Medicare Part D 2027 Premiums: Averages Hide $50 Monthly Jumps

Two stories about the same market

The Centers for Medicare & Medicaid Services is telling a reassuring story about prescription drug coverage in 2027. The agency projects that the average premium for stand-alone Part D prescription drug plans (PDPs) will rise by less than $1 a month. It also pairs that figure with sharper declines elsewhere: weighted average Medicare Advantage premiums are projected to fall more than 16%, and drug premiums inside Medicare Advantage plans are projected to drop 38%. 4 CMS framed the outlook as proof that beneficiaries can keep affordable coverage "without relying on billions of dollars in temporary subsidies to insurance companies." It also pushed back on what it called "speculation and misleading reports" about the end of a subsidy program. 4

KFF's analysis of the same market agrees with the headline average but adds an important caveat. Many PDP enrollees will see premium cuts or increases under $10 a month if they keep their current plan, but others face monthly increases of $50 or more unless they switch. 1 KFF also found a modest reduction in the number of stand-alone plans available for 2027. 1

Where the pain lands

The spread between winners and losers depends heavily on the insurer. According to KFF, Centene still offers the cheapest stand-alone plans, with premiums for both of its Wellcare PDPs under $10 a month in many states. Enrollees in UnitedHealth's AARP-branded PDPs, by contrast, face substantially higher premiums and increases of $50 a month or more. 1 For a retiree on a fixed income, that is roughly $600 or more a year. It arrives through a mailed notice that is easy to overlook.

Other costs are rising too. The Part D deductible, already finalized by CMS, increases to $700 from $615 in 2026. TheStreet calculates that this roughly 14% jump is the steepest one-year increase since the drug benefit was redesigned. 2

The subsidy behind the dispute

The disagreement centers on the Part D Premium Stabilization Demonstration. CMS created this voluntary program to help stand-alone plans adjust to the Inflation Reduction Act's overhaul of the drug benefit. 3 It gave participating sponsors a flat premium reduction, which was roughly $10 per member per month in its second year. It also capped how much any single plan's premium could rise from one year to the next. 3 CMS confirmed in late July 2026, alongside its July 28 bid release, that the program will end after 2026. 3 TheStreet notes that this is one year short of the three-year run CMS originally described as possible. 2

Estimates of the subsidy's size differ by source. TheStreet, citing KFF, puts the expiring federal support at $9.8 billion. It also cites Medicare Payment Advisory Commission figures showing the subsidy cut $16 a month from the average PDP premium in 2026. 2 By that math, the 2026 average of $36 would have been about $52 without the subsidy, so the program covered close to a third of the real cost. 2 Govtschemes describes the per-member reduction as closer to $10 in year two. 3 The two figures likely measure different things, such as the flat base payment versus the total effect including the premium cap. Either way, the support was a meaningful share of what enrollees paid.

The sources also differ slightly on the averages themselves. KFF describes CMS's projection as a $1 rise from $35 to $36. 1 CMS says the increase is under $1. 4 TheStreet reports the 2026 average as $36. 2 These gaps are small, but they show how much depends on how the baseline is defined.

Reading the numbers

Both CMS and KFF can be right at once, and that is the core issue. An average that barely moves can hide a market where some plans get cheaper while others jump sharply. Losing a cap on year-over-year increases is exactly the kind of change that widens that spread. CMS's description of "broad pricing stability" holds at the market level. 4 Whether an individual enrollee experiences stability depends on which plan they hold and whether they act during open enrollment.

In our reading, KFF's framing better captures what beneficiaries face. The averages are not wrong, but nobody pays an average premium. Ending the demonstration may be sound policy, since it was always described as temporary. Still, the burden of absorbing the change now falls on enrollees who have to compare plans. Those who stay in a plan by default, particularly in the AARP-branded products, are the most exposed. 1 With a higher deductible on top of those premium changes, 2 2027 is a year when checking other plan options could save beneficiaries hundreds of dollars.