Medicare Costs Are Changing in 2027: What Seniors Need to Know
Millions of Americans could see a break on their Medicare plans next year, offering a bit of good news in today's tough economy. Here is a look at what the plans are expected to cost seniors in 2027.
CMS Announces 2027 Medicare Costs
The Centers for Medicare & Medicaid Services (CMS) recently unveiled prices for private Medicare plans in 2027. Monthly premiums for Medicare Advantage plans are projected to average $12 next year. This is down from this year's average of $14.37. Most of these plans include medical and prescription drug coverage.
CMS also announced that the average monthly premiums for stand-alone Part D prescription drug plans will cost $36 next year. This represents an increase of less than $1 from the current price of $35.09.
You will have several weeks to consider your options if you lean on any of these plans. Insurance companies that provide privately administered Medicare Advantage plans and Part D prescription drug plans are required to notify their enrollees about changes to monthly premium costs, prescription drug coverage, and provider networks by September 30. Customers can then make changes to their plans during the Medicare open enrollment period of October 15 through December 7. Coverage for the new plans will begin on January 1, 2027.
“Every year, it's good to take stock and assess whether your plan is still meeting your needs or whether there's a better option out there," said John Brooks, director of Medicare at CMS. Brooks also advised enrollees that "The stability of the marketplace and the lower cost for most beneficiaries suggests that beneficiaries should have good options heading into this enrollment season.”
According to CMS, roughly eight in 10 Medicare Advantage enrollees will be allowed to retain their coverage with the same or lower premium in 2027. This is good news for seniors who have borne the brunt of rising grocery prices and other goods on fixed incomes.
CMS also detailed that 97% of Medicare enrollees will have access to 10 or more Medicare Advantage plan options. The variety of plans is holding steady. For context, CMS said that the total number of Medicare Advantage plans offered nationwide was 5,553 in 2026, compared to 5,532 expected in 2027. The agency did not specify what percentage of plan enrollees will need to find a new plan in 2027 because the current one will not be available.
Importance of Looking at Details of New Plans Before Enrolling
Health policy experts remind enrollees to review the fine details of their plans to ensure they still meet their needs in 2027. For example, some Part D plans might try to lower costs by reducing the number of prescription drugs that they cover. It is vital that enrollees verify that all of the drugs that they need will be covered under the new parameters.
While Medicare Advantage plans are attractive to seniors because of the low monthly premiums, insurers could take away some coverage to keep these costs to consumers in check. According to Juliette Cubanski, vice president and director of the program on Medicare policy for KFF, a health policy nonprofit, "Other changes underneath the hood is the coverage they offer. If they need to decrease costs, that might come in the form of higher cost sharing for prescription drugs or reducing the number of prescription drugs they cover."
Approximately 25 million Americans are enrolled in stand-alone Medicare Part D plans. This type of coverage is typically combined with a traditional government-run Medicare insurance plan. An additional 31 million Americans use Medicare Advantage, a specific type of coverage administered by private insurance companies. Medicare Advantage plans usually include prescription drug coverage, as well as services not always covered by traditional Medicare.
The Trump White House previously said that the Inflation Reduction Act of 2022 sent costs for prescription drug coverage higher. The climate and health care law instituted a $2,000 maximum on what Medicare enrollees have to pay out of pocket for their prescription drug coverage in 2025. This maximum jumped to $2,100 this year.
The Biden administration instructed CMS to create a "demonstration project" that funneled subsidies to insurance companies so that they could pass on the lower costs to consumers. The subsidies cost the federal government approximately $9.8 billion in 2025 and 2026. Some experts believe that eliminating this demonstration project would likely translate to higher Part D prices for enrollees in 2027.
Looking for stories that inform and engage? From breaking headlines to fresh perspectives, WaveNewsToday has more to explore. Ride the wave of what’s next.