1. The subsidy that quietly ended
For the last two years, stand-alone Medicare drug plans have been propped up by something most beneficiaries never heard of. CMS ran a Premium Stabilization Demonstration: it reduced the base premium for participating plans and capped how much any one plan could raise its premium from one year to the next. It started in 2025, it was expected to run at least three years, and CMS ended it after 2026 instead.1
That is the whole mechanism behind this year’s price news. With the subsidy withdrawn and the year-over-year cap gone, a plan facing higher costs has two options: absorb them, or pass them to the people enrolled. Some absorbed them. A number of very large ones did not. Nothing about your coverage changed to cause this, and nothing you did caused it — the scaffolding under the price came down.
This is a price story, not a benefits story
The Part D benefit itself is not being cut in 2027. The out-of-pocket cap continues and rises, the $35 insulin cap continues, and recommended adult vaccines remain free and exempt from the deductible. What has changed is the monthly price of some plans, which is a different problem with a different solution: comparison.
2. Two numbers: the average, and the one you will pay
CMS estimates that the average stand-alone drug plan premium will rise from about $35 to about $36 a month in 2027. You will see that figure repeated widely, and it is accurate. It is also close to useless for planning, because an average built from hundreds of plans moving in opposite directions describes none of them.2
KFF published an analysis of the underlying plan data on October 2. Read at the plan level rather than the national level, the same year looks completely different depending on which line you are on:
| If you are here | What 2027 looks like |
|---|---|
| In a plan that held its price | A small rise, or in some states a cut. For a good number of people this is a non-event, and the right answer is to confirm it and move on. |
| In a zero-premium plan in 2026 | You will pay a premium in 2027. No stand-alone drug plan is at $0 next year for anyone without Extra Help. |
| In AARP Medicare Rx Preferred | Up $50 or more a month in all fifty states and DC, more than $75 in thirty-seven states and more than $100 in four. |
| In AARP Medicare Rx Saver | Up $50 or more a month in thirty-three states. |
| Receiving Extra Help | Largely insulated. The subsidy that ended applied to premiums for people who do not receive the low-income subsidy. |
3. The $0 plan is gone, and that is the headline
Of everything in the 2027 data, this is the line that matters most and gets the least attention: for enrollees who do not receive Extra Help, there is no zero-premium stand-alone drug plan left anywhere in the country. In 2026 about four million people — roughly twenty-eight percent of that group — were in one. Every one of them pays something in 2027.2
For a household on a fixed income, that is not a rounding error, and it is also not something you will necessarily notice in time. Nobody sends a letter headed “your free plan is no longer free”. It appears in the Annual Notice of Change that landed in September, in a table, next to a number you may have skimmed because it had always been zero.
If your drug plan has always cost you nothing, this is the year to open the envelope
The Annual Notice of Change is the document that tells you what your plan will charge in January. It is the single most useful piece of post you receive all year, and the premium line is the first thing to look at this time. If you have already thrown it away, the figure is on Medicare’s Plan Finder and your plan can tell you over the phone.
4. Fewer plans to choose from — and Florida’s exception
The second structural change is that there is less to choose from. Nationally the number of stand-alone drug plans falls from 360 to 316, and the number of parent companies offering them falls from seventeen to fifteen. The average person’s menu drops from eleven plans to nine — the fourth year in a row that number has gone down.2
Florida is one of the few places that escapes this. It is one of only five states that does not lose a stand-alone drug plan for 2027, and it gains one. That does not make anyone’s premium cheaper, but it does mean the comparison is still worth doing here: the alternative that fits you better has not been withdrawn from the market the way it has in much of the country.
Before December 7
Bring your prescription list. We will price your plan against the others where you live.
