Elevance 2027 Medicare Advantage Lineup Shrinks, Leans on Duals

A cautious plan lineup for 2027

Elevance Health's 2027 Medicare Advantage lineup gives up breadth to protect margins. In its October 1 announcement, the Indianapolis-based insurer (NYSE: ELV) described its 2027 plans as advancing "stability, choice and more coordinated support." It highlighted Dual Eligible Special Needs Plans (D-SNPs) for people enrolled in both Medicare and Medicaid, more Chronic Condition Special Needs Plans (C-SNPs), and a single prepaid card that combines everyday benefit allowances.1 The C-SNPs cover diabetes, chronic heart failure, cardiovascular disease and kidney disease. Depending on the plan, they may add dental, vision, transportation, healthy food and over-the-counter benefits.1 The plans are sold under local brands rather than the Elevance name. Those brands include Anthem, Wellpoint, HealthSun, Simply Healthcare, Freedom Health, Optimum HealthCare and, in Puerto Rico, MMM.1

Annual enrollment runs from October 15 through December 7, 2026, and coverage starts January 1, 2027.1 The press release talks about choice. The plan-level data shows a smaller, more targeted footprint built around profitability, especially among low-income dual-eligible members.

What the plan data shows

An analysis of CMS plan files by HealthWorksAI counts 308 Elevance Medicare Advantage plans for 2027, down from 345, a 10.7% cut.6 By that count, the county footprint is nearly unchanged: Elevance enters 26 counties and leaves 30.6 The changes are uneven by state. Florida plans fall from 103 to 52, California's drop from 44 to 38, and Texas grows from 25 to 33.6

Other counts differ. Investment bank Stephens, as reported by Healthcare Dive, found about 150 fewer unique Elevance plans and exits from 56 counties.9 The gap probably comes from different methods, such as counting unique plans versus net plan totals. Both counts agree on two points. Elevance is shrinking again, and it cut less than its big rivals. Stephens counted about 3,000 fewer plans at Centene and exits from 344 counties. CVS, UnitedHealthcare and Elevance followed with 103, 63 and 56 county exits.9 One consumer guide notes that Elevance made its deepest cuts a year earlier. For 2026 it dropped plans covering about 150,000 members and left the standalone Part D market.3

The portfolio now depends heavily on special needs plans: 144 of the 308 plans, or 46.8%, compared with about 35% across all insurers.6 On the third-quarter earnings call, CEO Gail Boudreaux said the 2027 sales approach favors HMO plans and dual-eligible members.612

What changes for enrollees

This is where the company's description and the outside analysis split. Elevance stresses stability. HealthWorksAI estimates that the relative value of Elevance's plan benefits falls 19.5% for 2027, the largest one-year drop in its series. By that measure, plan value is down 38.5% since 2024.6 HealthWorksAI says its averages blend plan and county mix, so the direction matters more than the exact figure.6

Drug cost-sharing is mixed. 73 Elevance plans keep a $0 drug deductible, which is 23.7% of its lineup compared with 8.1% across all insurers.6 Fewer plans charge the top deductible, but that top amount rises from $615 to $700.6 Those changes follow federal Part D rules. For 2027 the out-of-pocket cap on drugs rises to $2,400 from $2,100, and the maximum standard deductible rises to $700.32 Across the whole market, the average Medicare Advantage premium is reported at $12 a month. Out-of-pocket limits are rising, with the federal in-network ceiling at $9,850.24 Industry analysts say out-of-pocket maximums are up about 10% and Part D deductibles about 30% on many plans.24

For enrollees, the takeaway is that a low premium can hide higher costs elsewhere in the plan.

Star ratings slipped

Quality scores are the weakest part of Elevance's case. On the earnings call, management said about half of its Medicare Advantage members will be in plans rated four stars or higher for 2027, with an average rating of four stars across the company.1116 Outside data puts that in context. Among the ten largest Medicare Advantage insurers, Elevance is one of five that will have fewer members in four-star-plus plans next year.30 One tracker reports that most Anthem and Wellpoint contracts scored 3 to 3.5 stars, and that Elevance's five-star contracts fell from three to one.3 In Florida, its Optimum HealthCare and HealthSun contracts each earned 4.5 stars.3

