The Centers for Medicare and Medicaid Services published its final 2027 Medicare Advantage and Part D payment rule on April 2. The rule introduces significant changes to star ratings, supplemental benefits administration, Part D drug coverage, and a range of deregulatory provisions. It takes effect on June 1 and applies to coverage beginning in 2027.
Here is a breakdown of the ten most important changes payers and health plans need to know.
What the 2027 Final Rule Covers
The final rule touches nearly every major pillar of Medicare Advantage program design. CMS made sweeping adjustments to quality measurement, plan administration, and enrollee protections. Moreover, several Biden-era health equity mandates did not survive the rule’s finalization. Payers now face a reshaped compliance landscape heading into plan year 2027.
Star Ratings Overhaul Under the New Rule
Health Equity Index Eliminated
CMS did not implement the Excellent Health Outcomes for All reward — previously called the Health Equity Index — which had been finalized under the Biden administration. Instead, CMS will continue using the historical reward factor. This factor incentivizes high performance across all enrollees and all quality measures.
Eleven Measures Removed
CMS finalized the removal of 11 star ratings measures. The agency characterized these as focused on administrative processes or areas with little variation meaningful to beneficiaries. Originally, CMS proposed removing 12 measures. However, it retained the “diabetes care – eye exam” measure following the public comment period. Most removals take effect with the 2027 measurement period and appear in 2029 star ratings.
CMS estimates these changes will carry a net impact of $18.6 billion on the Medicare Trust Fund from 2027 through 2036. That equals approximately 0.21% of Medicare payments to insurers.
New Depression Screening Measure Added
CMS adds a new MA depression screening and follow-up measure to close behavioral health gaps. This measure begins with the 2027 measurement year and shows up in 2029 star ratings.
Part D Coverage Changes Codified
CMS codified Part D changes originally enacted under the Inflation Reduction Act. These include:
- Elimination of the coverage gap, already in effect since 2025
- A $2,000 annual out-of-pocket cap for enrollees
- Zero cost sharing in the catastrophic coverage phase
- The Manufacturer Discount Program, replacing the old Coverage Gap Discount Program
These protections now carry formal regulatory standing, adding permanence beyond statutory language alone.
Supplemental Benefits Get New Guardrails
Debit Card Rules Tightened
CMS finalized guardrails for supplemental benefit debit cards. Plans that use debit cards must link them to a real-time point-of-sale verification mechanism. Additionally, card use must be limited to the specific plan year. A proposed ban on marketing the dollar value of supplemental benefits was not finalized.
Eligibility Criteria Must Be Public
CMS finalized a requirement that plans publicly post their eligibility criteria for special supplemental benefits for the chronically ill. Furthermore, the rule clarifies that cannabis products illegal under state or federal law do not qualify as SSBCI benefits.
Health Equity Requirements Rolled Back
CMS finalized four notable health equity rollbacks. First, utilization management committees no longer need to include a health equity expert member. Second, they no longer need to conduct or publicly post annual health equity analyses. Third, MA quality improvement programs no longer must include activities specifically designed to reduce health disparities. Fourth, CMS rescinded the requirement for plans to send mid-year notices reminding enrollees of unused supplemental benefits.
These rollbacks represent a clear departure from the health equity priorities of the prior administration.
Account-Based Plans and Broker Rules Updated
Account-based plans — including health reimbursement arrangements, flexible spending accounts, and health savings accounts — are now exempt from creditable coverage disclosure requirements. Moreover, CMS removed restrictions on the time and manner that beneficiaries can hold conversations with agents and brokers. This change gives plans and agents greater flexibility in how they engage with potential enrollees.
Key Proposals CMS Did Not Finalize
Not every proposed change made it into the final rule. CMS did not finalize a proposed special enrollment period. That provision would have let enrollees switch plans when their provider leaves their MA network. CMS cited broad interest in the topic and said it will consider it in future rulemaking.
What Comes Next for Payers
Three requests for information from the proposed rule generated substantial comments. CMS says it will consider these for future rulemaking. The topics include:
- Risk adjustment modernization, including a model potentially using artificial intelligence
- Enrollment growth of dually eligible individuals in C-SNPs over D-SNPs
- Policies supporting enrollee wellbeing, nutrition, and preventive care
CMS received more than 42,000 comments on the proposed rule overall. That level of response signals the deep industry interest in MA’s direction heading into 2027 and beyond.
