Medicare Drug Premiums Rise 50% in 2027 Unless Seniors Switch

The 50 percent figure applies to seniors who keep their plans

Millions of seniors who buy stand-alone Medicare drug coverage could see their premiums jump next year. Whether that happens depends mostly on one thing: whether they compare plans before December 7.

KFF, the health policy nonprofit, projects that the enrollment-weighted average monthly premium for stand-alone Part D prescription drug plans will rise from $34 in 2026 to $51 in 2027. That is a 50 percent increase, or about $204 more per year for the average enrollee.1 The projection assumes current enrollees stay in their existing plans, and this assumption explains the headline number.12

The increase would be widespread. About three-quarters of stand-alone Part D enrollees who do not get low-income subsidies, roughly 10.4 million people, would pay more if they keep their current coverage.7 That group includes about 4.1 million people now in zero-premium plans. No $0-premium stand-alone plans will be available to them in 2027, so they will pay something no matter what.9

Prices also vary widely between plans. Among the national stand-alone plans KFF examined, projected 2027 average premiums range from $6.50 a month for Centene's Wellcare Value Script Rx to $204.50 for UnitedHealth's AARP Medicare Rx Preferred.17 One Virginia enrollee received a notice that his AARP-UnitedHealthcare drug plan would rise from $39.60 to $121.90 a month. After switching, he estimated he would save about $1,000 next year.9

Why KFF and CMS give very different numbers

The federal government's figure looks nothing like KFF's. In September, the Centers for Medicare & Medicaid Services projected an average stand-alone premium of about $36 a month for 2027, roughly $1 more than this year.28 KFF based its estimate on June enrollment and on people keeping their plans. CMS said its numbers assume people will switch.2 KFF also said CMS did not explain its methods.9

Both numbers are probably accurate for the question each one answers. Last year KFF projected a $44 average stand-alone premium, and the actual figure came in at $34. Shopping during open enrollment, and new people joining cheaper plans, regularly pull the weighted average down.8 The CMS number is closer to where the market will likely end up. The KFF number shows what a passive enrollee will pay.

That difference matters because many seniors don't shop. One Virginia retiree said he worried that other seniors would not look for better plans.9 For anyone who lets their plan renew automatically, the 50 percent figure is a realistic estimate of their own bill.

The end of a temporary subsidy

Most coverage points to the same cause: the end of the Part D Premium Stabilization Demonstration. CMS announced in July that the program would stop after 2026.1 It was created to cushion stand-alone plans after the Inflation Reduction Act shifted more drug costs onto insurers. It cut the base beneficiary premium by $15 in 2025 and by $10 in 2026, and it capped how much premiums could rise each year.1 KFF estimates it lowered average stand-alone premiums by $26 a month in 2025 and by $16 in 2026.1

Coverage of the decision splits along political lines. CMS said insurers now have enough experience with the redesigned benefit to price their plans without help.1 CMS Administrator Mehmet Oz has called the program an insurance industry bailout.9 The program cost the federal government $9.8 billion over two years.2 Trump administration officials have also blamed the Inflation Reduction Act itself for higher drug coverage costs.2

The premium increases also arrived as President Trump was telling midterm rally crowds that the U.S. now has the world's lowest drug prices.9 Lower negotiated drug prices and higher premiums can happen at the same time. Still, the timing creates a mismatch the administration will have trouble explaining.

Premiums are only part of the cost

Other drug costs are rising too. The maximum Part D deductible goes from $615 to $700 in 2027. KFF expects the average stand-alone deductible to rise from $540 to $643.1 The out-of-pocket cap, which began at $2,000 in 2025 and rose to $2,100 this year, goes to $2,400.6 Most enrollees will also pay coinsurance, a percentage of the drug's price, rather than flat copays. That makes costs harder to predict and can raise what people pay for brand-name drugs.79

