What Medicare premiums will cost in 2027
Millions of older Americans could see lower monthly prices on their private Medicare plans in 2027, while those with a stand-alone prescription drug plan could see monthly premiums increase by less than $1, according to the Centers for Medicare & Medicaid Services.
CMS said the average monthly premium for stand-alone Part D prescription drug plans will be $36 in 2027, up less than $1 from $35.09 in 2026.
Monthly premiums for Medicare Advantage plans, which combine medical and prescription drug coverage, will average $12 in 2027, down from $14.37 in 2026, CMS said.
Insurers that offer privately administered Medicare Advantage and Part D plans must notify enrollees by Sept. 30 about changes to premiums, prescription drug coverage and provider networks. Enrollees can change plans during Medicare open enrollment, which runs from Oct. 15 through Dec. 7 for coverage starting Jan. 1, 2027.
Why you should review your coverage
CMS said about eight in 10 Medicare Advantage enrollees will be able to keep their current plan with the same or a lower premium in 2027.
CMS said 97% of Medicare enrollees will have access to 10 or more Medicare Advantage plan options. The total number of Medicare Advantage plans offered nationwide remained stable, at 5,553 in 2026 and 5,532 in 2027.
CMS did not immediately say what percentage of Medicare Advantage enrollees are in a plan that won’t be offered in 2027.
Medicare experts said it’s important for enrollees to scrutinize plan offerings to make sure they still meet their needs. Some Part D plans might seek to reduce costs by trimming drug formularies, the lists of prescription drugs a plan will cover.
Consumers find Medicare Advantage plans appealing because the monthly premium can be inexpensive, said Juliette Cubanski, vice president and director of the program on Medicare policy for KFF, a health policy nonprofit.
“Insurers may be bending over backward to try and keep premiums as low as possible,” Cubanski said. “Other changes underneath the hood is the coverage they offer. If they need to decrease costs, that might come in the form of higher cost sharing for prescription drugs or reducing the number of prescription drugs they cover.”
What changed with Medicare drug subsidies
In July, CMS announced it would end a Medicare prescription drug plan subsidy implemented by the Biden administration to lower prices because of changes ushered in by the 2022 Inflation Reduction Act.
As of February, about 25 million people were in a stand-alone Medicare Part D plan, often paired with traditional government-run Medicare. Another 31 million were in a Medicare Advantage plan, which is administered by a private insurance company and typically includes prescription drug coverage.
Trump administration officials previously said the Inflation Reduction Act increased costs for prescription drug coverage. The law imposed a $2,000 cap in 2025 on what Medicare enrollees paid out of pocket for prescription drugs. That cap increased to $2,100 in 2026.
Under the Biden administration, CMS created a “demonstration project” that steered subsidies to insurance companies to keep premiums lower. The project cost the federal government $9.8 billion in 2025 and 2026.
Drug-pricing pundits said eliminating the demonstration project could send Part D prices higher in 2027.
In a news release, CMS said there are “encouraging signs that, as expected, the Part D program is returning to normal market conditions.”
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