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Medicare Advantage Plans Explained (2027): How They Work, Costs and Rules

By Brian Monahan Updated November 8, 2026

Reviewed November 8, 2026. Medicare Advantage (Part C) plans are Medicare-approved health plans from private insurance companies that you can choose instead of Original Medicare. They must cover everything Original Medicare covers, most include Part D drug coverage, and many add extras like dental or vision, but they usually use provider networks, can require prior authorization, and set their own copays up to a yearly out-of-pocket limit.

Quick answer: With Medicare Advantage you still pay your Part B premium ($202.90 a month in 2026; the 2027 amount isn’t out yet), plus any plan premium. In exchange, you get one plan that bundles hospital, medical and usually drug coverage, with a cap on yearly medical costs. For 2027, CMS projects the average Medicare Advantage premium will fall to $12.00 a month. You can join or switch plans during Open Enrollment, October 15 to December 7, 2026, for coverage starting January 1, 2027.

What is a Medicare Advantage plan?

Medicare Advantage, also called Part C, is a way to get your Medicare benefits through a private company that contracts with Medicare. Instead of Medicare paying your doctors and hospitals directly (Original Medicare), the plan does. You still have Medicare, and you still keep Part A and Part B, but the plan’s rules decide which providers you use and what you pay at each visit.

To join, you generally need Part A and Part B and must live in the plan’s service area. Plans are offered by county, so the choices, premiums and benefits available to you depend on where you live. CMS expects about 34 million people, roughly 47.4% of people with Medicare, to be enrolled in Medicare Advantage in 2027. For a shorter primer on the basics, see What is Medicare Part C?

Types of Medicare Advantage plans

Medicare.gov groups Medicare Advantage plans into these main types. The type affects which doctors you can see and whether you need referrals.

Plan type	Network rules	Specialist referrals	Drug coverage
HMO (Health Maintenance Organization)	Generally must use in-network providers, except emergency care, urgent care and out-of-area dialysis. HMO Point-of-Service (HMO-POS) plans may cover some out-of-network care at a higher cost.	Usually required	Usually included
PPO (Preferred Provider Organization)	Has a network, but you can go out of network, usually for a higher cost.	Not required	Usually included
PFFS (Private Fee-for-Service)	Any Medicare-approved provider who accepts the plan’s payment terms and agrees to treat you. Some PFFS plans have networks.	Not required	Sometimes included; if not, you can join a separate Part D plan
SNP (Special Needs Plan)	Depends on the SNP. Limited to people with certain chronic conditions, people who live in an institution, or people with both Medicare and Medicaid.	Depends on the SNP	Always included; all SNPs must offer Part D
MSA (Medical Savings Account)	Generally no network. A high-deductible plan paired with a savings account Medicare deposits money into.	Not required	Not included; you join a separate Part D plan

HMOs and PPOs are by far the most common choices. Our guide to Medicare Advantage HMO vs PPO explains the trade-offs in more detail.

What Medicare Advantage covers

Every Medicare Advantage plan must cover the medically necessary services Original Medicare covers, including hospital stays, doctor visits, outpatient care, lab tests and preventive services. Plans can charge different copays than Original Medicare, and they may require you to use network providers or get approval first.

Drug coverage

Most Medicare Advantage plans include Part D prescription drug coverage (an MA-PD plan). Under 2027 rules on Medicare.gov, no Medicare drug plan can have a deductible above $700, and your out-of-pocket costs for covered Part D drugs are capped at $2,400 for the year (up from $2,100 in 2026). Check each plan’s formulary to confirm your drugs are on it.

Extra benefits

Many plans add benefits Original Medicare doesn’t cover, such as some dental, vision and hearing care, fitness programs, or over-the-counter allowances. CMS expects these supplemental benefits to remain stable in 2027. Extras are not guaranteed, though: they vary by plan and county, often have annual dollar limits or network rules, and can change each year. Read the plan’s Summary of Benefits and Evidence of Coverage before you rely on any extra. For an example of how one carrier structures its extras, see Clover Health Medicare Advantage extra benefits for 2027.