5. What else changes in Part D for 2027
Three other numbers move in January, and they are set by the benefit design rather than by any individual plan. They apply whichever drug plan you end up in.3
| 2026 | 2027 | |
|---|---|---|
| Out-of-pocket cap | $2,100 | $2,400 |
| Maximum deductible | $615 | $700 |
| Base beneficiary premium | $38.99 | $41.33 |
| Insulin, per month | $35 | $35 |
The cap is the protection worth understanding properly. Once your own spending on covered drugs reaches the threshold, you pay nothing further for them until the calendar turns. The $35 monthly insulin cap continues, and recommended adult vaccines stay free and are not subject to the deductible.4
6. How to check your own plan in twenty minutes
This does not require expertise, and it does not take an afternoon. It takes your medication list and about twenty minutes. The order matters, because most people start with the premium and that is the one number that will mislead them.
- Write down every prescription you actually take. Exact name, dose, and how often. Include the ones you only take occasionally. This list is the whole exercise — everything else is arithmetic performed on it.
- Find your 2027 premium. It is in the Annual Notice of Change your plan sent in September, or on Medicare’s Plan Finder at medicare.gov, or from your plan by phone.
- Enter your drugs and your pharmacy into the Plan Finder. It will show you an estimated total annual cost for each plan available where you live — premium, deductible and your actual drugs together. That total is the number to compare.
- Check that your pharmacy is a preferred one. The same plan can charge two different prices for the same drug depending on where you fill it, and a preferred pharmacy a mile further away can be worth the drive.
- Look at whether anything needs prior authorization or step therapy. A drug can be on the formulary and still be difficult to get. If one of yours carries a restriction, that is worth knowing in December rather than at the counter in January.
- Compare the annual total, not the premium. A plan with a higher premium and a lower deductible can easily cost less across the year if it covers your drugs on a better tier.
If the total for your current plan is close to the best alternative, stay where you are. Switching has a cost in effort and disruption, and a few dollars rarely justifies it. If the gap is a few hundred dollars a year, that is a different conversation.
7. If the new number is more than you can manage
If the new premium genuinely does not fit the budget, there are three things worth checking before you accept it. None of them is a trick, and all three are underused.
- Extra Help. A federal program that can pay most or all of a drug plan premium and deductible. The income and asset limits are more generous than people expect, and a great many people who would qualify have simply never applied because they assumed they earned too much.
- A Medicare Advantage plan that includes drug coverage. For some people the arithmetic works out differently when the drug coverage is bundled rather than bought separately. It is a bigger decision than switching drug plans, because it changes how your medical care is managed too, but it belongs in the comparison.
- The Medicare Prescription Payment Plan. This does not reduce what you owe — it spreads it across the remaining months of the year instead of letting it land in one or two. It helps most if your heavy costs arrive early in the year.
That last one is worth a caveat. You can join at any point in the calendar year, but joining later leaves fewer months to spread the same balance, so each payment is larger. If you participate and stay with the same plan, your participation renews automatically into 2027 unless you opt out; if you change plans, you have to opt in again.5
8. A South Florida lens
Two things make this land differently here than it does in most of the country. The first is that Florida did not lose drug plan choices this year, so the comparison still has somewhere to go. In states that lost three or four options, people are being moved around a shrinking menu. Here, the plan that fits your prescriptions better is probably still on the shelf.
The second is language. A formulary is hard to read in your first language and considerably harder in your second, and the tier a drug sits on is exactly the sort of detail that gets lost in a hurried translation at a pharmacy counter. Our office works in English, French, Haitian Creole and Spanish, and a plan comparison done properly in the language somebody actually thinks in is a different exercise from one done at speed in a language they merely get by in.
9. Frequently asked questions
Is my Medicare drug plan premium going up in 2027?
It depends entirely on which plan you are in. CMS estimates the average stand-alone drug plan premium rises from about $35 to $36 a month, but that average covers very different outcomes. Some plans fall, some rise a few dollars, and some of the largest plans in the country rise by $50 or more a month. The average tells you almost nothing about your own bill, which is why the only reliable answer comes from looking up your specific plan.
Why did the $0 drug plan disappear?
For 2025 and 2026, a temporary CMS program called the Premium Stabilization Demonstration reduced the base premium for participating stand-alone drug plans and capped how much they could rise year over year. CMS ended it after 2026 rather than running it a third year. Without that subsidy and those caps, plans either absorb the cost or pass it on. The result is that for 2027 there is no zero-premium stand-alone drug plan left for anyone who does not receive Extra Help.
