Dive Brief:
- Millions of seniors in standalone Medicare prescription drug plans could see their premiums skyrocket next year if they don’t switch to a cheaper option.
- Average monthly premiums for Part D plans are set to jump 50%, from $34 to $51 in 2027 — assuming seniors stay on their current plans, according to a new analysis from the KFF.
- But premiums for plans on offer vary widely, ranging from $6 to $204 among national Part D carriers, the KFF found. Researchers with the health policy think tank stressed the importance of plan shopping during Medicare open enrollment, which runs until Dec. 7.
Dive Insight:
The sharp increase in the cost of Part D coverage is the latest sign of how runaway healthcare costs are eating into the pocketbooks of ordinary Americans. Policy may have also played a role, after the Trump administration ended a program that limited premium increases early.
Roughly 25 million seniors get prescription drug coverage through standalone Medicare Part D plans. Three-fourths of Part D enrollees who don’t qualify for financial help — 10.4 million seniors — will pay a higher premium next year if they don’t change their plan, the KFF found.
That includes more than 4 million seniors who are currently enrolled in prescription drug plans with zero monthly premiums, because there are no zero-premium prescription drug plans available in 2027, according to the KFF.
The cheapest standalone Part D plan on offer is Centene’s Wellcare Value Script Rx, with an average premium of $6.50. The most expensive is United’s AARP Medicare Rx Preferred, with an average monthly premium of $204.50.
That wide variance in costs makes it extra important that seniors take a look at their options and consider changing coverage, instead of allowing their existing plan to roll over next year, the KFF said.
“With some plans increasing premiums substantially, the stakes are higher this year for people with Medicare stand-alone drug coverage if they sit on the sidelines during open enrollment,” Juliette Cubanski, the director of the KFF’s Program on Medicare Policy, said in a statement.
The KFF’s forecast — that enrollment-weighted premiums will increase by $17 a month on average next year — is significantly more drastic than the Trump administration’s. The CMS said it thinks average monthly Part D premiums will rise less than $1 when the agency released data on Medicare plans for 2027 in September.
Regulators didn’t explain the methodology behind that calculation. But they could have accounted for plan switching, KFF researchers said.
Changes during open enrollment normally drive down average weighted premiums, as new enrollees join and existing enrollees move to cheaper plans. Last year, the KFF projected that the average premium for standalone Part D plans would be $44, but it actually came in at $34.
Along with premium changes, seniors also need to consider other aspects of a plan that can affect how much they pay for prescription drugs throughout the year.
Most Part D enrollees will have a deductible of several hundred dollars next year, including virtually all people in standalone prescription drug plans and 85% of Medicare Advantage enrollees with drug coverage, the KFF found. The standard Part D deductible is increasing from $615 to $700.
Meanwhile, most Part D enrollees will face coinsurance instead of copays for their plans, meaning they’ll have to pay a percentage of the total cost of a drug instead of a fixed dollar amount. That means less predictable out-of-pocket costs, and potentially higher payments for brand-name and other expensive drugs, the KFF said.
Skyrocketing premiums for standalone Part D plans could drive more seniors into Medicare Advantage, the privatized Medicare alternative. Most MA plans bundle prescription drug coverage with hospital and outpatient benefits, and come with much lower premiums — five times lower, in fact, according to the KFF. MA premiums for drug coverage are projected to average just $9 a month next year.
However, MA plans come with potential downsides, including more limited provider networks and broad use of prior authorization, which can lead to delayed or denied care.
Benefits experts always recommend seniors take a look at their options, instead of allowing their current coverage to renew on Jan. 1. But they’ve been particularly insistent in open enrollment for 2026 and 2027, as cost hikes, benefit changes and plan exits throw the Medicare market into turmoil.
More than 4 million Medicare beneficiaries have had their plan terminated and will need to find new coverage in 2027, including more than 1 million people losing their standalone Part D plan.
