Apr 8, 2026
Medicare is a vital service for 66 million Americans. Those with disabilities and those 65 or older rely on Medicare to help pay for health care costs (1).
But the program is facing mounting challenges (2): recent legislation has changed who’s eligible, and the more than $1 trillion in spending cuts is being described as “the biggest cut to our social safety net in history.”
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On April 2, the Centers for Medicare & Medicaid Services (CMS) announced upcoming Medicare changes for 2027. These changes impact everything from how beneficiaries choose plans, to what costs they have to pay, to which regulations impact Medicare going forward (3).
The director of CMS, Chris Klomp (4), says the organization is “fundamentally shifting our approach to quality,” adding that these changes represent a “critical first step toward a more efficient, effective and patient-first health care system.” But that doesn’t necessarily mean that all of these changes will make Medicare easier to use.
Here are the five major changes Medicare users should know about before they go into practice in 2027.
Star ratings for Medicare Parts C and D are changing
Medicare beneficiaries have to choose between different plans whenever they sign up for coverage, and star ratings help them make that choice. Plans are rated from one to five stars across multiple different categories so people can make informed decisions based on their specific needs (4).
The 2027 Medicare changes rework star ratings for Medicare C and D plans. CMS says that some administrative-based measures will be removed, along with measures that showed similar results across most plans. CMS also plans to add a measure focusing on behavioral health.
Additionally, a proposed incentive designed to help plans improve performance will not be carried out as planned. Instead, plans will continue to be rewarded for performing well long-term.
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The Inflation Reduction Act will continue to be applied
In 2022, the Inflation Reduction Act was signed into law (5). The act affected more than just Medicare, but its effects on Medicare Part D were broad.
Among other things, it brought down costs for users by lowering the annual out-of-pocket threshold and eliminating the “donut hole,” a coverage gap for Medicare D patients (6). The 2027 changes also cement some changes made in 2025, such as allowing more types of payments to apply to true out-of-pocket cost calculations.
Cannabis limitations for chronically ill patients
The 2027 Medicare changes make it clear that illegal cannabis products aren’t allowed as supplemental benefits for chronically ill beneficiaries (3). If you have a Medicare Part C plan that currently covers cannabis products, it probably won’t continue to do so going forward.
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Supplemental benefits have more rules on eligibility and debit cards
Two Medicare policies proposed in 2026 will be finalized for 2027, and both of them relate to supplemental benefits (3). One changes the eligibility requirements for supplemental benefits, requiring plans to post their eligibility criteria publicly.
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The other puts stricter requirements on administering supplemental benefits through debit cards. The cards have to be tied to a specific plan year, and they have to be electronically linked to the specific benefits the plan covers to ensure eligibility.
Regulatory changes are part of wide deregulation
The new Medicare changes also ease up or cut several existing regulations, including removing disclosure requirements, waiving communication regulations, and reducing requirements around improving health equity and decreasing health disparities.
The CMS says these regulations “have limited beneficiary choice, hindered innovation and increased costs.” But removing regulations that make it easier for beneficiaries to contact helplines or learn about unused supplemental benefits could make it harder for people to use these services effectively.
These changes are part of a larger push for deregulation under the current administration. In January 2025 (7), the White House published “Unleashing Prosperity Through Deregulation,” an executive order that called for wide deregulation across the federal government. One of its sections asks executive departments or agencies to repeal at least 10 regulations for every new regulation it proposes.
While this executive order applied to the 2025 fiscal year, CMS lists it by name in its press release as the reason it’s removing some of its former Medicare regulations.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Medicare.gov (1); Johns Hopkins Bloomberg School of Public Health (2); Centers for Medicare & Medicaid Services (3, 4); U.S. Congress (5); HealthCare.gov (6); The White House (7).
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Kit Pulliam is a DC-based financial journalist with over five years of experience writing, editing, and fact-checking financial content. They've covered a wide variety of financial topics, including banking, taxes, budgeting, investing, politics, the economy, and government policy.
