As health care costs continue to rise faster than inflation, Washington is proposing to keep Medicare Advantage funding essentially flat, raising concerns that seniors could face rising out-of-pocket costs and cuts in benefits.
Experts warn that the Centers for Medicare and Medicaid Services’ proposal to effectively freeze Medicare Advantage plan reimbursements in 2027 — allowing a 0.09 percent increase — will lead to a “silent crisis” amid a nationwide debate about affordability ahead of the midterm elections.
The 0.09 percent proposal comes as the price of hospital services increased by more than 280 percent, three times as fast as national inflation from 2000 to 2025, according to an analysis of Bureau of Labor Statistics data.
Experts warn that 30 million seniors could soon feel the pinch if CMS’s 2027 proposal for Medicare Advantage plans is finalized in April.
“Benefits that matter deeply to seniors — from hearing aids to dental care and meal services — are often the first to go when plans are forced to cut,” said Saul Anuzis, president of the 60 Plus Association. “Should the 2027 cut take effect, the impact of the Biden-era cuts will only intensify. This will leave seniors and their families facing fewer choices and eroding benefits.”
He’s not alone.
The Wall Street Journal editorial board recently opined on what it called the hypocrisy of CMS’s preliminary estimate on private-sector managed Medicare Advantage compared to its projections for traditional Medicare. The board noted that CMS projected Medicare spending would increase 8 percent in 2025 and 9 percent in 2026 and reported it is growing even faster, at 11 percent this year.
During the Biden administration, CMS reduced payments to Medicare Advantage plan administrators for 2024 and 2025. Those decisions led to fewer benefits for seniors, reductions in the number of plans offered in certain markets and higher costs, critics say. CMS also amended policies to reduce reimbursements for certain care categories. In 2026, CMS increased payments per Medicare Advantage plan member by 5 percent.
A move to cut Medicare Advantage plan reimbursements in 2027 has some state lawmakers warning about the impact.
“Discussions about cuts or changes to Medicare Advantage are often framed as minor. However, for seniors, the impact is anything but small,” New York Assemblyman Scott Bendett said. “When funding is reduced or rules tighten, then plans have fewer options. That usually translates to fewer choices and higher costs for seniors.”
The CMS proposal comes at a challenging time for Republicans, who are fighting to hold the U.S. House amid Americans’ concerns about affordability and rising prices. In the 2024 election, nearly a third of voters — 30 percent — were 65 or older, accounting for about 40 million votes, according to data from the PRRI 2024 Post-Election Survey.
Concerns have been raised that the Medicare Payment Advisory Commission, a federal advisory board that advises Congress on Medicare Advantage payment rates, has a left-leaning ideological tilt. Critics point to Stacie B. Dusetzina, a Vanderbilt University professor who supported the Biden administration’s Inflation Reduction Act and has advocated for single-payer health care policies.
Fox News has also reported that the Congressional Budget Office’s Health Analysis Division — which produces reports on policy issues and estimates proposed changes in health care programs such as Medicare Advantage — includes Democrats or Democratic donors.
As President Trump hits the campaign trail to tout his administration’s successes in slowing inflation and increasing wages, the comment period on Medicare Advantage benefit and payment parameters for 2027 is underway.
Convincing voters that the administration is lowering health care costs, particularly for politically engaged seniors, could be key to the outcome in November.
