Medicare Part D Premiums Are Set to Climb in 2027 — Who May See Higher Bills

Medicare can help retirees lower health care costs, but higher premiums in 2027 could leave some people with less room in their budgets. Increases in both Medicare Part D and Medigap premiums mean certain enrollees may pay noticeably more for coverage. That makes it especially important to review your choices during Medicare open enrollment, which runs from October 15 through December 7.

Here is a look at what is changing and how to get ready.

Part D premium support is ending

The Centers for Medicare & Medicaid Services is ending the Part D Premium Stabilization Demonstration at the close of 2026, a change that could affect what beneficiaries pay for standalone drug coverage. The demonstration was meant to restrain rising Part D premiums and had originally been slated to continue through 2027. But the administration said it would end the program early, describing it as a bailout for insurers that is no longer necessary.

With the demonstration going away, Part D premiums could rise for many beneficiaries in 2027. Because premiums vary by plan, the national base beneficiary premium serves as the starting point for calculating each plan’s price. Not every plan will increase by the same amount, but higher premiums appear likely to be widespread.

What the confirmed increases show

The Medicare Part D base beneficiary premium is rising about 6%, from $38.99 per month in 2026 to $41.33 per month in 2027. Since individual plan premiums are built from that base figure, not every plan will go up by exactly 6%.

The Part D out-of-pocket threshold will increase from $2,100 in 2026 to $2,400 in 2027, an additional $300. For people with high prescription drug spending, that means paying $300 more before reaching the annual limit and getting full drug coverage for the rest of the year.

The standard Part D deductible will also rise, moving from $615 to $700.

How enrollees could be affected

A KFF review of the 2027 Part D figures found that many enrollees may see only modest premium increases in their current plans, while others could face much larger jumps. The analysis suggested that the end of the Premium Stabilization Demonstration did not create a dramatic across-the-board spike, but it likely still influenced 2027 pricing. Some people may see premium increases of more than $50 a month if they stay in the same plan, and KFF said the loss of demonstration subsidies may be part of the reason.

People with Medigap coverage may feel the increase most sharply. If someone has Original Medicare along with Medigap, a standalone Part D plan is priced based entirely on drug spending. Since there are no Medicare Advantage rebates to help reduce premiums, costs can be higher.

Medigap premiums are also rising

Medigap premiums are not set nationally and generally rise on different schedules. Insurers submit their 2027 increases state by state, and most give enrollees notice before the changes take effect.

According to Telos International, Plan G rate increases averaged 16.8% across the industry in 2026.

Why open enrollment is important

If higher premiums, deductibles or out-of-pocket costs make your current plan less attractive, open enrollment gives you a chance to compare options and switch to a better fit. During this period, you may change Medicare Advantage plans, switch drug plans, move from Original Medicare to a Medicare Advantage plan, or go back from Medicare Advantage to Original Medicare.

If you decide on a new plan, your enrollment request must be submitted by December 7. Coverage under the new plan would begin on January 1, 2027.

What to compare before choosing a plan

Before shopping for a new plan, gather details about your current coverage and the changes you expect to see in 2027. Look closely at your new premium, deductible and copayment amounts, and consider whether they fit your budget.

You should also check where each of your prescriptions falls on the plan formulary and think about how that placement could affect what you pay out of pocket. Tier 1 drugs usually have the lowest copays and out-of-pocket costs. Tier 4 and Tier 5 drugs, which are often specialty medications, tend to have the highest costs. If several of your medicines are in higher tiers, another plan may classify them more favorably.

The bottom line

Higher Medicare costs can be frustrating, but open enrollment is your chance to compare plans and make sure your coverage still matches your needs. It may seem appealing to drop Medigap to avoid another premium, but that coverage can help pay copayments, coinsurance and deductibles. Giving it up can also be difficult to undo later.

If you have questions about your coverage, you can call Medicare at 1-800-MEDICARE. You can also contact your local State Health Insurance Assistance Program for one-on-one counseling to help you review your options and choose coverage that fits your retirement goals.

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