Will the Medicare Advantage market improve this AEP? We do see signs that the pressures pushing carriers to cut benefits and exit underperforming markets are starting to ease:
- Rate increases are improving (although still below medical cost trend).
- Carriers have more revenue certainty now that the V28 risk adjustment phase-in is fully rolled out (although last week's Part D temporary subsidy announcement complicates things).
- Recent court wins over downgraded star ratings may allow carriers to recoup some lost bonus revenue.
- Medical utilization and cost growth are cooling after years of pent-up post-pandemic demand.
Overall, carriers are in a slightly better financial position than last year. But agents should still expect plan exits and benefit cuts this year as the market resets. 2026 is likely the trough year in this cycle. I shared four predictions for AEP 2027 with Spark agency leaders recently:
- Suppressed and non-commissionable plans will persist — fewer than 2026, but they are not going away.
- Disruption will continue to impact existing membership. Plan exits and benefit changes will keep clients in motion.
- Co-op will come back, but stay targeted. We will see more funding than AEP 2026, but focused on select geographies and plan types.
- Quality will drive compensation. Carriers will increasingly shift incentives toward rewarding enrollment quality, not just volume.
In summary, agencies should expect similar trends as last year for AEP 2027, just at lower magnitude. I recently went deeper on the market outlook at Spark's AEP Kickoff which you can catch here for free.
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