Key Medicare Updates Coming in 2027 Before You Compare Plans

If you are approaching retirement or already covered by Medicare, the changes slated for 2027 could affect both your coverage and your out-of-pocket expenses. Knowing what is ahead can help you make smarter choices when it is time to compare plans during open enrollment. Here are eight important shifts to keep in mind so you can avoid costly surprises.

Medicare costs are expected to rise

Part B costs are projected to go up in 2027. The standard monthly premium is expected to move from $202.90 to $209.50, an increase of about 3.3%. The annual deductible is also forecast to rise from $283 to $292, or roughly 3.2%. Beneficiaries with higher incomes may pay more for Part B coverage.

These increases reflect broader health-care inflation and ongoing pressure on Medicare financing. Retirees should factor the higher costs into their budgets now rather than wait to adjust later.

A larger federal deficit could create pressure for Medicare cuts

The One Big Beautiful Bill Act raised concerns about possible Medicare spending cuts because of its effect on the federal deficit. The Congressional Budget Office estimated that the legislation could add $3.4 trillion to the deficit between 2025 and 2034.

Under the Statutory Pay-As-You-Go Act of 2010, that increase could have triggered automatic spending reductions, including an estimated $45 billion in Medicare cuts in fiscal year 2026 and $536 billion in total from 2026 through 2034. Those reductions would have affected payments to health-care providers and could have created financial strain for hospitals and other facilities that serve Medicare beneficiaries.

Congress later passed legislation that zeroed out the PAYGO scorecards, preventing those projected cuts from taking effect. Even so, budget pressure and future policy decisions could still influence Medicare funding, provider payments, and access to care.

Prior authorization could apply to more services

Some Medicare-covered services and procedures, including electrical nerve stimulator implants, skin and tissue substitutes, and knee arthroscopy, may require prior authorization in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. In practice, that means approval may be required before certain treatments or drugs are covered.

Nearly all people enrolled in Medicare Advantage plans already face prior authorization for some types of care.

That makes it important to review your plan's rules carefully and consider switching if your current coverage becomes more restrictive.

Medicare Advantage plans may offer fewer extras

If you are enrolled in Medicare Advantage, supplemental benefits such as meal delivery, transportation, or other non-medical perks may be reduced as new federal rules take effect.

Before renewing a Medicare Advantage plan, compare the full list of benefits rather than assuming the extras you had before will still be included.

Prescription costs may be spread out automatically

People with Part D prescription drug coverage will be automatically enrolled in the Medicare Prescription Payment Plan, which allows drug costs to be spread across the year instead of paid in large lump sums.

That may make budgeting easier, especially for people taking multiple medications, though monthly payments will still depend on how the plan calculates the amount. You can also choose to opt out if you prefer.

There will be a cap on out-of-pocket drug spending

Under Part D, the out-of-pocket limit for covered prescription drugs will be capped at $2,400. After reaching that amount, you will no longer owe copays or coinsurance for covered drugs for the rest of the year.

This protection may be especially valuable for people with chronic conditions or high-cost medications.

Insulin may cost less

If you use insulin, the Medicare cost cap remains in place in 2027, and some prescriptions may cost even less than $35 per month. Under Part D, the monthly amount for each covered insulin product is capped at the lower of $35, 25% of the negotiated price, or 25% of the drug's maximum fair price under Medicare's negotiation program.

Under Part B, the $35 monthly cap still applies to insulin used with covered durable insulin pumps, and the Part B deductible does not apply to that insulin.

Some prescription drug prices should come down

Thanks to the Inflation Reduction Act of 2022, Medicare can negotiate directly with drug makers for certain expensive brand-name medicines that do not face generic or biosimilar competition.

The first wave of negotiated prices, covering 10 prescription drugs, took effect earlier. A second round covering 15 additional medications is scheduled to take effect in 2027.

First 10 drugs — prices effective earlier

• Eliquis
• Jardiance
• Xarelto
• Januvia
• Farxiga
• Entresto
• Enbrel
• Imbruvica
• Stelara
• Fiasp/NovoLog

Next 15 drugs — prices effective in 2027

• Ozempic / Rybelsus / Wegovy
• Trelegy Ellipta
• Xtandi
• Pomalyst
• Ofev
• Ibrance
• Linzess
• Calquence
• Austedo / Austedo XR
• Breo Ellipta
• Xifaxan
• Vraylar
• Tradjenta
• Janumet / Janumet XR
• Otezla / Otezla XR

The program is expanding gradually and should create another opportunity for eligible seniors to save on prescription costs.

If you take specialty medications, ask your plan how these negotiations may affect your formulary or copays.

The bottom line

The Medicare changes expected in 2027 mean you should not assume your current plan's costs and benefits will stay the same. Some expenses may rise, some benefits may shift, and your plan selection could matter more than ever.

Take time to review your Medicare options carefully, compare coverage for the coming year, and build these changes into your broader retirement planning so you are not caught off guard during open enrollment.