in Georgia ruled for Clover Health that CMS had unlawfully included 20 measures in the star ratings, half beyond its statutory data authority and half added without rulemaking. Clover's PPO went from 3.5 to 4.5 stars on recalculation. CMS appealed, then in June announced it would voluntarily recalculate 2026 star ratings for every MA organization using only HEDIS, HOS, and CAHPS data. Elevance (with about $115 million in 2027 bonus payments at stake), SCAN, Alignment, and CareFirst have all filed follow-on suits.

The recalculation also blew up the bid calendar. CMS reopened the 2027 bid cycle in late June (resubmissions were due June 29) and gave plans until August 6 to reallocate rebate dollars. That is why this year's first looks are landing late and thin: UnitedHealthcare told brokers an abbreviated early look was all it could release, with final 2027 plan details coming mid-August after the rebid dust settles.

The practical translation: the quality bonus money that funds 2027 benefits is unsettled while carriers finalize those exact benefits, and the measures CMS lost (call center performance, medication adherence among them) can only come back through formal rulemaking. Expect more benefit conservatism, not less, and expect carriers to lean harder on the quality inputs they can still control in the field. That last part is where you come in, and it is the subject of its own write-up: see 'Carriers are grading your book' in this feed.

1. Triage your book in September, not October. When the 2027 landscape drops in late September, map every client against exited plans and counties before AEP opens. Exit letters and ANOCs land the same window; be the first call, not the cleanup crew.
2. Flag every PDP-only client now, especially anyone on a $0-premium drug plan. A $0 to $15 move is a small dollar amount and a large feeling. A 30-second heads-up call in September buys you the December review.
3. Know your county map. SARs are county-by-county surgery, not statewide events. Pull your clients by county and cross-reference the moment carrier exit lists publish.
4. Track every client you help onto a non-commissionable plan or through a SAR. Write the number down. That log is your renewal defense, your referral script, and the story that actually lands with legislators and local press.
5. Do not chase star ratings gossip with clients. Ratings on Medicare.gov may shift under recalculation; sell the plan fit, document the choice, and let the carriers fight about the scoreboard.