CMS rejects Medicare Advantage perks for marijuana, streaming, shopping clubs

CMS issued its Contract Year 2027 Medicare Advantage and Part D final rule on April 2, 2026, and the agency drew a clear line against turning medical marijuana, streaming services and shopping clubs into plan extras. The rule revises Medicare Advantage, the Medicare Prescription Drug Benefit program and the Medicare Cost Plan program, with policy and technical changes set to apply to coverage beginning January 1, 2027.

That boundary matters because Medicare Advantage plans already compete on supplemental benefits, not just monthly premiums. MedPAC’s June 2025 report says those extras can include reduced cost sharing, lower Part B and Part D premiums, enhanced Part D benefits and services original Medicare does not cover, including dental, vision and hearing. For seniors comparing plans, that is often the real purchase: a bundle of medical coverage, drug help and out-of-pocket protection, not a marketplace of lifestyle perks.

CMS signaled in its January 26, 2026 advance notice that it wanted Medicare spending to align more closely with value, while maintaining beneficiaries’ ability to choose coverage that fits their needs. The same agency also opened the door to broader 2027 changes beyond benefits, including updates to payment policy that affect how much plans are paid and how they design their bids. Those changes can alter whether plans compete on lower cost sharing and stronger drug coverage, or on extras that look attractive but do little to reduce medical bills.

The rest of the 2027 rule reaches into the mechanics of Medicare Advantage marketing and consumer choice. KFF said in a May 1, 2026 analysis that some consumer protections were strengthened while others were rolled back. The Medicare Rights Center took a sharper view in an April 16, 2026 post, saying the final rule increases plan pay and relaxes marketing restrictions. Legal and consulting reviews from Holland & Knight, Crowell & Moring LLP, Avalere Health Advisory and the Bipartisan Policy Center also described the rule as a significant shift for transparency and enrollment competition.

That fight is unfolding against a strained market. HealthScape Advisors said its 2027 outlook reflected higher utilization in Medicare Advantage, a pressure that makes payment levels and benefit design more consequential for plans and enrollees alike. With the 2027 changes taking effect at the start of next year, CMS has left plans room to sell real health benefits, but not to blur the line between care and marketing.