Medicare beneficiaries will see important changes in 2027, particularly in prescription drug coverage. Although final premiums and individual plan offerings will not be released until fall 2026, federal officials have already finalized several major policies.
The most noticeable prescription drug change is an increase in the standard Medicare Part D cost limits. In 2027, the maximum deductible will rise from $615 to $700. The annual out-of-pocket threshold will increase from $2,100 to $2,400. Once a beneficiary’s qualifying out-of-pocket spending reaches that threshold, the person enters catastrophic coverage and pays nothing for covered Part D medications for the remainder of the year. Individual plans may offer lower deductibles or different copayments.
The redesigned Part D structure will continue to have three stages: the deductible, initial coverage, and catastrophic coverage. The former “donut hole,” or coverage-gap stage, is eliminated. During the standard initial-coverage stage, beneficiaries generally pay 25 percent of covered drug costs. CMS has now formally placed these Inflation Reduction Act reforms into its regulations for 2027 and future years. CMS’s 2027 final-rule fact sheet
Another major development involves Medicare’s Drug Price Negotiation Program. Negotiated prices for 15 additional high-cost Part D drugs will take effect January 1, 2027. These drugs treat conditions including diabetes, cancer, asthma, and other chronic illnesses. Combined with the 10 negotiated drug prices taking effect in 2026, Medicare will have negotiated prices for 25 medications by 2027. Savings for an individual will depend on the medication, plan formulary, and cost-sharing rules.
Part D premiums also warrant attention. The national base beneficiary premium—the figure used to help calculate plan-specific premiums—will be $41.33 in 2027. That is not necessarily what an enrollee will pay: actual premiums vary by plan, location, income and whether a late-enrollment penalty applies. CMS is also ending the temporary Part D Premium Stabilization Demonstration for stand-alone drug plans after 2026. Consequently, beneficiaries should pay close attention to premium changes when comparing 2027 plans.
For Medicare Advantage, CMS projects that payments to plans will increase by an average of 2.48 percent, or more than $13 billion. Higher federal payments do not guarantee lower premiums or richer benefits, however; each insurer determines its own premiums, provider network, copayments, and supplemental benefits. CMS is also revising Star Ratings by removing 11 largely administrative measures and retaining the existing reward system for consistently high-performing plans.
Beneficiaries should review their Annual Notice of Change carefully and compare plans during Medicare Open Enrollment, October 15 through December 7, 2026. Formularies, pharmacy networks, prior-authorization requirements, and total annual costs may change even when a plan’s name does not. If you have questions or concerns visit mymedicareguy.com and schedule an appointment with Grant Chapman to discuss your plan.
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