Medicare Drug Plan Premiums Could Jump 50% in 2027, New Analysis Warns
Many Americans are going to receive unwelcome news about their Medicare drug plans. A new analysis indicates these plan premiums are going to soar in 2027. Read on for what you need to know if you are a Medicare user.
Health Policy Nonprofit Warns of Increase in Medicare Drug Plan Premiums
Medicare enrollees in stand-alone prescription drug plans could see monthly premiums rise by 50% next year if they keep their current plans, according to a new analysis from KFF. The health policy nonprofit said that the average monthly premium for stand-alone Medicare prescription drug plans will end up at $51. This compares to the average monthly premium of $34 in 2026.
The silver lining is that Medicare enrollees may be able to find lower-cost drug plans during the open enrollment period. This period ends on December 7.
Medicare is the federal health insurance program for people 65 and older and some younger people with disabilities. The costs for these stand-alone Medicare "Part D" prescription drug plans vary significantly. KFF explains that the costs among eight of these plans range from $6 to $204 monthly.
Diving into the analysis further, KFF said that Americans who select a private Medicare Advantage plan will be able to find more affordable options. These Advantage plans combine Medicare and prescription drug coverage rolled into one. KFF predicts that the Medicare Advantage plans will average roughly $9 per month next year. This equates to an increase of $2 from 2026.
Approximately 25 million Americans were enrolled in stand-alone Medicare Part D plans in 2026. An additional 31 million leaned on a Medicare Advantage plan with prescription drug coverage.
The KFF prediction of rate hikes came in much higher than what the Centers for Medicare and Medicaid Services (CMS) estimated in September before the beginning of the open enrollment period. CMS had estimated that the average monthly premium for stand-alone Part D prescription drug plans would come in at $36 in 2027, an increase of just $1 from 2026.
CMS said that it considers the number of people who expect to switch plans in 2027 in its estimates. Conversely, KFF calculated costs for enrollees assuming that they will retain their same plan, using June enrollment numbers as a base.
Advice from KFF About Open Enrollment
So what do Medicare enrollees take from this analysis? KFF said that it is crucial that consumers go over their coverage carefully and make any needed changes prior to the end of the open enrollment period. "They have an opportunity to switch to a lower-cost plan during open enrollment, but they have to take action if they want to see a lower premium," said Juliette Cubanski, vice president and director of the program on Medicare policy for KFF.
Older Americans leaning on Medicare will need to be particularly detailed when looking through the changes before selecting their coverage plan for 2027. Supplemental plan premiums have continued to increase, putting strain on retirees living on a fixed income.
The escalating cost of healthcare is not a concern unique to senior citizens. A survey from West Health-Gallup in June found that fewer than half of all adults at any age said they can afford their healthcare costs.
KFF is warning that higher average monthly premiums are not the only part of the story for Medicare enrollees. The nonprofit said that consumers will also be grappling with an increase in deductibles for drug coverage in 2027.
The KFF analysis found that consumers will see average deductibles for stand-alone plans come in at $643 next year. This compares to the average 2026 deductible of $540. Medicare Advantage enrollees will also see higher deductibles for drug coverage, rising to an average of $489 in 2027 from $360 in 2026.
Brand-name drugs and non-preferred drugs will also cost more in 2027. The Trump administration recently ended a "demonstration project" that sent subsidies to insurance companies to help keep Medicare drug plan premiums down. These subsidies cost the government about $9.8 billion over the last two years.
The composition of Congress will change dramatically in early January after big wins for the Democrats in the midterms. However, the president still has the authority to veto any legislation that hits his desk, meaning the Democrats will be limited in what they can do to bring down healthcare costs. To compare plans before the December 7 deadline, enrollees can use the Medicare Plan Finder at Medicare.gov or call 1-800-MEDICARE.
Curious for more stories that keep you informed and entertained? From the latest headlines to everyday insights, YourLifeBuzz has more to explore. Dive into what's next.