Independent Medicare agents should prepare for the CMS 2027 Advance Notice by diversifying their product portfolios beyond Medicare Advantage, building operational efficiency with a Medicare-specific CRM, staying close to carrier communications, and proactively reviewing client plans for disruption. With CMS projecting only a 0.09% net payment increase to MA plans — down from 5.06% in 2026 — agents who plan now will be better positioned to retain clients and write business through what could be a turbulent AEP.
If you’ve been doing this for a few years, you already know the rhythm: CMS releases numbers, carriers react, and agents deal with whatever lands on the other side. But this year’s Advance Notice has the potential to create more disruption than we’ve seen in a while. Let’s walk through what’s happening and what you can actually do about it.
What Did CMS Propose in the 2027 Advance Notice?
On January 26, 2026, CMS released the CY 2027 Advance Notice projecting a net average year-over-year payment increase of just 0.09% to Medicare Advantage plans — roughly $700 million across the entire program. That might sound like a lot of money, but spread across 35 million-plus MA enrollees, it’s essentially flat funding.
For context, the 2026 Rate Announcement finalized a 5.06% increase. The year before that, it was 3.7%. So going from 5% down to near-zero is a significant shift.
Here’s the thing — the low number isn’t just about one line item. CMS is also proposing changes to the risk adjustment model that would reduce plan payments further. First, risk model recalibration: CMS is updating the V28 risk adjustment model with more recent data (2023 diagnoses and 2024 expenditures), which alone is projected to decrease MA payments by an average of 3.32%. Additionally, CMS wants to stop counting diagnoses from audio-only telehealth encounters and unlinked chart review records in risk score calculations, projected to reduce payments by another 1.53%.
The effective growth rate is actually 4.97%, meaning healthcare costs are expected to keep rising. But after the proposed adjustments, plans are left with that razor-thin 0.09%.
The final CY 2027 Rate Announcement is expected no later than April 6, 2026. Nothing is locked in until then. But historically, the Advance Notice is a reliable signal of where things are heading.
Why Should Agents Care About Payment Rates to Carriers?
You might be thinking: “I’m not a health plan actuary — why does this matter to me?” Fair question. Here’s why it matters a lot.
When carriers receive less money from CMS, they have fewer dollars to work with. That money is what funds supplemental benefits, keeps premiums low, and allows plans to operate in certain markets. When funding gets squeezed, carriers start making hard choices. Based on what we’ve seen in prior years when rates came in lower than expected, that typically means higher monthly premiums for beneficiaries, increased cost-sharing, cuts to supplemental benefits, service area reductions, and plan exits.
Industry groups have already raised alarms. AHIP warned that “flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors’ coverage.” The Alliance of Community Health Plans called the proposed rates “disappointing and wholly unrealistic.” And according to a JAMA analysis cited by Better Medicare Alliance, nearly 3 million MA enrollees — roughly one in ten — were forced to switch plans for 2026 due to insurer exits, the highest forced disenrollment rate ever recorded.
For agents, this translates into more phone calls from confused clients, more plan reviews, and potentially more clients needing to be moved to new coverage. That’s a lot of work — but it’s also an opportunity if you’re prepared.
How Should I Diversify My Medicare Portfolio Before AEP?
This is probably the most important thing you can do right now. If your book of business is 100% Medicare Advantage, you’re fully exposed to whatever the carriers decide to do with their 2027 plans.
Diversification doesn’t mean abandoning MA. It means building a more resilient business. First, Medicare Supplement (Medigap) plans aren’t affected by CMS rate changes the way MA is. When MA plans lose benefits or pull out of markets, Med Supp becomes a natural alternative for many beneficiaries. Additionally, ancillary products — dental, vision, hearing, hospital indemnity, cancer plans — become even more relevant when MA supplemental benefits get cut. Finally, if more clients end up on Original Medicare plus a supplement, they’ll need standalone Part D. Make sure you’re contracted and up to speed.
The agents who weather disruption best are the ones who can say, “Here’s what happened to your plan, and here are three solid options we can look at together.” That only works if you have the contracts and knowledge ahead of time.
What Can I Do Right Now to Get Operationally Ready?
Disruption creates volume. More clients calling, more plan changes, more paperwork. If your systems aren’t tight, you’ll feel it.
First, get your CRM in order. If you don’t have one — or if you’re using spreadsheets and sticky notes — this is the year to change that. A Medicare-specific CRM lets you track client plans, set review reminders, automate follow-up, and stay organized when things get hectic. At TMS, we give agents access to our free Medicare CRM built specifically for this kind of workflow.
Additionally, segment your book of business. Identify which clients are on MA plans in markets that could be at risk. Look at carriers that have already signaled instability. Prioritize those clients for early outreach. Furthermore, automate what you can — birthday emails, AEP reminders, policy review check-ins. Finally, start outreach early. You don’t have to wait until October. A simple call or email — “I’m keeping an eye on some changes that might affect your plan” — goes a long way in building trust.
How Do I Stay on Top of Carrier and CMS News?
You’ve probably seen this — a carrier quietly exits a county, or a plan you’ve been writing suddenly changes its benefit structure, and you find out after your clients do. That’s a terrible position to be in.
Staying informed is part of the job, but it doesn’t have to be overwhelming. Follow CMS announcements directly — the Rate Announcement expected by April 6 will give us the finalized numbers. Pay attention to your FMO’s communications — a good FMO doesn’t just forward you a PDF, they break down what’s happening and what you should do about it. Listen to industry podcasts — we cover this regularly on the Medicare Agent IQ podcast. And talk to other agents — sometimes the best intel comes from the person down the road.
Why Does Your FMO Relationship Matter More in a Disruption Year?
Here’s the thing — when the market is stable and plans are flush with benefits, almost any FMO arrangement works fine. But when CMS tightens the screws and carriers start cutting, the cracks in a weak FMO relationship show fast.
You need timely, plain-English updates on what’s happening with rates and market shifts. You need tools that help you manage disruption — a CRM that flags at-risk clients, marketing support to drive retention outreach. You need access to a broad carrier portfolio so you can pivot when a plan exits your market. And you need someone who picks up the phone when you need help.
This is what we built TMS around. Our training philosophy isn’t “here’s a webinar, good luck.” It’s ongoing coaching, real support from an Agent Success Manager, and technology that actually fits your workflow. We also offer up to $900 per month in marketing reimbursement through our Brokerage Bucks program.
If you’ve been thinking about whether your current FMO is set up to support you through a year like this, it’s a fair question to ask. And if you’re curious about how to switch FMOs safely without disrupting your book, we’ve written about that process in detail.
What’s the Bottom Line for 2027 Planning?
The CMS 2027 Advance Notice signals a challenging year ahead for Medicare Advantage. Flat funding, risk adjustment tightening, and rising healthcare costs are likely to squeeze carriers — and that pressure flows downhill to agents and their clients.
But disruption isn’t the same as disaster. Agents who prepare now — diversifying their portfolios, tightening their operations, staying informed, and building strong FMO partnerships — will be the ones who come through AEP 2027 stronger.
The final Rate Announcement is coming by April 6. Between now and then, use this window to get your house in order.
If you want to talk through what this means for your specific book of business, or you’re curious about what TMS can offer heading into a year like this, we’re happy to have that conversation. No pressure — just a straight look at where things stand and how we can help.
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