4 Medicare Part D and Medicare Advantage Changes Set for 2027

Planning for retirement means figuring out whether you can handle health care costs. Medicare, the federal health insurance program for people age 65 and older, is designed to help with that.

But Medicare coverage can shift from year to year, changing prescription costs, available benefits, and the plans offered in your area.

Below are four key updates to Medicare Part D and Medicare Advantage to keep in mind when reviewing coverage choices.

1. Higher Medicare Part D out-of-pocket limit

Medicare Part D helps cover prescription drugs through stand-alone drug plans and Medicare Advantage plans that include drug coverage.

In 2027, the annual out-of-pocket cap for covered Part D medications will be $2,400, up from $2,100 in 2026. The standard Part D deductible will also rise from $615 to $700. These are the standard benefit figures, and some individual plans may have lower deductibles.

Under the standard benefit design, enrollees typically pay the plan deductible first and then their share of covered drug costs. Once eligible out-of-pocket spending reaches the annual cap, catastrophic coverage begins, and there is no further cost sharing for covered Part D drugs for the rest of the calendar year.

Not every prescription expense counts toward the cap. Medications not included in your plan's formulary usually do not count unless coverage is approved through an exception or appeal.

Before enrolling, review your medications, confirm which drugs are covered, and compare costs at the pharmacies you use most. A plan with a lower monthly premium is not always the cheapest option overall.

2. Changes to the Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan lets people with Part D coverage spread eligible out-of-pocket prescription costs across monthly bills instead of paying the full amount at the pharmacy counter. The program began in 2025 and remains available to eligible beneficiaries in 2027.

Participation is optional, and the program does not lower the total amount owed for prescriptions. It simply changes when those costs are paid. Monthly bills can fluctuate during the year, and any remaining balance still must be paid even if you leave the program.

If you are already enrolled, review your plan's notices and instructions before the new plan year starts. Make sure you understand whether your participation will continue and whether you need to take any steps to opt out.

3. Possible reductions in Medicare Advantage benefits

Medicare Advantage, also called Medicare Part C, is a private alternative to Original Medicare offered by insurers that contract with Medicare. Many plans include prescription drug coverage and may add extras such as dental, vision, or hearing benefits.

For 2027, some Medicare Advantage plans are cutting benefits, changing cost-sharing rules, or leaving certain service areas. That means your current plan may not offer the same coverage next year, even if the insurer remains in your region.

The expiration of temporary federal subsidies that helped offset Part D premiums could also influence the cost of some drug coverage. While the federal government expects only modest premium increases for many beneficiaries, your actual costs will depend on the plan you choose and the coverage you need.

Check your Annual Notice of Change to see whether premiums, prescription coverage, provider networks, or extra benefits are being adjusted. Then compare those details with other available plans before making a decision.

4. Fewer Medicare Advantage options in some areas

Medicare Advantage availability is shifting nationwide for 2027, and some people may have fewer choices than before.

According to an analysis by KFF, UnitedHealth Group is exiting 228 counties and entering nine for 2027. Humana is exiting 62 counties and entering four. These changes reflect where the companies offer Medicare Advantage prescription drug plans and do not necessarily mean every member in those counties will lose coverage.

KFF also found that 193 counties will have no Medicare Advantage prescription drug plans available for general enrollment in 2027, up from 123 counties in 2026.

If your plan is ending, your insurer should notify you and explain your options. You may be able to pick another Medicare Advantage plan or return to Original Medicare. If you do return to Original Medicare, consider whether you need a separate Part D drug plan and whether supplemental coverage is available.

Do not assume your current plan will still be the best fit. Compare the plans available in your area, including provider networks, drug formularies, premiums, deductibles, and out-of-pocket costs.

What to know about Medicare open enrollment

Medicare's annual open enrollment period runs from Oct. 15 through Dec. 7 for coverage that starts Jan. 1, 2027. Use that window to review your current coverage and decide whether another plan better matches your health care needs and budget.

There are several enrollment periods to keep in mind:

1) Initial Enrollment Period: This usually applies when you first become eligible for Medicare. For people turning 65, it lasts seven months: the three months before the birthday month, the birthday month, and the three months after.

2) Annual Open Enrollment Period: From Oct. 15 through Dec. 7, eligible beneficiaries can join, switch, or drop a Medicare Advantage plan or a Medicare Part D prescription drug plan. Changes generally take effect Jan. 1.

3) Medicare Advantage Open Enrollment Period: From Jan. 1 through March 31, people already enrolled in Medicare Advantage can generally switch to another Medicare Advantage plan or return to Original Medicare. They can also join a separate Part D plan if they return to Original Medicare.

4) Special Enrollment Period: Certain life events, such as moving outside your plan's service area or losing qualifying coverage, may allow you to change plans outside the usual enrollment windows. Eligibility and deadlines depend on the situation.

Review your plan documents and use Medicare's official plan comparison tools to check your choices. If you need help, your State Health Insurance Assistance Program offers free, personalized Medicare counseling.