Medicare Part D Costs Are Rising in 2027 - Here's Who Could Pay More

Programs like Medicare may help seniors save money in retirement, but 2027 premium increases may actually leave you with less money in your pocket. Increases in both Medicare Part D and Medigap premiums mean some enrollees could pay substantially more for their policies in 2027. This is all important information to consider during Medicare open enrollment, which runs from October 15 through December 7.

Here's what you should know about the increases and what you might want to do to prepare.

The end of the Part D premium stabilization

The Centers for Medicare & Medicaid Services (CMS) is ending the Part D Premium Stabilization Demonstration at the end of 2026, which may impact what beneficiaries pay for their Part D standalone drug coverage. The demonstration was designed to help regulate increased Medicare Part D premiums and was originally intended to last through 2027. However, the current administration announced that the Demonstration was ending early, calling the program a "bailout" for insurance companies that is "no longer needed."

As the demonstration ends, Part D premiums may go up for many beneficiaries in 2027. Since premiums are plan-specific, the national base beneficiary premium functions as a starting point to calculate each plan's premium. Plans shouldn't all jump by the same amount, but it's likely that increases may be common in 2027.

The confirmed Part D premium increases

The Medicare Part D base beneficiary premium rises about 6% from $38.99 per month in 2026 to $41.33 per month in 2027. Individual plan premiums are calculated using that base premium, so every plan may not increase by exactly 6%.

The Medicare Part D out-of-pocket threshold increases from $2,100 in 2026 to $2,400 in 2027, a jump of $300. That means that beneficiaries who have high prescription costs may have to pay an extra $300 before they reach the program's annual limit and don't have to pay for medications for the rest of the year.

The standard Medicare Part D deductible increases from $615 to $700, a jump of $85.

How the increases may affect enrollees

KFF analysis of the 2027 Medicare Part D figures found that many Part D enrollees might see modest premium increases in their current plans, while others might see steeper increases. The analysis found that the end of the Part D Premium Stabilization Demonstration didn't cause substantially higher across-the-board premiums, but it still probably affected premiums for 2027. Some enrollees may see increases of more than $50 per month if they keep their current plan, and KFF hypothesizes that the increase may be due to the end of the subsidies that the demonstration provided.

Medigap holders may feel the cost increases the most. If an individual is enrolled in Original Medicare plus Medigap, then their standalone Part D plan's price is purely based on drug spending. There are no Medicare Advantage rebates to bring the premiums down, so prices may climb.

The Medigap premium increases

Medigap premiums aren't uniform nationally, and they rise on their own schedule. Insurers file their 2027 increases state by state, and most notify enrollees of increases before they take effect.

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

Why open enrollment matters

If changes in premiums, deductibles, and out-of-pocket maximums mean your current plan is no longer the best fit for you, open enrollment gives you the opportunity to shop for a new plan that may be a better choice. During open enrollment, you may change your Medicare Advantage plan, change your drug plan, or switch from Original Medicare to a Medicare Advantage Plan, or from a Medicare Advantage Plan to Original Medicare.

If you choose a new plan, you must submit your enrollment request by December 7. Your enrollment then becomes effective on January 1, 2027.

The factors to consider during open enrollment

Before you start shopping for a new plan, it's important to gather information on your current plan and the changes you'll see in 2027. Consider your new premium, deductible, and copayment information, and think about whether they fit into your budget.

Additionally, review the formulary placement for each prescription you currently take and think about how that placement might affect your out-of-pocket costs. For example, Tier 1 medications have the lowest out-of-pocket costs and copayments. Tier 4 and 5 medications, which tend to be specialty medications, have some of the highest out-of-pocket costs and copayments. If several of your medications are higher tiers, you might want to look for a plan that categorizes the drugs differently.

Bottom line

The increases in Medicare premiums may be frustrating and overwhelming, but take advantage of open enrollment to shop around and make sure you have the best coverage for your needs. It might be tempting to drop Medigap coverage so you don't have an extra payment, but your Medigap policy may help you pay for copayments, insurance, and deductibles. Dropping your Medigap policy may be hard to reverse.

If you have questions about your coverage, you may call the Medicare support line at 1-800-MEDICARE. Alternatively, check with your local State Health Insurance Assistance Program to access one-on-one counseling to help you review plans and choose coverage that supports your retirement goals.

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