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By Suzanne Blake
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Millions of Medicare beneficiaries could face substantially higher prescription drug plan premiums in 2027, making this year's open enrollment period particularly important for seniors who rely on stand-alone Medicare Part D coverage, experts say.
“The reality is that healthcare costs continue to rise, and insurers are facing pressure from higher medical expenses and changes in government payment policies,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “Those costs have to flow somewhere, and quite often they end up with the consumer as companies look to maintain profitability.”
The average monthly premium for a stand-alone Medicare Part D prescription drug plan is projected to rise from $34 in 2026 to $51 in 2027, an increase of 50 percent, if current beneficiaries remain in their existing plans, according to a new report from KFF.
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The increase would amount to roughly $204 more per year for the average enrollee who stays in the same plan.
Why It Matters
Prescription drugs often make up a significant expense for older Americans, particularly those living on fixed incomes.
About three-quarters of stand-alone Part D enrollees who do not receive low-income subsidies, or 10.4 million people, would pay a higher monthly premium in 2027 if they remain in their current plans, KFF found.
And among eight national stand-alone Part D plans analyzed by KFF, average monthly premiums for 2027 ranged from roughly $6 to $204. Centene's Wellcare Value Script Rx is projected to have the lowest average premium, at $6.50 a month, while United's AARP Medicare Rx Preferred is projected to average $204.50 per month.
That means comparing plans during open enrollment will be particularly important, since beneficiaries who simply allow their existing coverage to renew could end up paying significantly more.
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What To Know
The 50 percent increase is specifically to KFF's estimate for stand-alone prescription drug plans or PDPs, which are purchased by people who generally receive their medical coverage through Original Medicare.
KFF estimates that the enrollment-weighted average premium for those plans would reach $51 a month in 2027, compared with $34 in 2026, assuming people currently enrolled in the plans keep the same coverage.
“Shopping around for the best plan may cost you some time, and it can ultimately save you some real money. While average Medicare Advantage premiums are projected to decline, that doesn't mean your overall healthcare costs will follow,” Thompson said.
“Deductibles, out-of-pocket expenses, and provider networks can change significantly. Seniors need to look beyond the monthly premium and understand what their total healthcare costs may look like.”
Drug coverage provided through Medicare Advantage looks considerably different. The average monthly Part D premium for Medicare Advantage prescription drug plans is projected at about $9 in 2027, compared with $51 for stand-alone plans.
However, the KFF data differs dramatically from the Centers for Medicare & Medicaid Services.
CMS projected an average stand-alone Part D premium of about $36 per month for 2027, roughly $1 higher than its 2026 estimate. KFF said one possible explanation for the discrepancy is that CMS may be accounting for beneficiaries moving into cheaper plans, whereas its $51 estimate looks at what happens if existing enrollees keep their current coverage.
Why Are Medicare Part D Premiums Rising?
The higher premiums have largely been attributed to the end of a temporary federal program designed to stabilize stand-alone Part D premiums while insurers adjusted to major changes created under the Inflation Reduction Act.
The Centers for Medicare & Medicaid Services announced in July that the Part D Premium Stabilization Demonstration would end after 2026. The program provided additional financial support to stand-alone plans after changes to Part D shifted a greater share of prescription drug costs onto insurers.
In 2025, the program reduced the base beneficiary premium by $15 and limited a plan's year-over-year premium increase to $35. In 2026, the subsidy was reduced to $10 and the maximum premium increase was raised to $50. KFF has estimated the program reduced average monthly stand-alone Part D premiums by $26 in 2025 and $16 in 2026.
Still, CMS said insurers now have "sufficient experience" with the redesigned Part D benefit to develop their 2027 bids and that the program can return to traditional market conditions.
Other Medicare Drug Costs Are Increasing
Premiums are not the only Part D expense changing.
For 2027, Part D plans will be allowed to charge a deductible of up to $700, up from $615 in 2026. KFF estimates that virtually all stand-alone Part D enrollees, 99.8 percent, will be in plans with a deductible if they retain their current coverage.
The average deductible among stand-alone Part D enrollees is projected to increase from $540 in 2026 to $643 in 2027. And for people with drug coverage through Medicare Advantage, it is projected to rise from $360 to $489.
What Can Seniors Do To Lower Medicare Drug Costs?
Beneficiaries do not necessarily need to accept the premium increase shown for their current plan.
Medicare's annual open enrollment period runs from October 15 through December 7, so beneficiaries have an opportunity to compare Part D and Medicare Advantage coverage for 2027. Any changes will take effect January 1.
Experts say this is especially important this year. More than 4 million people currently enrolled in zero-premium stand-alone drug plans will have to pay a premium in 2027 if they remain in their existing coverage because there are no $0-premium stand-alone PDPs available next year for this group, according to KFF.
Thompson said this is likely just the “tip of the iceberg as it comes to healthcare affordability.”
“We're already seeing insurers exit certain markets and reduce plan offerings,” Thompson said. “As competition shrinks in those areas, consumers could face fewer choices, reduced benefits, and potentially higher out-of-pocket costs over the long term.”
What Happens Next
Medicare beneficiaries have until December 7 to make changes during the 2027 open enrollment period.
For people enrolled in stand-alone prescription drug plans, reviewing their plan's 2027 premium, deductible, formulary and pharmacy network could save them significantly instead of allowing their coverage to renew automatically.
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Jason Lemon and Gray R. Thomas
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