Health insurance 2027: Part D premiums are expected to rise next year

Open enrollment period for Medicare recipients opens Oct. 15 and will run through Dec. 7. This is the time when Medicare and Medicare Advantage members can make changes to their health insurance coverage for 2027.

Recipients will soon receive information in the mail from Medicare to help explain the changes for the coming year. The Medicare & You 2027 guideline includes details about Medicare plans. You may also receive an Annual Notice of Change letter from your current health insurer and prescription drug plan.

The information you receive is crucial to making smart choices for the coming year, says Anne Sparkle, a Nassau County volunteer with SHINE of Northeast Florida. SHINE (Serving Health Insurance Needs of Elders) offers seniors, adults with disabilities and their caregivers free, unbiased counseling on Medicare health insurance issues.

“People should always open their mail, even if it’s a tiny chance the mail is from their insurance companies,” she says. “Too often people toss things as junk mail when it’s a notice of a change in their health plan.”

Price changes may be eye-popping this year, especially for Part D, which is the prescription drug plan, Sparkle says. A federal program implemented to keep premiums lower through subsidies will expire at the end of this year. However, the Centers for Medicare and Medicaid Services (CMS) disputes accusations that expiration of that program will significantly impact consumers. CMS recently issued a news release saying that average premiums for stand-alone Part D prescription drug plans are projected to rise by an average of less than $1 per month.

For Part D participants, however, the annual cap on out-of-pocket drug expenses will rise — from a $2,100 cap in 2026 to $2,400 next year.

“That is still a great benefit,” Sparkle says.  The annual cap on out-of-pocket medication expenses took effect a few years ago, she says, adding, “There used to be a donut hole, and people were paying a lot for their drugs.”

Moreover, consumers will see prices drop on more popular drugs, thanks to the Medicare Drug Price Negotiation Program signed into law in 2022 by President Joe Biden. Lower prices were negotiated on 15 popular drugs in 2026, and 15 more will be added to the negotiated-price list for 2027. They include: Ozempic, Rybelsus, Wegovy; Trelegy Ellipta; Xtandi; Pomalyst; Ofev; Ibrance; Linzess; Calquence; Austedo and Austedo XR, Breo Ellipta; Xifaxan; Vraylar; Tradjenta: Janumet and Janumet XR; Otezla and Otezla XR.

Total drug costs, however, can depend on your Part D plan, Sparkle says. The negotiated prices “are certainly a good thing. But it doesn’t mean they’re going to be cheaper. They are going to be less expensive.”

Moreover, according to CMS, the maximum Part D deductible will increase to $700 in 2027, up from $625 in 2026.

People who enroll in original Medicare will also likely see price increases on supplemental plan premiums next year, although it’s unclear how much premiums will rise — or how many plans consumers will be able to choose from.

One of the hardest choices for many seniors, Sparkle says, is between original Medicare and Medicare Advantage Plans. According to CMS:

Part A covers inpatient care at hospitals and skilled nursing facilities (free for most).

Part B covers office visits and preventive care (monthly premium).

Part C is Medicare Advantage, plans that combine A, B and D.

Part D is prescription drug coverage (involves a fee if you are not already in Medicare Advantage).

Medicare Advantage enrollees may be impacted far less by cost increases, according to the CMS. On average, Medicare Advantage premiums will fall more than 16% in 2027 and prescription drug premiums under Medicare Advantage will fall 38%, the agency said in a Sept. 28 news release.

The agency said that, in most locations around the country, Medicare beneficiaries will be able to choose from a large selection of Medicare Advantage plans.

According to CMS, more than 47% of Medicare participants are enrolled in Medicare Advantage plans. However, Sparkle cautions consumers to weigh the pros and cons of each kind of coverage.

Many Medicare Advantage plans advertise a $0 premium. But that does not include copays, coinsurance, deductibles, drug costs and maximum out-of-pocket costs. Consumers need to look at the total cost of care, she says.

“Medicare Advantage is good for people who can’t afford to get Medicare with a supplement policy,” she says. “If people can afford it, the best way to go is to get [original] Medicare with a supplemental plan.”

Supplemental plans on original Medicare typically cost from $150 to $230 a month, she says, adding: “At least you know what your costs are.”

Medicare Advantage plans often restrict which health care providers you can see and, sometimes, even your options for care, she says.

Medicare Advantage plan managers “have become very stingy about making you jump through hoops before they cover you,” Sparkle says. “It gets very complicated.”

Some Medicare Advantage plans offer vision and dental services, she adds.

“If you want your teeth cleaning paid for every year, that’s fine. But medical insurance should be about medical issues. People should focus on that.”

Some vision care is typically covered under original Medicare, she adds.

If you are happy with your current plan, you don’t need to do anything, Sparkle says. Your plan will automatically renew for the next year at the new set of prices. If your health has changed this year or if you suspect you will require surgery or different medications next year, it is prudent to take a hard look at all your options.

CMS is also urging consumers to beware of Medicare fraud. Agents and brokers who represent Medicare plans need your permission before contacting you. Hang up on any unwanted call pitching a Medicare plan.

Consumers will find tools for comparing and choosing plans at Medicare.gov. Medicare beneficiaries can also call 1-800-MEDICARE for help comparing plans.

You may also wish to consult with your insurance agent or a member of SHINE of Northeast Florida. Call 888-242-4464 to schedule an appointment with a SHINE counselor.

“SHINE can set you up with an appointment, and we will have people find the best option for you,” Sparkle says. “Health insurance is very complicated. That’s why we’re here.”