The industry benchmark is much higher. CMS data shows about 71% of enrollees in Medicare Advantage plans with drug coverage are in four-star-plus plans, even though the average rating dipped to 3.99.2529 Humana jumped to more than 90% of members in such plans.30 The four-star line matters because it triggers higher bonus payments and larger rebates.30 With only about half its members above it, Elevance gives up revenue its competitors will collect. Management calls star ratings a multi-year priority.6

Wall Street likes the margins

Investors have reacted well to the financial results. Elevance reported third-quarter adjusted earnings of $6.99 per share, raised its 2026 guidance to at least $29, and reaffirmed at least 12% earnings growth in 2027.1113 About $1.85 of that per-share figure came from non-operating items, mainly investment valuation adjustments, which dampened enthusiasm.19 Medicare Advantage is on track for an operating margin of at least 2% this year. Management expects it to improve in 2027 toward a long-term target of 3% to 5%, citing the product and market exits taken for 2026.1618

Membership is shrinking even as margins improve. Total medical membership fell by 487,000 to 44.9 million.16 HealthWorksAI expects Elevance's Medicare Advantage enrollment to stay roughly flat at about 1.52 million by February 2027.6 In this cycle, Elevance is choosing margin over market share.

Medicaid changes behind the dual-eligible push

The focus on D-SNPs is tied to Medicaid, which makes up about a third of Elevance's premiums. Medicaid has been a drag since healthier enrollees left the program after pandemic-era policies ended.17 State rate increases in July helped. Elevance now expects its 2026 Medicaid margin to beat its earlier forecast of -1.75%, and it calls 2026 the low point.1716

The next challenge is Medicaid work requirements, which start January 1, 2027. Most adults aged 19 to 64 in the ACA expansion group will have to log 80 hours a month of work or qualifying activity, or earn at least $580 a month, unless they are exempt.44 As expansion enrollees, they will also have to renew every six months.45 The Congressional Budget Office estimates the requirement alone will leave about 5.3 million more people uninsured by 2034.48 Manatt Health says CMS's implementing rule could push average annual coverage losses to 8.2 million.44

This is a direct financial risk for insurers. Work requirements tend to remove healthier members, which leaves a sicker group whose costs exceed the rates set before people dropped out.50 Elevance's CFO said the company is planning for that added acuity pressure. Some states are building work-requirement assumptions into 2027 rates, but practice varies.15 People who lose Medicaid this way also cannot get subsidized marketplace coverage.44 More of them are likely to go uninsured, which could leave hospitals with more uncompensated care. KFF estimates the $50 billion rural health fund covers only about 37% of expected Medicaid losses.41

Drug prices and employer costs

Two other trends shape the 2027 plans. The first is Medicare drug price negotiation. Negotiated prices for 15 more Part D drugs take effect January 1, 2027. Semaglutide (Ozempic, Wegovy and Rybelsus) drops to $274 for a 30-day supply from a $959 list price.32 CMS estimates enrollees will save about $685 million in out-of-pocket costs.31 All Part D and Medicare Advantage drug plans must cover the 15 drugs.32 Elevance says enrollees in its integrated medical-and-pharmacy plans save up to $100 a month and visit the emergency room about 30% less often.6

The second is employer coverage, where cost growth is speeding up. KFF found average family premiums reached $28,303 this year, up 5%.52 Forecasts for 2027 run higher: Marsh projects 8.2%, Aon 9.5% and WTW 11.1% before plan changes, WTW's highest in more than two decades.5354 Employers point to higher hospital prices, consolidation among health systems and more expensive drugs.5351 Mercer estimates GLP-1 drugs alone add about a percentage point.58 Many employers plan to pass costs to workers: 85% are planning or considering higher employee premium contributions by 2028.54 Elevance reported strong demand for its integrated offerings in its commercial business.11

Bottom line

The coverage agrees on the main facts: Elevance is offering fewer plans in fewer places, putting more weight on special needs plans, and earning better margins. Calling that "stability" is accurate for Elevance's finances. It does not describe what many members will see. Florida enrollees are losing half the plan options, benefit value is falling by HealthWorksAI's measure, and star ratings trail competitors. The dual-eligible bet looks sensible as Medicaid rates recover, but work requirements could make the remaining Medicaid population sicker and more expensive. Shoppers this enrollment period should check the specific plan's star rating, deductible and out-of-pocket maximum rather than the brand.3