The Centers for Medicare and Medicaid Services (CMS) has issued its final rule for Contract Year 2027, reversing several key Biden-era marketing and oversight regulations for Medicare Advantage (MA) plans. Furthermore, the agency sharply increased payment rates after intense lobbying from the insurance industry. Advocates say the rollback puts profits before patients. Meanwhile, the insurance industry has welcomed the move with open arms — and rising stock prices.
What Did CMS Change in the Final Rule?
On April 2, 2026, CMS issued a final rule for 2027 that reversed numerous consumer protection measures previously enacted under the Biden administration. CMS had proposed these changes in December 2025, and the final rule closely followed what the industry had requested.
The final rule was almost exactly what plans wanted. A review of lobbying letters shows the largest Medicare Advantage insurers and lobbying groups specifically pressured the Trump administration to act in their favor.
Additionally, the agency moved to simplify the MA star ratings system — a change that carries enormous financial implications for insurers.
Marketing Rules Removed for MA Plans
Biden-Era Restrictions Are Gone
Under the Biden administration, CMS had introduced strict guardrails on how Medicare Advantage plans market their products. On November 28, 2025, CMS proposed a rule that would relax several of the 2023 and 2024 marketing oversight measures. The final April 2026 rule largely finalized those rollbacks.
What Agents and Brokers Can Now Do
The proposed rule removed time and manner restrictions on marketing by MA plan agents and brokers at educational events, reduced retention of call recordings from 10 to six years, and removed the annual mid-year notice for unused supplemental benefits.
Fewer Compliance Requirements
For agents, the compliance burden is reduced, and educational events now have equal value to both agents and their clients and prospects. This is a significant shift. Previously, agents faced strict limits on how they could promote plans at events designated as “educational.”
The CY2025 Final Rule had prohibited contract terms between MA plans and third-party marketing organizations (TPMOs) that incentivized volume-based steering. A federal judge in Texas vacated these key provisions in August 2025, ruling that CMS had overstepped its statutory authority. The 2027 final rule now codifies this lighter regulatory posture across the board.
Health Equity Requirements Eliminated
Diversity Initiatives Dropped
Beyond marketing, CMS also walked back several health equity mandates that had been central to Biden-era Medicare Advantage oversight. The final rule eliminates the requirement for MA quality improvement programs to include activities that reduce health disparities.
Utilization Management Changes
The rule also eliminates health equity requirements for MA Utilization Management Committees, including requiring a health equity expert member, conducting annual health equity analyses, and publicly posting these analyses.
Star Ratings Overhauled
Regulators eliminated 11 star ratings metrics measuring administrative processes on which plans perform similarly. The agency also did not implement a new health equity award put in place by the Biden administration — called the “health equity index” — that was set to kick in next year.
These changes mean MA plans will now find it easier to achieve higher star ratings, which directly increases the bonus payments they receive from the federal government.
Payment Rates Rise After Industry Pressure
From 0.09% to 2.48%
One of the most dramatic changes in the final rule involves payment rates. CMS originally proposed a 0.09% rate increase, but bumped it up following industry pushback. The final rule sets the increase at 2.48%, which CMS said equates to about $13 billion in additional payments to plans for the coming plan year.
Insurers Celebrated Immediately
After CMS posted the final rule, major Medicare Advantage insurers’ stocks soared. The jump reflected Wall Street’s confidence that the rule strongly favored the industry.
Star Ratings Add More Billions
The star ratings overhaul compounds the financial boost. The final regulation is significantly more beneficial for the insurance industry than originally expected. CMS previously estimated the star ratings changes would cost $13.2 billion between 2028 and 2036 when the rule was proposed in November. The final version is even more generous to insurers than the proposal.
Court Had Already Weakened Biden-Era Rules
A Texas Judge’s August 2025 Ruling
The regulatory rollback did not start with the final rule. In August 2025, a federal judge in Texas dealt a significant blow to efforts to reform Medicare Advantage and Part D marketing misconduct, vacating key provisions of a rule designed to align agent and broker compensation with beneficiary health needs.
What the Court Said
The district court ruled that CMS overstepped its statutory authority and violated the Administrative Procedure Act. The judge found that CMS lacked the authority to set compensation price caps for agents and brokers. This ruling opened the door for TPMOs to continue offering volume-based incentives and flexible compensation structures.
Data Consent Remains Non-Negotiable
Despite the ruling, one important protection survived. Beneficiary data cannot be shared without consent, and that remains non-negotiable. MA plans and TPMOs must still obtain prior written consent before sharing personal beneficiary information with other organizations.
What Critics Are Saying
Advocacy groups and patient protection organizations are sharply critical of the direction CMS has taken. As one analyst put it, President Trump and his health leaders have repeatedly directed their ire toward health insurance companies, yet almost every major decision Trump officials have made since reclaiming the White House has benefited insurers and their bottom lines.
The Center for Medicare Advocacy noted that the Medicare Advantage program needs more oversight, not less, and that policy decisions should be driven by what is best for Medicare beneficiaries — not the interests of insurance companies, their shareholders, and those who sell their products.
Critics also warn that the rollback of marketing guardrails revives a troubling pattern. The practices that triggered the Biden-era rule included agents and brokers receiving gifts and extra payments in exchange for enrollments, which had been framed as allowable administrative add-ons. CMS also documented inflated payments for agent training, excessive payments for health risk assessments tied to particular plans, and the provision of agent leads based on enrolling beneficiaries into specific plans regardless of their health care needs.
What This Means for Beneficiaries
Fewer Protections in the Marketplace
For Medicare beneficiaries, the practical implications of the rollback are significant. Without mid-year notices, many enrollees may remain unaware of supplemental benefits they have earned but never used. Without health equity analyses, vulnerable populations — including dually eligible individuals and people with disabilities — may face compounding disadvantages in accessing care.
Targeting of vulnerable populations, including individuals who are dually eligible for Medicare and Medicaid, remains a concern among patient advocates.
What Comes Next
This decision significantly constrains CMS’s ability to address marketing misconduct through regulation. More comprehensive reforms may require Congressional action. Until then, beneficiaries must navigate the marketplace with greater caution.
Agents and brokers, for their part, still face scrutiny. Improper broker arrangements were identified as a 2025 focus area by the whistleblower bar and the US Department of Justice. Compliance remains critical even as formal regulations are loosened.
Conclusion
The CMS final rule for Contract Year 2027 marks a sharp pivot away from the marketing oversight and consumer protection reforms that defined the Biden years. Insurers won higher payment rates, simpler star ratings, and fewer marketing restrictions. Health equity requirements were stripped out. A federal court had already set the stage by vacating key broker compensation rules in 2025. Together, these developments represent a major win for the Medicare Advantage industry — and a significant rollback of protections for the millions of Americans who depend on these plans.
Whether Congress steps in to fill the regulatory void remains to be seen.
