Medicare Advantage Lawsuit Could Affect 2027 Benefits, Plan Choices

 Medicare Advantage Lawsuit Could Affect 2027 Benefits, Plan Choices

**A federal judge's ruling in favor of Clover Health has sent shockwaves through the Medicare Advantage program, forcing the agency to recalculate star ratings and leaving 2027 benefits uncertain. Here's what every American beneficiary needs to know before choosing coverage this fall.**

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## Introduction: A Ratings Earthquake

When Clover Health won its lawsuit against the Centers for Medicare & Medicaid Services (CMS) in May 2026, it seemed like a narrow victory for one insurer. A federal judge found that CMS had improperly included 20 measures when calculating Clover's 2026 star rating—some based on data the agency lacked authority to collect, others included without required public rulemaking.

But the ruling has since rippled far beyond one company. CMS voluntarily recalculated ratings for all Medicare Advantage plans, but used a different methodology for Clover than for everyone else. That distinction has now triggered a new lawsuit from Elevance Health, which claims the agency's approach will cost it **$115 million in 2027 quality bonus payments**.

For millions of Americans enrolled in Medicare Advantage, this legal battle could reshape the 2027 plans you'll be choosing during this fall's Annual Enrollment Period. Here's what's happening—and what it means for your coverage.

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## The Numbers That Matter: What the Lawsuits Mean

### The Clover Precedent

The Clover Health ruling was a landmark in Medicare Advantage litigation. Judge Lisa Godbey Wood found that CMS had improperly included 10 measures based on data it was not permitted to use, and a separate set of 10 measures that were included without undergoing required notice-and-comment rulemaking. She ordered the agency to recalculate Clover's rating, upgrading its PPO plan from 3.5 to 4.5 stars.

### CMS's Partial Recalculation

In June 2026, CMS announced it would voluntarily recalculate 2026 star ratings for all plans—but only if a contract would receive a **higher** rating. The agency removed a different set of measures than those addressed in the Clover ruling, including complaints against the health plan and metrics on whether a plan makes a foreign interpreter available for customer service. Some of these measures were ones that Elevance performed well on.

### Elevance's $115 Million Claim

Elevance Health filed suit on July 1, arguing that the agency cannot treat the same methodology as defective for Clover but sound for other plans. The insurer wants the court to throw out its 2026 ratings, order CMS to recalculate them without the 20 disputed measures, and allow Elevance to revise its 2027 bids. The outcome could affect quality bonus payments totaling **$13 billion** this year across the industry.

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## The Human Element: What This Means for Beneficiaries

### Your Current Coverage Is Not Changing

The lawsuit does not affect your current Medicare Advantage coverage. If you're enrolled in a plan today, your benefits remain unchanged.

### But 2027 Plans Are in Flux

Star ratings directly influence how much funding insurers receive to create their benefit packages. Higher-rated plans get more money, which they can use to offer lower premiums, richer benefits, or better provider networks. Lower-rated plans have less to work with.

Jae Oh, CFP, author of "Maximize Your Medicare," put it bluntly: "If a carrier gets a lower star rating, then the next year it has less funding to create its benefits package. That hurts the benefits package, and as a result, enrollment in the next year can decline."

### The Five-Star Drought

2026 saw a dramatic decline in the number of five-star Medicare Advantage plans. Jae Oh is skeptical that five-star plans will return in 2027. Some plans that were four stars and got downgraded to 3.5 stars could see upgrades if CMS adjusts its methodology—but that remains uncertain.

### The "Always Check" Rule

The uncertainty reinforces a message that Medicare experts have been delivering for years: Medicare Advantage plans are annual contracts. "The clear implication is that every moving part is subject to change every year," Oh said. Benefits, provider networks, and prescription drug coverage can all change—sometimes dramatically.