What Medicare Advantage costs

Part B premium: You keep paying it. The standard Part B premium is $202.90 a month in 2026, per CMS. The 2027 amount has not been announced yet. Some plans help pay part of your Part B premium, but this isn’t available everywhere.
Plan premium: Some plans charge a monthly premium on top of Part B; many have a $0 plan premium. CMS projects the average Medicare Advantage premium will drop from $14.37 a month in 2026 to $12.00 in 2027, and the average Part D portion of MA-PD premiums from $11.32 to about $7.
Deductibles, copays and coinsurance: Each plan sets its own, and they can differ from Original Medicare. Plans can change these only once a year, effective January 1.
Yearly out-of-pocket limit: Every plan has a yearly limit on what you pay for covered Medicare services. Once you reach it, the plan pays 100% of covered services for the rest of the year. The limit varies by plan. Find each plan’s limit in its Summary of Benefits.
Out-of-network care: In an HMO, non-emergency care outside the network may not be covered at all. In a PPO it usually costs more.

For the full list of 2026 Part A, Part B and IRMAA amounts, see our 2026 Medicare costs page.

Networks, referrals and prior authorization

The biggest practical difference from Original Medicare is the network. Original Medicare lets you use any doctor or hospital that takes Medicare anywhere in the U.S. With Medicare Advantage, you may need to use providers in the plan’s network and service area, and networks can change during the year. Before you enroll, look up your doctors, hospitals and pharmacies in the plan’s directory and call the offices to confirm.

Medicare Advantage plans may also require prior authorization, meaning the plan must approve certain services or supplies before it will pay. Original Medicare usually doesn’t require this for covered services. If a plan denies a request, you have the right to appeal. Emergency and urgent care are covered even outside the network.

Medicare Advantage vs Original Medicare with Medigap

Feature	Medicare Advantage (Part C)	Original Medicare + Medigap + Part D
Doctor choice	Usually a network and service area	Any provider that accepts Medicare, nationwide
Specialist referrals	May be required (common in HMOs)	Usually not required
Prior authorization	May be required for certain services	Usually not required for covered services
Monthly premiums	Part B premium plus plan premium (often $0)	Part B premium plus Medigap premium plus Part D premium
Costs when you get care	Plan copays and coinsurance	Low or none, depending on the Medigap plan
Yearly limit on medical costs	Yes, set by each plan	Original Medicare has none; Medigap fills most or all gaps
Drug coverage	Usually built in	Separate Part D plan
Dental, vision, hearing extras	Often included, with limits	Generally not covered
Travel outside the U.S.	Generally not covered; some plans add emergency coverage	Many Medigap plans pay 80% of foreign travel emergencies, up to plan limits
Switching later	Can change plans during Open Enrollment each year	Medigap may require health questions after your 6-month Medigap Open Enrollment Period

You generally can’t buy or use a Medigap policy while you are in a Medicare Advantage plan. If you think you may want Medigap later, know that outside your Medigap Open Enrollment Period or a guaranteed issue situation, an insurer can review your health and may charge more or decline you. See Medigap Plan G benefits for 2027 for what the most popular Medigap plan covers, and pros and cons of Medicare Advantage plans for a deeper look at the trade-offs.

When you can join, switch or drop a plan

Initial Enrollment Period: The 7-month window around your 65th birthday: 3 months before the month you turn 65, that month, and 3 months after.
Open Enrollment Period: October 15 to December 7 each year. You can join, switch or drop a Medicare Advantage or Part D plan. For 2027 coverage, the plan must get your request by December 7, 2026, and coverage starts January 1, 2027.
Medicare Advantage Open Enrollment Period: January 1 to March 31, only if you are already in a Medicare Advantage plan (new enrollees get the first 3 months they have both Part A and Part B). You can switch to another Medicare Advantage plan, or drop your plan and go back to Original Medicare and join a separate drug plan. You can make only one change during this period each year.
Special Enrollment Periods: Available after certain life events, such as moving, losing other coverage, or getting Medicaid or Extra Help.
5-star Special Enrollment Period: If a plan with an overall 5-star rating serves your area, you can switch into it once between December 8 of the year before the plan year and November 30 of the plan year.

