More Than 1 Million Medicare Part D Enrollees Must Find New Coverage Before December 7 to Avoid Gaps and Penalties

More than 1 million people enrolled in standalone Medicare drug plans will lose that coverage for 2027 and need to select a new plan, according to an estimate from consulting firm Oliver Wyman reported by KEYT. The open enrollment period closes on December 7, and choosing a plan by that date is the easiest way to avoid a gap in prescription coverage on January 1.

The consequences can stretch well beyond a single year. Staying without drug coverage for too long can lead to a Part D late enrollment penalty that gets added to monthly premiums for as long as a person keeps Medicare drug coverage.

For adult children assisting older parents, this is a paperwork issue with very real effects. If a non-renewal notice is overlooked, a parent could begin the new year without coverage for everyday medications.

Fewer Plans, Higher Costs Ahead

The disruption is broad. CVS Health's Aetna is exiting the standalone Part D market in roughly half of states, based on Oliver Wyman's estimate. KFF also found that no standalone drug plan will carry a $0 premium in 2027 for people who do not receive Extra Help.

KFF said the average beneficiary will have nine standalone Part D plans available in 2027, down from 11. The Centers for Medicare and Medicaid Services expects the average premium to edge up to about $36 a month, though some plans are increasing far more sharply. In Fairfax County, Virginia, one plan is rising from $39.60 to $121.90 a month, according to Consumers' Checkbook.

Some of the increase is tied to the end of a temporary federal program that helped restrain premiums in 2025 and 2026. CMS confirmed in its 2027 Part D fact sheet that the demonstration ends after 2026.

Out-of-pocket limits are also moving higher. WLOX reported that the annual cap on covered drug costs is increasing from $2,100 to $2,400 in 2027, while the standard deductible is rising from $615 to $700.

A Penalty That Can Follow You for Years

Under Medicare's rules, someone who goes 63 days or more in a row without Part D or other creditable drug coverage may face a late enrollment penalty. The charge equals 1% of the national base beneficiary premium for each full month without coverage.

CMS has set that base premium at $41.33 for 2027. For example, a 10-month gap would add about $4.10 a month after rounding. Medicare says, "this monthly penalty is added for as long as you have Medicare drug coverage." The amount changes as the base premium changes from year to year.

People whose plans are not renewing do have a backup option. According to Medicare Interactive, a special enrollment period generally runs from December 8 through the end of February. Still, anyone in a standalone plan who has not selected a new one by December 31 will start January 1 without drug coverage, which can mean paying full price at the pharmacy for weeks.

Those who qualify for Extra Help are treated differently. They are generally enrolled automatically in a drug plan and do not owe the penalty.

How to Use the Plan Finder with an Updated Medication List

Begin by collecting every prescription, including the drug name, dosage, and how often it is taken. Be sure to include medicines prescribed by all doctors and any that are filled by mail.

Next, visit Medicare.gov and use the Plan Finder. Enter each drug and your preferred pharmacies, then sort the results by lowest total cost, which combines the premium with expected annual drug costs. Checkbook recommends this approach instead of selecting the plan with the lowest premium alone.

After that, verify that each medication is listed on the plan's formulary and check whether prior authorization or step therapy applies. Make sure your pharmacy is in network, especially if you live in a rural area or use an independent local pharmacy.

Finally, enroll and save the confirmation number. Selecting a plan by December 7 ensures coverage begins on January 1 without a gap.

Free Help and the People Most Exposed

Those most likely to be affected include people taking several brand-name medications, people who have not opened mail from their plan, and seniors who depend on relatives for paperwork. People with lower incomes should check whether they qualify for Extra Help.

Free, unbiased counseling is available through each state's State Health Insurance Assistance Program, or SHIP. Checkbook notes that brokers may earn larger commissions from some insurers and may not present every available option.

"It's more important than ever to shop around, compare your options, and choose the coverage that's best for you," said Nancy LeaMond, AARP's executive vice president and chief advocacy officer.

The deadline is fixed, but the task is manageable. Reviewing plans with an updated medication list before December 7 can help prevent a coverage gap, an unexpected bill, and a penalty that could last for years.

Key Questions Answered

When does Medicare open enrollment end?

December 7. Plans selected by then begin on January 1.

How many people are losing Part D plans?

More than 1 million people with standalone Part D plans will need new coverage for 2027, according to an Oliver Wyman estimate.

What triggers the late enrollment penalty?

Going 63 days or more in a row without Part D or other creditable drug coverage.

How much is the penalty?

It equals 1% of the national base beneficiary premium, which is $41.33 in 2027, for each full month without coverage. It remains in place for as long as you have Medicare drug coverage.

What if I miss the deadline and my plan is ending?

A special enrollment period for non-renewed plans generally lasts through the end of February, but you may not have drug coverage in the meantime.

Where can I get free help?

Your State Health Insurance Assistance Program provides free, unbiased Medicare counseling.