12 Changes to Both Medicare Part D and Medicare Advantage Taking Effect in 2027

If you have Medicare Advantage or Part D, you'll want to pay close attention to the paperwork you'll be receiving this fall to help you avoid money mistakes. Medicare plans send an Annual Notice of Change each fall explaining changes to coverage, costs, and other plan details for the coming January. And Medicare Open Enrollment runs from Oct. 15 through Dec. 7.

There are meaningful changes coming for 2027, including higher Part D cost thresholds, new rules governing some Medicare Advantage extras, and changes to the way plans and brokers can market coverage. Here are 12 changes to watch as you compare your 2027 options.

Editor's note: Medicare cost figures and 2027 rule changes are based on Centers for Medicare & Medicaid Services (CMS) guidance. Actual premiums, copays, formularies, and supplemental benefits vary by plan and location.

The standard Part D deductible jumps to $700

The standard Part D deductible rises from $615 in 2026 to $700 in 2027. That's the maximum deductible under the defined standard benefit, but it doesn't mean every plan will charge you $700. Medicare notes that some drug plans have lower deductibles or no deductible at all, so check your individual plan before assuming you'll owe the full amount.

The Part D out-of-pocket cap rises to $2,400

The Part D annual out-of-pocket threshold increases from $2,100 in 2026 to $2,400 in 2027. Once you hit that threshold, you enter catastrophic coverage, where you pay no cost sharing for covered Part D drugs for the remainder of the year. But not everything counts towards the cap.

The cap only applies to covered drugs

Money you spend on just any prescription doesn't necessarily move you toward that $2,400 limit. Generally, costs for non-formulary Part D drugs don't count toward your out-of-pocket total unless the plan treats the drug as covered following a coverage determination or appeal. If you need a drug that's missing from your plan's formulary, you or your prescriber can request a formulary exception.

Part D keeps its simpler three-phase structure

The old coverage gap, often called the donut hole, isn't coming back. Part D now has a three-phase structure consisting of the deductible, initial coverage, and catastrophic coverage phases. Under the standard design, you pay 100% during the deductible phase and generally 25% during initial coverage before reaching catastrophic coverage, when your cost sharing for covered Part D drugs drops to zero.

The insulin and vaccine protections remain

Two valuable Part D protections continue in 2027. For covered insulin, monthly cost sharing can't exceed the lesser of $35, 25% of the drug's Medicare-negotiated maximum fair price, or 25% of its plan-negotiated price. Medicare also continues to require no deductible, coinsurance, or other cost sharing for covered adult vaccines recommended by the Advisory Committee on Immunization Practices.

Another 15 negotiated drug prices take effect

The next round of Medicare-negotiated prices arrives Jan. 1. Centers for Medicare & Medicaid Services (CMS) says negotiated prices for 15 Part D drugs take effect on Jan. 1, 2027. The list includes Ozempic, Rybelsus, Wegovy, Breo Ellipta, Ibrance, Linzess, Trelegy Ellipta, and several other drugs.

Medicare's Star Ratings formula is changing

For the 2027 Star Ratings, CMS won't implement the planned Health Equity Index reward and will instead keep the existing reward factor. Star Ratings matter financially because they help determine Medicare Advantage quality bonus payments and affect plan rebates.

CMS is also removing 11 measures, although most of those removals affect later Star Ratings rather than the 2027 ratings themselves.

Supplemental-benefit debit cards get tighter controls

Some Medicare Advantage plans use debit cards for supplemental benefits, but the cards aren't supposed to function like unrestricted spending money.

CMS is requiring them to be electronically linked to covered items and services with real-time eligibility verification at the point of sale. CMS says plans that can't appropriately restrict a card to covered benefits shouldn't use a debit card to administer those benefits.

Plans must spell out who qualifies for certain extras

Some Medicare Advantage plans offer Special Supplemental Benefits for the Chronically Ill, which can include benefits beyond standard medical care.

Beginning with 2027 coverage, CMS is requiring plans to make their plan-developed eligibility criteria for these benefits publicly available. The goal is to make it easier for enrollees to understand whether they actually qualify for benefits advertised by a plan.

Don't expect a midyear reminder about unused extras

CMS previously adopted a rule requiring Medicare Advantage plans to tell members about supplemental benefits they hadn't used during the first six months of the year. That requirement has now been scrapped.

CMS rescinded the requirement for Medicare Advantage plans to send annual midyear notices about unused supplemental benefits, meaning it's increasingly important to keep track of the extras included in your plan yourself.

Medicare Advantage marketing rules are loosening

Some sales conversations may move faster. CMS has eliminated the 48-hour waiting period between completing a Scope of Appointment and discussing plan products with an agent or broker.

Agents must still get the required agreement first, but you can complete it immediately before discussing plan options. Third-party marketers also only have to give their required disclaimer before discussing specific plan benefits during a sales call.

Medicare Advantage plans are getting more federal money

CMS projects that its 2027 payment policies will produce a 2.48% average increase in Medicare Advantage payments, worth more than $13 billion. But more money reaching insurers doesn't guarantee that your particular plan will offer lower copays or richer extras.

Medicare Advantage organizations still design their individual benefits, premiums, and cost sharing, so the changes you'll actually see depend on the plan available where you live.

Bottom line

Don't judge your 2027 coverage by its premium alone, as this is a fast way to derail your retirement plan. Your Annual Notice of Change is specifically intended to show what's changing in your plan's coverage and costs for the coming year. Compare that notice with the prescriptions you take, your preferred pharmacies and providers, and any dental, vision, food, transportation, or other supplemental benefits you actually use.

You don't have to wait for enrollment to officially open before doing your homework, either. Medicare says you can start comparing your current coverage with 2027 plan options on Oct. 1, 2026, while Open Enrollment for 2027 coverage runs from Oct. 15 through Dec. 7, 2026. That gives you two weeks to compare before you can start making changes.

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