Medicare Advantage 2027: How to Compare Drug, Provider, and Out-of-Pocket Changes

Information checked: 2026-09-09 · Maintenance label: Annual variable values

Medicare Advantage plans reset every year. Drug lists change, provider networks change, and the out-of-pocket maximum changes, and none of that shows up in the monthly premium that most comparisons lead with.

Open Enrollment runs 15 October to 7 December, with changes effective 1 January, so the comparison work belongs in October and November.

This guide covers the three things that actually change your annual cost, and how the plan types differ on the rules that matter when you are ill rather than when you are enrolling.

Key takeaway

Compare three things before the premium: whether your drugs are still covered and at what tier, whether your doctors and hospitals are still in network, and what the out-of-pocket maximum is. Medicare Advantage plans have a yearly out-of-pocket limit and Original Medicare does not, which is the structural difference worth understanding first.

Table of contents

• The out-of-pocket maximum, and why it exists
• The plan types differ on rules, not just price
• The three checks that decide your annual cost
• Reading the annual notice
• Comparing without a sales conversation
• Frequently asked questions
• Summary

Related guides

• Medicare Open Enrollment 2026: Dates, Plan Changes, and What to Review — The enrollment window for making the change
• Medicare Part D Deductible 2027: Costs, Coverage Stages, and Plan Checks — The drug cost structure behind the comparison
• Medigap Open Enrollment: When You Have Guaranteed-Issue Rights — The alternative route, and the window that closes

The out-of-pocket maximum, and why it exists

A Medicare Advantage plan includes a yearly out-of-pocket limit. Medicare describes the effect directly: “Once you pay the plan's limit, the plan pays 100% of your covered health services for the rest of the calendar year.”

Original Medicare has no equivalent. Medicare states there is “no yearly limit on what you pay out-of-pocket, unless you have supplemental coverage, like a Medicare Supplement Insurance (Medigap) policy, or you join a Medicare Advantage Plan.”

The exposure is not theoretical. Under Original Medicare, after day 150 of an inpatient hospital stay you pay all costs, and after 100 days in a skilled nursing facility you pay all costs.

So the out-of-pocket maximum is the single most important number in a Medicare Advantage comparison, and it is the one least often quoted in advertising.

Compare with your own drug listMedicare Plan Finder ›The official comparison tool. Enter your prescriptions and pharmacy to see what each plan actually costs you, not the advertised premium.

The plan types differ on rules, not just price

Plan type	Network	Referrals	Drug coverage
HMO	Generally must use in-network providers except for emergency or urgent care	Required for specialists	Usually included, and must be chosen with the plan
PPO	Has a network; you may go out of network but may pay more	Not required	Usually included, and must be chosen with the plan
PFFS	No network restriction; any Medicare-approved provider accepting the plan's terms	Not required	Optional; a separate drug plan may be needed
SNP	Depends on the type: HMO-based requires the network, PPO-based allows out-of-network	HMO-based typically requires them; PPO-based does not	All must offer drug coverage
MSA	Generally no network providers; any Medicare-approved provider	Not required	Not included; a separate drug plan is needed

Note the trap in the HMO and PPO rows. Because drug coverage must be chosen as part of the plan, you generally cannot fix a bad drug list by adding a separate drug plan afterwards.

The three checks that decide your annual cost

1. Your drugs. Check each prescription against next year's formulary, and check its tier. A drug that moves from a lower to a higher tier can cost more than the entire premium difference between two plans.
2. Your providers. Confirm each doctor and hospital with the provider's own office, not only with the plan's directory. Directories go stale, and a network change is the most disruptive thing that can happen mid-year.
3. The out-of-pocket maximum. Compare the figures directly. This is what caps a bad year.

A fourth check is worth adding if you have ongoing treatment: the plan's prior authorisation rules for the specific services you use. Two plans with identical cost sharing can differ substantially in how much administration stands between you and a treatment.

Reading the annual notice

Before Open Enrollment, your plan sends a notice describing what is changing for the coming year. Go straight to the drug list, the cost-sharing table, the out-of-pocket maximum and the network section.

If none of those has changed in a way that touches you, staying put is a legitimate decision and requires no action. If one has, that is the signal to compare.

Comparing without a sales conversation

Use the official Medicare Plan Finder with your actual prescriptions, doses and pharmacy. It produces an estimated total annual cost rather than a premium in isolation, which is the only comparison that reflects how you actually use the plan.

For unbiased one-to-one help, your State Health Insurance Assistance Program provides free counselling and does not earn commission on plan enrollments. That distinction matters in the autumn, when a great deal of Medicare advice is paid for by someone.

Free one-to-one helpState Health Insurance Assistance Program ›Free, unbiased Medicare counselling in every state. Counsellors are not paid commission on plan sales.

Frequently asked questions

When can I change my Medicare Advantage plan?

During Open Enrollment, 15 October to 7 December, with the change effective 1 January. If you are already in a Medicare Advantage plan, the 1 January to 31 March window allows one further change.

Does Medicare Advantage have a spending cap?

Yes. Once you reach the plan's out-of-pocket limit, the plan pays 100% of covered health services for the rest of the calendar year. Original Medicare has no such limit.

Do I need referrals?

It depends on the plan type. HMO plans generally require referrals for specialists; PPO, PFFS and MSA plans do not. SNP rules depend on whether the plan is HMO-based or PPO-based.

Can I add a separate drug plan to my Medicare Advantage plan?

Generally not with an HMO or PPO, where drug coverage must be chosen as part of the plan. PFFS and MSA plans may require a separate drug plan.

What is the most common comparison mistake?

Choosing on premium. The out-of-pocket maximum, the drug tiers and the provider network decide the annual cost far more often than the monthly premium does.

Summary

The structural point first: Medicare Advantage caps your annual out-of-pocket spending and Original Medicare does not. That cap is the number to compare.

Then check your own drugs and your own doctors against next year's plan documents, and use the official Plan Finder with your real prescription list. Premiums are the easiest thing to compare and the least likely to be what costs you money.