What's changing with Medicare Advantage plans in 2027

Patrice King Brown: Whether you’re new to Medicare, exploring your options, or just want to keep up with the latest in Medicare news, we’ve got you covered.

Stacy Smith: No fluff, no jargon. Just real conversations to help you navigate Medicare with confidence. I’m Stacy Smith.

Patrice King Brown: And I’m Patrice King Brown. Welcome to “Medicare for the Record,” brought to you by UPMC for Life.

Hello, and welcome to season 2 of “Medicare for the Record,” where you will learn more about Medicare Advantage plans.

Stacy Smith: And there is a lot to learn. Medicare Advantage is always in the news. If you've seen the headlines about Medicare Advantage plans, prescription drug coverage, prior authorizations, and provider networks, you may be wondering what it can mean for you. Well, each year there are challenges that affect Medicare, and 2027 is shaping up to bring significant industrywide changes. In today's episode, we'll break down some of the important things Medicare beneficiaries should know before choosing a plan for 2027 and also explain how to make informed decisions about the Annual Enrollment Period.

Patrice King Brown: Emily Saunders is our guest today. Emily is the Senior Director of Medicare Operations Performance Management at UPMC Health Plan. She has more than 15 years’ experience with UPMC Health Plan with a focus on Medicare Advantage operations, on strategy, and product performance. She is a western Pennsylvania native who has spent her career serving this region. Emily, welcome.

Emily Saunders: Thank you so much for having me today. I'm excited to be here. As you said, I'm the Senior Director of Medicare Operations Performance Management, which means I get to lead a team of incredibly talented and passionate individuals focused on Medicare performance and operational excellence. So, improving our outcomes for our beneficiaries and our members. Like you said, I have 15 years of experience with UPMC. I've worked on both the hospital care delivery side and now on the health insurance side. I've spent the past eight years supporting UPMC for Life, which is our Medicare products.

Stacy Smith: Emily, a couple of moments ago, I said that Medicare Advantage is always in the news and has been even more so this year. Why is that?

Emily Saunders: You're right. We do see Medicare in the news quite a bit. There's several reasons for that. First, Medicare is growing. So we have an aging population. The baby boomer generation continues to age into Medicare. We also see that Medicare Advantage is continuing to be the most popular way that members are getting Medicare benefits. So over 50 percent of people who are eligible for Medicare are receiving coverage through a Medicare Advantage plan. There's also a number of changes happening industrywide.

Patrice King Brown: That's what I was going to ask you. What are some of the biggest changes?

Emily Saunders: Yeah, we see rising costs. We also see increased government oversight, changes to our quality star ratings, changes to how the prescription drug program is working, and all of those have impacts to consumers. So we—this year and every year—encourage members to make sure they're looking at their plan and understanding how those changes may impact them.

Stacy Smith: You mentioned there are changes coming in the Medicare star ratings. What are the changes?

Emily Saunders: Right. So the Medicare star ratings program, first off, is how Medicare ranks plans by quality. And it's an important way for beneficiaries to understand if they're joining a quality plan or not. It's a five-star program, one star being poor quality, five star being the highest quality. It's comprised of over 40 different metrics, and there are changes to those metrics happening next year. We see some metrics being removed, which are focused on more administrative functions, and a focus on metrics focused on clinical outcomes, patient experience. We are also seeing new metrics being added, including metrics focused on behavioral health and depression screenings.

Stacy Smith: How important are the ratings when you try to choose a plan?

Emily Saunders: That's a great question, Stacy. When you're looking at a plan, a five star is an excellent plan. You may also find a four- or four-and-a-half-star plan that also meets your needs.  While the quality program is an important aspect of choosing a plan, you should also be reviewing the benefits and what coverage they're offering, what is the provider network, what medications are offered on their formulary, to ensure that the plan is meeting all of your needs.

Stacy Smith: There's been a lot of talk about changes to prior authorizations. What are the changes?

Emily Saunders: Prior authorizations continue to be a focus for health plans across the country. The purpose of prior authorizations is to ensure that care is medically necessary. And the current system can introduce delays for patients and also create excessive paperwork for providers. So starting in January 2027, all health plans will be moving to a standardized electronic prior authorization process. This will be important to help speed up the process with real-time approvals and clinical denials, which require explanation on the denial, as well as helping to transition information if members change plans.

Patrice King Brown: There are several though, I understand, that may be leaving markets—some plans that are no longer servicing some markets, leaving markets, or cutting benefits. Is this cost related?

Emily Saunders: It can be cost related. Some of the changes that we've seen across the industry are rising trends. So we have seen hospital care, outpatient care, prescription drug coverage, all increasing in costs across the country. And as a result, we are seeing plans adjusting supplemental benefits in either what they're offering or in the way that they can be utilized, adjusting other benefits, cost shares for members, or leaving markets entirely. And so it's important for members to understand their current plan and how they might have changes in the coming year.

Patrice King Brown: Yeah. Also, what about the prescription drug changes to some of these plans?

Emily Saunders: So prescription drug coverage has been changing rapidly over the past several years. The Inflation Reduction Act of 2022 was passed, which made some sweeping changes to the Part D prescription drug program. So first, it closed the coverage gap phase, commonly known as “the donut hole.” It also reduced annual out-of-pocket costs for members, and it removed cost sharing for members in the catastrophic coverage phase. These are important to help provide financial predictability and protection for members, especially those taking expensive medications.

Patrice King Brown: That made sure that limit is consistent between plans?

Emily Saunders: Correct. So all plans that are providing Medicare coverage are following the rules outlaid in the Inflation Reduction Act.

Stacy Smith: Trying to choose a plan is a very difficult choice for a lot of people. It can be overwhelming at times. So what advice would you give people when they're trying to choose a plan for 2027?

Emily Saunders: So it's important to understand that picking a plan is a personal choice. And so you need to be considering what your health needs are, as well as what you anticipate your health needs will be in the upcoming year. There are a couple of important resources that members can utilize. The first is their Annual Notice of Change, ANOC for short. This will be sent to members by the end of September. It's a document that lists all changes that are occurring to their plan in the coming year. So we encourage members to review that document very carefully to understand how their plan might be changing. We're also coming into a very important time for Medicare. The Annual Enrollment Period begins October 15th and runs through December 7th. That is the time each year where members can review the market to understand what plans are available in their area and select one that best fits their health needs.

Patrice King Brown: Still a lot to do.

Stacy Smith: Yep.

Patrice King Brown: Emily, thank you very much for joining us and thank you for sharing your expertise. It's good information.

Emily Saunders: Thank you for having me.

Patrice King Brown: We have a few things we'd like you to take away from our conversation today. Prescription drug changes continue to be introduced from the Inflation Reduction Act of 2022. Make sure you review your drug coverage each and every year. And your Annual Notice of Change will be coming by October 1st, 2026, this year.

Stacy Smith: Also, the best plan for you depends on your personal health and budget needs. For more information, you can visit medicare.gov, cms.gov, or the UPMC for Life website, which is upmchealthplan.com/medicare.

Patrice King Brown: Emily, we'd like to thank you for joining us, and we thank you for joining us as well. And hope you'll tune in next time for “Medicare for the Record.”

Thanks for tuning in to “Medicare for the Record,” brought to you by UPMC for Life. To learn more about your Medicare options, visit upmchealthplan.com/fortherecord.

This podcast is provided for general informational and educational purposes only. It is not medical care or advice. For questions regarding medical care, please consult with your healthcare provider. Views and opinions expressed by the participants are solely their own and do not necessarily reflect those of UPMC Health Plan, its subsidiaries, parents, or affiliates.