Millions of older Americans could see lower monthly costs for private Medicare coverage in 2027, while stand-alone prescription drug plans are expected to post only a small premium increase, according to new figures released by the Centers for Medicare & Medicaid Services (CMS).
Medicare Advantage Premiums Expected To Fall In 2027
The average monthly premium for Medicare Advantage plans will decline to $12 in 2027, down from $14.37 in 2026, CMS said. These privately administered plans combine hospital, medical, and often prescription drug coverage through insurance companies.
According to USA Today, the changes come as millions of Medicare beneficiaries prepare to review their coverage options before the next enrollment period. CMS said about eight in 10 Medicare Advantage enrollees will be able to remain in their current plan with the same or a lower premium in 2027.
The agency also reported that 97% of Medicare beneficiaries will have access to at least 10 Medicare Advantage plan options. The number of available plans nationwide is expected to remain relatively stable, with 5,553 plans offered in 2026 and 5,532 planned for 2027.
Insurers must send Medicare enrollees information about changes to premiums, prescription drug coverage, and provider networks by Sept. 30. Beneficiaries who want to review alternatives can switch plans during Medicare open enrollment, which runs from Oct. 15 through Dec. 7 for coverage beginning Jan. 1, 2027.
© Shutterstock
Part D Prescription Drug Plans Face A Small Premium Increase
For beneficiaries enrolled in stand-alone Medicare Part D prescription drug plans, CMS projects an average monthly premium of $36 in 2027. That represents an increase of less than $1 compared with the 2026 average premium of $35.09.
CMS said the Part D market is showing signs of returning to more typical conditions after several recent policy changes affected pricing. In a news release, the agency said there are “encouraging signs that, as expected, the Part D program is returning to normal market conditions.”
As of February, about 25 million people were enrolled in stand-alone Part D plans, which are often paired with traditional government-run Medicare. Another 31 million people were enrolled in Medicare Advantage plans administered by private insurers.
Experts Warn Beneficiaries To Review Coverage Details
While premium changes are drawing attention, Medicare experts said beneficiaries should look beyond monthly costs when comparing plans. Changes to prescription drug lists, provider networks, and out-of-pocket expenses can affect the overall value of a plan.
John Brooks, director of Medicare at CMS, encouraged enrollees to review their options each year.
“Every year, it’s good to take stock and assess whether your plan is still meeting your needs or whether there’s a better option out there,” said John Brooks, director of Medicare at CMS. “The stability of the marketplace and the lower cost for most beneficiaries suggests that beneficiaries should have good options heading into this enrollment season.”
Juliette Cubanski, vice president and director of the program on Medicare policy at KFF, said insurers may keep premiums low while adjusting other parts of coverage.
“Insurers may be bending over backward to try and keep premiums as low as possible,” Cubanski said. “Other changes underneath the hood is the coverage they offer. If they need to decrease costs, that might come in the form of higher cost sharing for prescription drugs or reducing the number of prescription drugs they cover.”
Policy Changes Continue To Shape Medicare Drug Costs
The upcoming Part D pricing environment follows changes linked to the Inflation Reduction Act of 2022, which introduced new prescription drug cost protections for Medicare beneficiaries.
The law established a $2,000 annual cap on out-of-pocket prescription drug costs beginning in 2025. That limit increased to $2,100 in 2026.
The Biden administration previously created a prescription drug plan subsidy demonstration project designed to help stabilize premiums. The program directed additional federal funding to insurers and cost the government $9.8 billion in 2025 and 2026.
The CMS announcement follows the agency’s decision in July to end that demonstration project. Some drug policy analysts had warned that removing the subsidy could put upward pressure on Part D premiums in 2027.
CMS said the updated figures reflect a Medicare market adjusting after recent interventions, while beneficiaries will still need to examine plan details before choosing coverage for the new year.
