8 Medicare Changes Set To Take Effect in 2027

Medicare may help you save money in retirement while getting the health care you need, but to receive the maximum value from your coverage, you need to sign up for the plan that's the best fit for your needs. Several changes are coming to Medicare in 2027, meaning it's essential to review the changes, see how your plan is affected, and possibly even change plans if needed.

Here are the changes coming to Medicare in 2027 that you need to know about and that you may want to consider during Open Enrollment, which runs from October 15 through December 7.

Limited standalone Medicare Part D options

Standalone Medicare Part D prescription drug plans (PDPs) are increasingly limited. In 2021, approximately 30 plans were available, but by 2026, just 11 plans remained. Since plan availability is shrinking so much, your current plan may not be available next year. You may need to shop around for a new plan, so make sure you start shopping around early so you have plenty of time to compare your options.

Medicare Part D deductible maximum increase

If your Medicare Part D plan has a deductible, you'll be responsible for paying your gross covered prescription drug costs in full until the deductible is met. In 2027, the maximum deductible for Part D plans is $700, which is a $75 increase compared to the 2026 deductible of $615.

As a result, you may need to be prepared to pay higher out-of-pocket costs until you meet that deductible, so you may need to set some extra money aside. Once you meet your deductible, you'll continue to pay 25% coinsurance on generic and brand-name prescriptions.

Increased Medicare Part D out-of-pocket cap

The out-of-pocket cap for Medicare Part D plans is also increasing in 2027. In 2026, out-of-pocket costs were capped at $2,100, but in 2027, that amount increased by $300 to $2,400.

You'll pay for all of your prescription costs until you reach your deductible. After that, you'll pay a 25% coinsurance rate until you reach the $2,400 out-of-pocket maximum.

Expiration of the IRA-era premium subsidy

Medicare Part D premium subsidies, which lowered 2025 and 2026 premiums, are ending. In July, CMS announced that the subsidies would end at the end of 2026. Those subsidies helped keep premiums down, meaning premiums may increase in 2027.

Medicare insurers haven't yet released data about individual plans, so the exact increases and 2027 premiums aren't yet known.

15 more prescription drugs under Medicare-negotiated prices

The Medicare Drug Price Negotiation Program has negotiated lower prices on 15 more medications to help beneficiaries save money. These lower prices on the 15 medications are available starting in 2027.

The medications include drugs used to treat conditions like prostate cancer, breast cancer, asthma, irritable bowel syndrome, Type 2 diabetes, and bipolar I disorder. Popular drugs like Ozempic and Wegovy are also included. Keep in mind that the terms of your Medicare Part D policy may also impact how much you pay for your prescriptions.

Telehealth extension through 2027

During the COVID-19 pandemic, telehealth appointment availability was expanded to all Medicare beneficiaries, but the rule expanding that coverage wasn't permanent.

Congress has extended that telehealth coverage for 2027, so beneficiaries may access these services for at least one more year.

New Medicare Advantage flexibility

Federal regulations have granted Medicare Advantage plans more flexibility, so they're able to cover federally legal hemp items like hulled hemp seeds and hemp protein powder under Special Supplemental Benefits for the Chronically Ill guidelines. Traditional medical marijuana is still banned under all Medicare plans.

Expanded CBD pilot program

In 2027, some Medicare beneficiaries may be able to access non-inhalable CBD to help with chronic pain or sleep issues. This doctor-prescribed CBD is available through a Long-term Enhanced ACO Design Model.

Under the model, providers may consult with patients about hemp-derived products eligible for coverage and may integrate the products into a patient's care plan when appropriate.

Bottom line

There are a lot of changes to keep track of, and actual plan details, including premium increases, should be announced in late October or early November. Be sure to watch for your Annual Notice of Change letter this October; that's the single most important document to actually read, since it includes information to help you decide if you should keep your current plan or if it may be time for a switch. 

If you might need to switch plans, start researching alternatives early on during the Open Enrollment period so you have plenty of time to make your decision.

With such changes coming to Medicare, don't simply assume your current plan offers the same coverage or may be a good fit in 2027. Take the time to review the changes, shop for other plans, and make sure your coverage is right for you. Doing so may help you avoid expensive money mistakes and get the care you need next year.

You May Also Like

23 Ways To Get Money Without Getting A Second Job

By FinanceBuzz Editors

How To Save Money on Car Insurance: 12 Ways to Lower Rates

By Elyssa Kirkham

10 Things Seniors Born Between 1941-1969 Could Take Advantage Of

By FinanceBuzz Editors

19 Dumbest Things Smart People Waste Money On

By Team FBZ

7 Moves If You Want to Stop Living Paycheck to Paycheck

By FinanceBuzz Editors

7 Clever Ways to Crush Your Debt

By FinanceBuzz Editors

Save Money and Get Huge Discounts on Everyday Purchases

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal

Become a member now!

---

Subscribe Today

Learn how to make an extra $200

Get vetted side hustles and proven ways to earn extra cash sent to your inbox.

or

Subscribe Now →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms