Medicare Part D Premiums Set to Shift in 2027 as Temporary Subsidy Ends
A notable change is ahead for Medicare Part D beneficiaries in 2027. The Centers for Medicare & Medicaid Services (CMS) will end the temporary Part D Premium Stabilization Demonstration after 2026. This short‑term subsidy helped insurers offering stand‑alone Part D plans maintain more stable premiums during the rollout of the new out‑of‑pocket cap created under the Inflation Reduction Act (IRA).
With the program ending, insurers will set 2027 premiums without added federal support, meaning prices will once again reflect standard market conditions. Premiums could vary widely, CMS reports Part D enrollees may see premium increases of less than $10 per month, or even a decrease, while others may experience higher changes depending on their plan’s costs and coverage decisions.
What’s Not Changing for 2027
- Annual out‑of‑pocket cap: The cap remains in place and continues to adjust annually for drug‑cost inflation—set at $2,000 in 2025, $2,100 in 2026, and rising to $2,400 in 2027. This limit includes deductibles, copays, and coinsurance for covered Part D drugs. It does not include monthly premiums, drugs not on a plan’s formulary, GLP-1 bridge program, or medications billed under Medicare Parts A or B.
- Insulin costs: All insulin covered under Part D will continue to be capped at $35 per month.
- Drug price negotiations: Medicare’s negotiation program continues to expand. Ten negotiated prices went into effect in 2026, with 15 additional drugs gaining negotiated prices in 2027.
- Prescription Payment Plan: This option remains available, allowing enrollees to spread their out‑of‑pocket drug costs evenly across the year instead of paying large amounts upfront.
What Beneficiaries Should Do Now
- Read your Annual Notice of Change (ANOC). Plans send this letter each September. It outlines your 2027 premium, deductible, and updates to your drug coverage. Reviewing it is the first step in deciding whether your plan still fits your needs.
- Compare plans during Open Enrollment (Oct. 15–Dec. 7). Use Medicare.gov or your state’s Senior Health Insurance Assistance Program (SHIP) for personalized comparisons. While premiums matter, factors like formulary coverage, drug tier placement, and preferred pharmacy networks often have a greater impact on total yearly cost. A plan with a slightly higher premium may still save money if it covers your medications more effectively.
- Check your eligibility for Extra Help. If your income is limited, Extra Help can pay most or all of the Part D premium and significantly reduce cost-sharing. Apply through the Social Security Administration.
- Consider the Medicare Prescription Payment Plan. If you typically incur high drug costs early in the year, this option lets you spread those expenses into predictable monthly payments. It doesn’t reduce what you owe, but it can help avoid high bills in January.
Resources for Assistance
Medicare.gov is the official U.S. government site for Medicare information, including tools to compare plans, coverage, and costs.
State Health Insurance Assistance Programs (SHIP) offer free, unbiased Medicare counseling through trained counselors. Visit shiphelp.org to find your state’s phone number and website.
By Joy Miller, Home and Family Agent, 2026