Savvy Senior: Ways to reduce Medicare costs in 2027

Dear Savvy Senior,

I’m enrolled in Medicare. What changes should I expect, and how can I avoid overpaying for my coverage?

—Careful Shopper

Dear Careful,

If you have Medicare, this is a good time to check whether you’re getting the best value for your money. Open enrollment runs through Dec. 7, giving you a chance to switch Medicare Advantage or prescription drug plans for 2027. Because costs, drug coverage and extra benefits can shift from one year to the next, comparing plans now may save you money and frustration later.

Even if you like your current plan, don’t assume next year will look the same. Here’s what to watch.

Prescription drug changes

Medicare Part D prescription drug plans are changing, and some enrollees may pay more. In 2027, the maximum annual deductible will increase from $615 to $700, and the annual out-of-pocket cap for covered Part D medications will rise from $2,100 to $2,400.

That cap helps shield people who rely on costly medications. Average premiums for stand-alone Part D plans are expected to rise by less than $1 a month, but individual plans can vary widely. A temporary federal program that helped keep premiums stable is also ending, which makes comparison shopping especially important.

Your insurer may also revise its formulary, or move a drug to a higher-cost tier. Make sure your prescriptions are still covered and find out what you will pay for them.

Medicare Advantage changes

If you have Medicare Advantage, the private alternative to Original Medicare, review your plan carefully. Some insurers are dropping plans or leaving certain markets, while others may raise costs or reduce extra benefits such as dental, vision and hearing coverage.

Doctor, specialist and hospital networks can also change. If your plan is being discontinued, you will need to find new coverage. Even if it stays in place, compare next year’s costs, benefits and provider networks before you renew automatically.

Help with weight-loss drugs

A new Medicare GLP-1 Bridge program provides eligible beneficiaries certain weight-management medicines for $50 a month through Dec. 31, 2027. Covered drugs include Wegovy, Zepbound (KwikPen only) and Foundayo.

Eligibility is limited. In general, you must have Medicare drug coverage and meet specific body mass index and health requirements. The program works separately from regular Part D coverage, so the $50 monthly payment does not count toward your Part D deductible or annual out-of-pocket limit.

Learn more and check eligibility at Medicare.gov/coverage/weight-loss-drugs.

How to shop smart

Here are four ways to find coverage that meets your needs without paying too much.

Read your plan notice: Your insurer should send an Annual Notice of Change explaining next year’s premiums, deductibles, copayments and coverage updates. Medicare Advantage members should also review provider networks and extra benefits.

Compare total costs: Visit Medicare.gov/plan-compare. Enter your medications and preferred pharmacies to compare plans and estimate yearly costs. Don’t focus only on premiums; include deductibles and what you will pay for prescriptions.

Check your doctors: If you are considering Medicare Advantage, contact your doctors and hospitals directly to confirm they will accept the specific plan in 2027. Online directories can be outdated.

Get free help: Your State Health Insurance Assistance Program (SHIP) offers free, unbiased Medicare counseling. Find a local counselor at ShipHelp.org or call 877-839-2675.

One important warning: If you are thinking about switching from Medicare Advantage to Original Medicare, check your Medigap options first. In most states, insurers can deny you a Medigap policy or charge higher premiums based on your health history if you do not qualify for guaranteed-issue protections. Be sure you understand your choices before dropping your current plan.

Take time to compare plans before Dec. 7. A little work now could save you money and help you begin 2027 with better coverage.