Why Part D Premiums Are Expected to Rise in 2027

If you have a stand-alone Medicare Part D drug plan, your premium for 2027 may be higher than what you have grown used to over the past couple of years. A federal program that helped keep those premiums stable is ending after plan year 2026, and insurers are expected to reset some premiums upward as a result. The place to see the actual number for your plan is the premium section of the Annual Notice of Change letter you receive this fall.

What has been holding Part D premiums down

For the past several plan years, the Centers for Medicare & Medicaid Services has run a demonstration program aimed at limiting how much stand-alone Part D premiums could increase from one year to the next. The program worked behind the scenes, capping the year-over-year growth insurers could pass on to members through their monthly premium. Most people with a stand-alone drug plan never had a reason to know the program existed. They simply noticed that premiums moved less than they might have otherwise.

That program is scheduled to end after the 2026 plan year. Without it, the underlying cost pressures that insurers have been managing — rising drug prices, changes to the drug benefit structure, and normal year-to-year cost trends — are no longer being smoothed by the same mechanism. CMS has indicated that this is expected to affect stand-alone Part D premiums for 2027, though the size of any individual increase will vary by plan, insurer, and county. See Medicare.gov for the current overview of how Part D premiums are set each year.

Why this doesn't affect everyone the same way

It matters here whether you get your drug coverage through a stand-alone Part D plan or through a Medicare Advantage plan that bundles drug coverage in with your medical benefits.

Stand-alone Part D plans. If you are enrolled in Original Medicare and pay a separate premium for a drug plan, this is the change that applies most directly to you. Your plan's premium for 2027 is set independently and is the figure most likely to reflect the end of the stabilization program.

Medicare Advantage plans with drug coverage. If your drug coverage comes bundled into a Medicare Advantage plan, your plan's overall premium and cost-sharing are set by the plan as a package. The same underlying cost pressures exist, but they show up differently — through changes to copays, deductibles, or the plan's overall bid — rather than through a stand-alone drug premium line.

Either way, the number that matters to you is specific to your plan. Averages and national estimates don't tell you what your plan is actually going to charge. Only your plan's own materials do.

What to actually do about it

There is no way to prevent a premium change your plan has already set, but there is a window to respond to it. Here is a practical sequence:

Open your ANOC letter when it arrives. Look specifically at the premium line and compare it to what you're currently paying. Also check the drug list, since a formulary tier change can affect your out-of-pocket costs even if the headline premium looks manageable.

Compare against other Part D plans in your county. Every county has multiple stand-alone Part D plans available, and premiums vary between them. A plan that becomes more expensive relative to your current spending isn't necessarily more expensive than every alternative. Plans differ in premium, deductible, and which drugs they cover on which tier, so the plan that fits your specific medications may not be the one advertised as having the lowest premium.

Do this during the Annual Enrollment Period. AEP runs October 15 through December 7 each year, and it is the primary window for changing Part D plans for a January 1 effective date. Outside that window, changing plans generally requires a Special Enrollment Period, which not everyone qualifies for.

Don't wait until December 7 to start. Comparing plans takes time, particularly if you take several medications and want to check each one against a new plan's formulary. Starting the review in October, as soon as your ANOC arrives, gives you room to actually compare rather than rushing a decision in the final days of the enrollment window.

Questions worth asking when you call your plan

If you decide to call your plan or a licensed agent to talk through your ANOC, a few specific questions tend to get more useful answers than a general "did my premium go up":

Ask whether the premium change applies to the plan as a whole or was calculated based on anything specific to you. Part D premiums are generally set at the plan level, not individualized based on your claims history, but it's worth confirming rather than assuming.

Ask how the plan's deductible changed alongside the premium. A plan can hold its premium steady while raising its deductible, or the reverse, and the combination is what determines your actual cost through the year, not the premium figure in isolation.

Ask whether any of your specific medications moved to a different tier. This is a separate question from the premium change, but the two often arrive in the same ANOC letter, and a tier move can matter more to your total spending than the premium line does.

Ask what the plan's total estimated annual cost looks like for someone taking your specific medications. Some plans and agents can walk through an estimate based on your drug list, which tells you more than comparing premiums alone.

None of these questions require you to have already decided to switch. They're useful even if you end up staying with your current plan — they just make sure that decision is based on the full picture rather than the premium line by itself.

How this fits into the broader Part D benefit

It helps to keep this premium-stabilization change separate in your mind from other, unrelated features of the Part D benefit. The annual out-of-pocket cap that limits total drug spending in a plan year, for instance, is a structural feature of the Part D benefit itself, set through separate federal law, and is not the same thing as the premium-stabilization demonstration that is ending. One affects your monthly premium; the other affects what happens once your out-of-pocket drug spending reaches a certain point in the year. A plan's premium can change from year to year while the structure of the annual cap stays governed by its own separate rules. Don't let a headline about one change convince you that everything about your drug coverage moved at once — read your ANOC's specific sections rather than extrapolating from a general news story about the industry as a whole.

What we are not telling you

We are not going to tell you a specific dollar figure for how much premiums will rise, because that figure does not exist as a single number — it varies by plan, insurer, and county, and CMS has not published a single national estimate that would apply to your plan specifically. Anyone quoting you a precise nationwide premium increase before your plan's own ANOC is published is guessing. The only number that matters is the one printed in your own plan's notice.

It's also worth being clear about what didn't change: the structure of the Part D benefit itself, including the annual out-of-pocket cap, is a separate matter from this specific premium-stabilization program ending. Don't assume every part of your drug coverage is shifting just because the premium line might move. Check Medicare.gov's Part D costs page for the parts of the benefit that are set at the federal level versus the parts that are plan-specific.

The bottom line

A federal program that had been limiting Part D premium growth is ending after 2026, and stand-alone Part D premiums are expected to reset upward for some plans as a result. The size of any change is specific to your plan, not a number that applies uniformly. Your ANOC letter, arriving by the end of September, will tell you your plan's actual 2027 premium. From there, the Annual Enrollment Period gives you until December 7 to compare that number against other Part D plans serving your county and switch if a different plan fits your medications and budget better.

For more on how Medicare drug coverage premiums and costs work, see CMS's Part D program overview and Medicare.gov's guide to Medicare drug coverage.