Medicare Part D Premiums to Rise 50% as Trump Touts Drug Deals

A campaign boast meets an enrollment notice

Many seniors are getting two messages about drug costs this fall, and they point in opposite directions. At an Ohio rally on Oct. 28, less than a week before the Nov. 3 midterms, President Donald Trump said his administration had taken the U.S. from the world's highest drug prices to the lowest, and told Republican candidates they should win on that issue alone.1 Meanwhile, a new KFF analysis finds that people in stand-alone Medicare prescription drug plans will see average monthly premiums rise about 50% in 2027, from roughly $34 to $51.14

Both things can be true at once, because they describe different parts of a large system. Still, the gap between the claim and what retirees will actually pay is the main story of this open enrollment season. Taken together, the coverage suggests that what seniors pay out of pocket next year depends much more on insurance design, subsidy decisions, and Medicaid policy than on the pricing deals the White House keeps promoting.

What is happening to Part D

About 25 million people buy stand-alone Part D plans, and about 31 million more get drug coverage through Medicare Advantage.1 KFF estimates that 10.4 million stand-alone enrollees who don't get low-income subsidies, about 76% of that group, will pay more next year if they keep their current plan.1 That includes 4.1 million people now in zero-premium plans. No zero-premium plans will be offered in 2027, so all of them will pay something.4

Some of the increases are large. UnitedHealthcare's AARP-branded plans cover more than two million people. AARP Medicare Rx Preferred is raising premiums by at least $50 a month in every state and the District of Columbia, and by more than $75 in 37 states.10 One Virginia enrollee found his AARP-UnitedHealthcare premium going from $39.60 to $121.90 a month. He switched to a Humana plan costing $19.30 and expects to save about $1,000 next year.1

Premiums aren't the only cost going up. KFF projects the average stand-alone deductible will rise from $540 to $643, and the average drug deductible in Medicare Advantage from $360 to $489.1 Most enrollees will also pay coinsurance rather than flat copays, so their costs will track drug list prices and be harder to predict.1 At the program level, the standard deductible rises from $615 to $700, and the annual out-of-pocket cap goes from $2,100 to $2,400.7 Both increases are about 14%, roughly four times the 3.6% Social Security cost-of-living adjustment.5

Two sets of numbers

The biggest disagreement in the coverage is over how much premiums are actually rising. The Centers for Medicare & Medicaid Services projects that the national average stand-alone premium will go up about $1, from $35.09 to around $36.513 KFF's figure is roughly fifty times larger. KFF says CMS didn't explain how it reached its number, and suggests the agency may have assumed many enrollees would move to cheaper plans.1

That assumption probably explains most of the difference. CMS describes a market where low-cost options exist: it says 88% of non-low-income beneficiaries can get a basic plan for $10.30 a month or less.6 KFF looks at what happens if people stay where they are. Both can be accurate. But many seniors simply let their coverage roll over each year, and in that case it renews with whatever changes the plan filed.5 For those people, KFF's estimate is the more realistic one. Even the Virginia retiree who saved money said he worried that other seniors won't shop around.1

The subsidy that ended early

Most reports point to the same cause. The Inflation Reduction Act of 2022 shifted more of the cost of expensive drugs onto insurers. To keep premiums from spiking while plans adjusted, the Biden administration created a temporary Part D Premium Stabilization Demonstration.2 It paid stand-alone plans about $9.8 billion across 2025 and 2026.6 In July, CMS ended it a year early.1

CMS Administrator Mehmet Oz has called the program a bailout for insurers and says plans have had enough time to adapt.6 He has also said most beneficiaries will see increases of less than $10 a month.2 The Wall Street Journal, as cited elsewhere, reported that losing the subsidy could raise premiums by $11 to $20 a month for about 45% of enrollees.5 Other pressures are also pushing premiums up, including higher drug prices, a more generous benefit, and growing use of expensive GLP-1 drugs.6

This is where the political argument cuts both ways. The administration presents the subsidy cut as discipline toward insurers. For enrollees, though, it means the government stopped absorbing part of the cost and they now pay it. The administration's own decision is one of the clearest reasons for the price increases it is now playing down.

Medicare Advantage: lower premiums, higher limits

CMS has a better headline for Medicare Advantage. It projects the weighted average premium will fall 16.5%, from $14.37 to $12.00, and the drug portion of Advantage premiums will drop 38%, to $7.11 It also says supplemental benefits such as dental, vision, and hearing will stay stable.11

Industry analysts see more cost-shifting underneath those averages. Leerink estimates that premiums for most plans are flat or up about 1%, because CMS's average includes Special Needs Plans.18 Leerink also finds in-network out-of-pocket limits up about 10% and drug deductibles up about 30%.18 The federal ceiling on in-network out-of-pocket costs rises from $9,250 to $9,850.14 Dental cuts reach about 70% of UnitedHealthcare members. Humana reduced or eliminated the Part B premium giveback for 62% of its members.18

The number of plans is also shrinking. According to KFF, the average beneficiary can choose from 28 Advantage drug plans, down from 32. The number of counties with no Advantage drug plan open to general enrollment rose from 123 to 193, affecting about 638,000 people.17 In Ohio, about 250,000 people will lose their current plan.20 One estimate puts the national figure at 3.2 million people whose Advantage plan is ending.13 Insurers appear to have kept advertised premiums low by raising out-of-pocket limits and trimming extras, and a falling average premium doesn't show that.

What the drug deals actually cover

Trump's claim rests mainly on his most-favored-nation agreements and the TrumpRx.gov website. The White House says 26 drugmakers covering about 90% of the branded market have signed on, mostly in exchange for relief from tariffs.32 Independent checks have found mixed results. A KFF comparison of 32 brand-name drugs found TrumpRx prices lower than the average abroad for 17 and higher for 15. Only five were the lowest in the world, and 13 were the highest.31 A Reuters comparison with Britain's National Health Service found about a third of the sampled drugs were cheaper in the UK. It also called Trump's claim of "300% to 600%" savings mathematically impossible.35

For Medicare enrollees, the more important limit is what the deals cover. They mostly affect Medicaid and cash purchases, and leave Medicare and private-insurance prices largely unchanged.34 Money spent through TrumpRx doesn't count toward a patient's deductible.33 The Medicare savings coming in 2027 are from a Biden-era program. Prices negotiated under the Inflation Reduction Act take effect for 15 more drugs, including Ozempic and Wegovy, and CMS estimates they will save enrollees $685 million out of pocket.7 Prescription drug prices did fall 3.1% in the year ending in July, but experts say it's too early to know how much of that the deals caused.33 Drugmakers, meanwhile, are reporting record revenue.37

The Medicaid changes and hospital costs

The bigger change to health care costs arrives on Jan. 1. Under the 2025 budget law, roughly 20 million adults in the Medicaid expansion population must show 80 hours of qualifying activity or $580 in monthly income. They will also have to re-verify eligibility every six months instead of once a year.23 Researchers estimate that up to 10 million people could lose coverage.27 Retroactive coverage for medical bills incurred before enrollment will shrink from three months to one or two.23 Twenty-five states and the District of Columbia are suing over how CMS has defined medical frailty for exemptions.21

Hospitals are likely to absorb much of the cost. The Urban Institute projects $278 billion in additional uncompensated care by 2034.23 Analysts at the Center for American Progress say hospitals typically recover those losses by charging insured patients more.25 In Pennsylvania, uncompensated care fell 27.7% after Medicaid expansion, which shows how much is at risk if coverage shrinks again.26 Oz disputes the predictions. He says no money was taken from Medicaid and that funding was directed to rural health care.25

The bottom line

Taken together, the reporting shows the administration describing a price victory while the costs patients see are moving the other way. Drug-price deals that mostly affect cash buyers and Medicaid do little for a retiree whose Part D premium triples or whose Advantage plan raises its out-of-pocket limit. They also won't offset the hospital costs that Medicaid coverage losses are likely to spread to people with private insurance. For seniors, the practical step is to compare plans before open enrollment ends on Dec. 7.5