These increases come as seniors' incomes grow more slowly. Social Security benefits will rise 3.6 percent in 2027, and Investopedia notes that Medicare costs are rising faster than that.6 The Medicare trustees project the standard Part B premium will rise from $202.90 to $209.50, though CMS has not confirmed it.23 A one-time $90 payment to about 20.8 million Original Medicare enrollees left out Medicare Advantage members and higher earners.6

Medicare Advantage is cheaper upfront, with trade-offs

Medicare Advantage looks much cheaper. KFF puts the average drug portion of Advantage premiums at about $9 a month in 2027, an increase of about $2.4 CMS projects the drug premium inside Advantage plans will fall to $7, and the overall average Advantage premium will drop from $14.37 to $12.2321 The two forecasts differ on direction here too, but both put Advantage drug coverage far below stand-alone plans.

That gap could push more seniors toward Advantage, the privately run alternative to traditional Medicare. Healthcare Dive notes that these plans often have narrower provider networks and wide use of prior authorization, which can delay or deny care.7 Their other costs are also rising. The median in-network out-of-pocket limit rose from $6,500 to $7,100, and the average drug deductible in Advantage plans with drug coverage went from about $434 to $525.21 KFF's own figures show a sharper rise in that deductible, from $360 to $489.1

The number of plans is also shrinking. KFF says the average beneficiary can choose from 35 Advantage plans in 2027, down from 39.24 Humana is sending non-renewal notices to about 600,000 members.23 Ohio's plan count falls from 212 to 180.26 Medicare advocates warn that some plans are leaving certain areas and cutting benefits such as dental coverage.29 Switching back is also risky. Once someone has been in Advantage beyond the first 12 months, most states let Medigap insurers use medical underwriting to set prices.24

Workers face the same cost pressures

The Part D increase is one example of a trend affecting nearly every kind of coverage. In employer plans, Marsh projects per-employee health benefit costs will rise 8.2 percent in 2027 even after cost-cutting. That would be the largest increase since 2003, and employers say it would be about 11 percent without those cuts.3140 Aon projects 9.5 percent and WTW projects 11.1 percent.32 KFF's 2026 survey found workers paying an average of $7,471 toward family coverage, up 9 percent. That increase outpaced both wage growth and inflation.3832

Employer groups point to many of the same causes as the drug-plan story: greater use of care, higher hospital prices and more expensive drugs.32 Use of GLP-1 weight-loss drugs alone adds about one percentage point to employer cost growth.31 Hospital consolidation is pushing up prices in some markets. Lower government spending on public programs is shifting costs onto private plans.37 Marketplace insurers are asking for a median premium increase of 15 percent.31

Medicaid cuts will add to hospital costs

The largest change of all starts January 1. The 2025 reconciliation law requires work requirements in 44 states, including the District of Columbia, for adults in the Medicaid expansion group and certain waiver programs.18 Those enrollees must show 80 hours a month of work, school or volunteering, or earn $580 a month. They must also renew every six months instead of once a year.13 The CBO estimates the work requirements will leave 5.3 million more people uninsured by 2034, plus about 700,000 more from the six-month renewals.15 On October 29, a federal court struck down the narrow definition of medical frailty that CMS had set for exemptions. The rest of the work-requirement framework remains in place.20

Hospitals will feel this directly. More uninsured patients means more unpaid care, especially for safety-net hospitals.15 Research cited by The Guardian finds rural and urban hospitals are now closing at the same rate.13 Hospitals tend to recover unpaid care by charging private payers more, which feeds the employer cost increases described above.

Analysis: savings depend on shopping

Looking across all of this, the 50 percent figure is less a prediction about the whole market than a measure of what passive enrollees will pay. The subsidy that held premiums down is gone. Insurers are now setting prices that reflect their real costs, and the gap between plans is large enough that people who don't compare will pay more. Seniors with time and help can avoid most of the increase. Those who are less able to shop will not.

The same pattern appears in employer plans, the marketplaces and Medicaid. Costs are being moved from government and employers onto individuals through higher deductibles, coinsurance and paperwork that people must handle themselves. Medicare's open enrollment period ends December 7, and Medicaid work requirements start January 1.