Why your Part D premium may jump in 2027

The short version: a temporary federal subsidy lowered standalone drug plan premiums and capped their increases in 2025 and 2026. It ends after 2026, so 2027 is the first year plans set prices without it. The 2027 base beneficiary premium is $41.33, up 6% from $38.99, but that cap protects the base amount only; your plan's own premium isn't capped. Your plan mails an Annual Notice of Change by September 30 with your real 2027 numbers. Read it, then compare plans during the Annual Enrollment Period, October 15 to December 7.

In 2025, Medicare's redesign of the Part D benefit took effect: the old coverage gap ended and a hard annual cap on out-of-pocket drug costs began. Those changes shifted more cost onto insurance plans, and plans priced accordingly. To keep standalone drug plan premiums from spiking while insurers adjusted, CMS ran a voluntary program called the Premium Stabilization Demonstration.

The demonstration did two things for participating standalone plans. It reduced the premium directly ($15 per member per month in 2025, $10 in 2026), and it capped how much any participating plan's premium could rise year over year ($35 in 2025, $50 in 2026). KFF estimates the program cost about $9.8 billion across those two years and lowered average monthly premiums by roughly $26 in 2025 and $16 in 2026. On July 28, 2026, CMS announced it ends after this year: insurers now have enough experience under the redesigned benefit to price plans on their own.

In short: the guardrails that softened drug plan premium increases in 2025 and 2026 are gone for 2027.

Two numbers came out of CMS on July 28, and they tell different stories. The national base beneficiary premium for 2027 is $41.33, up from $38.99 in 2026. That looks like a modest 6% increase, but only because federal law caps growth in this specific number at 6% per year through 2029. The base premium is mostly a reference figure: it's what the late enrollment penalty is calculated from, not what any particular plan charges you.

The second number is the one insurers watch: the national average bid, which reflects what plans actually expect drug coverage to cost. For 2027 it's $296.05 per member per month, up about 24% from $239.27 in 2026. When underlying costs rise that fast and the subsidy cushioning members from it disappears at the same time, some standalone plans will pass more of the difference into premiums, deductibles, and narrower drug lists.

For context, KFF puts the average standalone drug plan premium at about $36 a month in 2026, with roughly 24.9 million people enrolled in these plans. Nobody can say yet what any specific plan will charge in 2027; that information arrives in September.

In short: the 6% increase in the base premium hides a 24% jump in what plans expect coverage to cost, and your plan's premium isn't capped.

The auto-renew trap. Most people never touch their drug plan during enrollment season, and their plan simply rolls over. In a normal year that's usually harmless. This year, a plan that was held down by a subsidy and an increase cap can reprice without either. The only way to know what your plan will cost is the Annual Notice of Change it must send you by September 30.

Premium isn't the whole price. A plan can hold its premium steady and still cost you more through a higher deductible, a drug moved to a pricier tier, or a pharmacy leaving its preferred network. Check your specific medications against the 2027 drug list, not just the monthly premium.

The penalty grows too. The late enrollment penalty is 1% of the base beneficiary premium for each full month you went without drug coverage or other creditable coverage. Because the base premium rises to $41.33, existing penalties rise with it. Someone who went 24 months without coverage would pay about $9.90 a month on top of their premium in 2027 (24% of $41.33, rounded to the nearest ten cents). Dropping drug coverage entirely to dodge a premium increase creates exactly this problem later.

Medicare Advantage is shifting at the same time. This isn't only a standalone drug plan story. Humana announced in July that it will exit Medicare Advantage plans covering roughly 600,000 members in 2027, its second straight year of pullbacks. If your plan is discontinued, you'll get a nonrenewal notice this fall, and you'll have the right to choose new coverage. Don't assume a replacement happens automatically.

In short: the risk this year isn't one big premium number. It's auto-renewing into a plan that changed underneath you.

1. Watch your mail in late September. The Annual Notice of Change shows your 2027 premium, deductible, and drug list side by side with 2026. Ten minutes with this letter is the highest-value Medicare task of your year.
2. List your medications and doses. Plan comparisons only mean something when they're priced against the drugs you actually take.
3. Compare during the Annual Enrollment Period, October 15 to December 7. CMS publishes the full 2027 plan landscape in mid-to-late September, and Medicare's Plan Finder at Medicare.gov reflects it ahead of enrollment. Compare total annual cost: premium plus deductible plus copays for your drugs at your pharmacy.
4. Check whether you qualify for Extra Help. This federal program lowers drug plan premiums and out-of-pocket costs for people with limited income and resources. The limits are indexed each year, so check the current figures at SSA.gov or with your State Health Insurance Assistance Program (SHIP) even if you didn't qualify before.
5. If your plan is leaving your area, act. A discontinued standalone drug plan doesn't automatically become a new one. If you do nothing, you can land in January with no drug coverage and a penalty clock running.

In short: read the letter, price your drugs, and decide on purpose. If you want help comparing, speak with a licensed insurance agent about your plan options. There is no cost to you.