Our Medicare Open Enrollment guide covers what to review before December 7.

What’s changing for Medicare Advantage in 2027

These points come from CMS announcements published in 2026:

Lower average premiums: CMS projects the average Medicare Advantage premium will fall 16.5%, from $14.37 a month in 2026 to $12.00 in 2027 (September 28, 2026 announcement).
Similar plan choice: About 5,532 Medicare Advantage plans will be offered nationally in 2027, compared with 5,553 in 2026. CMS says more than 99% of people with Medicare have at least one plan available, and about 8 in 10 current enrollees can stay in their plan with the same or a lower premium.
Higher Part D cap: The yearly out-of-pocket cap for covered Part D drugs rises to $2,400 in 2027, and the maximum Part D deductible rises to $700.
2027 Star Ratings: Released October 8, 2026. About 37% of Medicare Advantage plans with drug coverage (188 contracts) earned 4 stars or higher, about 71% of MA-PD enrollees are in contracts rated 4 stars or higher, and 15 MA-PD contracts carry Medicare Plan Finder’s high-performing icon. The enrollment-weighted average rating is 3.99 stars.
Supplemental benefit debit cards: The CY 2027 final rule clarifies rules for debit cards plans use to deliver supplemental benefits, so enrollees receive the actual covered benefits.
Star Ratings measures: The same rule streamlines the Star Ratings measure set and adds a depression screening and follow-up measure.

Even if the averages look good, your own plan may have changed its premium, copays, network or drug list. Read the Annual Notice of Change (ANOC) your plan sent in the fall. For more on comparing carriers, see best Medicare Advantage plans for 2027 and our look at Humana Medicare Advantage plans for 2027.

How to choose a Medicare Advantage plan

List your doctors, hospitals, pharmacies and prescriptions.
Enter them into the Medicare Plan Finder to see plans in your ZIP code with estimated drug costs.
Compare each plan’s yearly out-of-pocket limit, not just the premium. A $0 premium plan with high copays can cost more if you need a lot of care.
Confirm the network with each provider’s office, and check which services need prior authorization.
Review the Star Rating and read the Summary of Benefits and Evidence of Coverage for the extras you care about.

Free, unbiased one-on-one help is also available from your State Health Insurance Assistance Program (SHIP) or by calling 1-800-MEDICARE.

Frequently asked questions

Is Medicare Advantage the same as Part C?

Yes. Medicare Part C and Medicare Advantage are two names for the same thing: Medicare-approved plans from private companies that replace Original Medicare as the way you get your Part A and Part B benefits.

Do I still pay the Part B premium with a Medicare Advantage plan?

Yes. You must keep paying your Part B premium ($202.90 a month standard in 2026) plus any plan premium. Some plans help pay part of the Part B premium in certain areas.

Do Medicare Advantage plans have an out-of-pocket maximum?

Yes. Every plan has a yearly limit on what you pay for covered Medicare services, and the amount varies by plan. Original Medicare has no such limit unless you add supplemental coverage like Medigap.

Can I have Medicare Advantage and Medigap at the same time?

Generally no. Medigap only works with Original Medicare. If you leave a Medicare Advantage plan, you may be able to buy Medigap, but outside guaranteed issue situations the insurer can review your health. See how to switch from Medicare Advantage to Medigap.

Can I leave my Medicare Advantage plan after I join?

Yes, during Open Enrollment (October 15 to December 7), the Medicare Advantage Open Enrollment Period (January 1 to March 31, one change), or a Special Enrollment Period if you qualify.

Are dental, vision and hearing always included?

No. Many plans include some dental, vision or hearing coverage, but it varies by plan and county and often has yearly limits. Check the plan’s Evidence of Coverage for exact benefits.