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The Centers for Medicare & Medicaid Services (CMS) has predicted that older Americans could see lower monthly prices on their private Medicare plans in 2027, with those having a stand-alone prescription drug plan experiencing a less than $1 increase in monthly premiums. The average monthly premium for stand-alone part D prescription drug plans will be $36 in 2027, up from $35.09 in 2026, while premiums for Medicare Advantage plans will be an average of $12 in 2027, down from $14.37. Insurers must notify Medicare enrollees by the end of September about changes to monthly premiums and coverage, and enrollees can change plans during Medicare open enrollment from October 15 through December 7.
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Lower Premiums Projected for Millions of Medicare Beneficiaries in 2027
According to data released by the Centers for Medicare & Medicaid Services (CMS), millions of elderly Americans could see a reduction in their private Medicare plan costs in 2027. On the other hand, those with a separate prescription drug plan might experience a slight increase of under $1 in their monthly premiums.
CMS has projected that the monthly premium for independent Part D prescription medication plans will rise to $36 in 2027 from $35.09 in 2026. However, beneficiaries who have Medicare Advantage plans, which amalgamate medical and prescription drug coverage, are likely to see their average monthly premiums decrease to $12 in 2027 from $14.37 the previous year.
Medicare Advantage Plan Changes
By September 30, insurance companies offering privately managed Medicare Advantage plans and Part D prescription drug plans are required to inform Medicare enrollees about any changes in monthly premiums, prescription drug coverage, or provider networks. Enrollees will then have the opportunity to change their plans during the Medicare open enrollment period running from October 15 through December 7 for coverage beginning in 2027.
“The stability of the marketplace and the lower cost for most beneficiaries suggests that beneficiaries should have good options heading into this enrollment season,” stated John Brooks, the director of Medicare at CMS. Brooks added that it’s good practice for enrollees to reassess their plans each year to ensure they continue to meet their individual healthcare needs.
CMS reports that approximately eight out of ten Medicare Advantage enrollees will be able to retain their current plan at the same or a reduced premium in 2027. The agency also stated that 97% of Medicare enrollees will have access to ten or more Medicare Advantage plan options. The total number of these plans nationwide remained stable at 5,553 in 2026 and 5,532 in 2027.
Important Considerations for Enrollees
Medicare experts emphasize the importance of enrollees carefully reviewing their plan offerings to ensure they continue to align with their healthcare needs. Some Part D plans may aim to decrease costs by modifying their list of covered prescription drugs. Juliette Cubanski, vice president and director of the program on Medicare policy for KFF, a non-profit health policy organization, suggested that “insurers may be bending over backward to try and keep premiums as low as possible”, a move that could potentially result in higher cost sharing for medication or a reduction in the number of covered prescription drugs.
CMS recently announced its plan to terminate a Medicare prescription drug plan subsidy established by the Biden administration. The subsidy was put in place to lower prices in response to modifications brought about by the 2022 Inflation Reduction Act.
Medicare Enrollment Numbers
As of February, approximately 25 million individuals were enrolled in a standalone Medicare Part D plan, which is typically combined with traditional government-administered Medicare insurance. An additional 31 million were enrolled in a Medicare Advantage plan, these are Medicare plans managed by private insurance companies that usually include prescription drug coverage.
Following the passing of the Inflation Reduction Act, Trump administration officials claimed that the legislation increased costs for prescription drug coverage. The healthcare and climate law imposed a $2,000 cap in 2025 on out-of-pocket payments for prescription drugs by Medicare enrollees. This cap rose to $2,100 in 2026. During the Biden administration, CMS created a “demonstration project” that directed subsidies to insurance companies to keep premiums lower. This project cost the federal government a total of $9.8 billion in 2025 and 2026.
Experts in drug pricing suggest that the termination of the Biden administration’s demonstration project could potentially drive Part D prices higher in 2027. However, CMS has stated that there are “encouraging signs that, as expected, the Part D program is returning to normal market conditions”.
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