I paid nothing for my drug plan this year. What happens in January?
You will pay something. About four million people without Extra Help — roughly 28 percent of stand-alone drug plan enrollees — had a zero-premium plan in 2026, and every one of them faces a premium in 2027 whether they stay put or move. The question is no longer whether you pay, but how much, and switching plans may change the answer considerably.
Which plans are rising the most?
According to KFF’s analysis of the 2027 plan data, AARP Medicare Rx Preferred rises by $50 or more a month in all fifty states and the District of Columbia, by more than $75 in thirty-seven states and by more than $100 in four. AARP Medicare Rx Saver rises $50 or more in thirty-three states. Those two plans together hold more than two million enrollees who do not receive Extra Help, so a lot of people are affected by those two lines alone.
Does a bigger premium mean better coverage?
No. Premium and coverage are separate questions. A plan can raise its premium and still cover your drugs poorly, and a cheaper plan can cover them well. What decides your real annual cost is whether your specific prescriptions are on the plan’s formulary, what tier they sit on, and whether your pharmacy is a preferred one. That is why we price a plan against your actual medication list rather than against its premium.
Do I have fewer plans to choose from this year?
Yes. The number of stand-alone drug plans nationally falls from 360 to 316, and the number of companies offering them falls from seventeen to fifteen. The average person’s choice drops from eleven plans to nine, the fourth annual decline in a row. Florida is an exception worth knowing about: it is one of only five states that does not lose a plan, and it actually gains one.
What is the out-of-pocket cap in 2027?
Once you have spent $2,400 out of pocket on covered drugs in 2027, you pay nothing more for them for the rest of the calendar year. That cap rises from $2,100 in 2026. It is a permanent protection created by the Inflation Reduction Act and it is indexed each year, so it moves upward but it does not disappear.
What is the Part D deductible for 2027?
The maximum standard deductible rises from $615 to $700. That is a ceiling, not a fixed amount: a plan may set a lower deductible, or none at all, and many do. Two plans with the same premium can have very different deductibles, which is one more reason the premium alone is a poor way to compare.
Can I do anything if the new premium is more than I can manage?
Possibly. Extra Help is a federal program that can cover most or all of a drug plan premium and deductible, and the income limits are more generous than most people assume — a great many people who qualify have never applied. Separately, a Medicare Advantage plan with drug coverage included may work out differently from Original Medicare plus a stand-alone drug plan. Both are worth checking before you accept a number you cannot afford.
When do I have to decide?
Annual Enrollment runs from October 15 to December 7, 2026, and whatever you choose in that window starts on January 1, 2027. If you do nothing, you stay in your current plan at its new price. There is no penalty for looking, and no obligation to switch if your plan still fits.
10. Sources
- U.S. Government Accountability Office, Medicare Part D: Implementation of Beneficiary Premium Stabilization (GAO-26-107935) — the demonstration began in 2025 and was planned to run at least three years; CMS ended it after contract year 2026.
- KFF, Many Medicare Part D Stand-Alone Drug Plan Enrollees Will See Modest Premium Increases for 2027, But Others Could Pay Much More If They Don’t Switch Plans, October 2, 2026 — source for the disappearance of zero-premium plans, the four million figure, the named plan increases, and the fall from 360 plans to 316.
- Centers for Medicare & Medicaid Services, Announcement of Calendar Year 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies, April 6, 2026, and the Part C and D bid information released July 28, 2026 — the 2027 deductible, out-of-pocket threshold and base beneficiary premium.
- Medicare.gov — the $35 monthly insulin cap and $0 recommended adult vaccines continue in 2027 and are not subject to the deductible.
- Medicare.gov, What’s the Medicare Prescription Payment Plan? — you may join at any point in the calendar year, and participation renews automatically with the same plan unless you opt out.
Please note: This article is general information about how Medicare Part D works in 2027, not advice about any particular plan. Premiums, deductibles and formularies differ by plan and by county, and the figures above are national ones published by CMS and KFF. Confirm anything that affects a decision against your own plan documents or at medicare.gov before you act on it.