Medicare Stand-Alone Drug Plan Premiums Projected to Rise Significantly in 2027

Millions of Americans enrolled in Medicare stand-alone prescription drug plans will face higher costs next year, according to a recent analysis published by KFF. The research indicates that average monthly premiums for these specific stand-alone plans are projected to climb by 50% in 2027. While costs are climbing, policy experts emphasize that proactive shopping during the open enrollment period can help beneficiaries mitigate these increases.

Understanding the 2027 Premium Projections

The KFF analysis reveals that the average monthly premium for stand-alone Medicare prescription drug plans is expected to rise from $34 to $51. However, researchers point out that enrollees have the opportunity to avoid this specific average increase by actively comparing options and switching to lower-cost plans before the open enrollment period concludes on December 7. Analysts note that approximately 10.4 million beneficiaries—representing about 76% of stand-alone drug plan enrollees who do not receive low-income subsidies—will experience higher monthly costs if they remain in their current plans for 2027. This group includes roughly 4.1 million enrollees currently in zero-premium plans who will automatically see cost increases because zero-premium options will no longer be available.

Broader Out-of-Pocket Cost Increases

Beyond monthly premiums, enrollees are facing other financial shifts in their coverage structure. According to the KFF findings:

• Annual deductibles for stand-alone prescription drug plans will average $643 in 2027, up from $540 in 2026.
• Beneficiaries with Medicare Advantage health plans that include drug coverage will see average deductibles rise to $489, compared with $360 the previous year.
• Many enrollees will face coinsurance requirements rather than fixed copayments, which can lead to less predictable out-of-pocket expenses because payments are calculated as a percentage of the drug’s cost.

In contrast, beneficiaries receiving drug coverage through private Medicare Advantage plans will see much smaller adjustments, with overall monthly premiums for drug benefits expected to increase by an average of less than $2 per month.

Potential Factors Behind the Shift

Researchers suggest that one contributing factor to the projected premium hikes for stand-alone plans is a decision by the Centers for Medicare & Medicaid Services. In July, CMS ended early a three-year pilot program that provided subsidies to stand-alone plans in 2025 and 2026 to help keep premiums down. KFF noted that ending this subsidy program prematurely likely influenced the rising cost projections for 2027. Meanwhile, CMS officials previously projected a much smaller national average premium increase of $1, moving from $35 to $36, based on September enrollment data. KFF noted that CMS did not detail its calculation methods, and that the federal agency may have assumed widespread consumer switching to lower-cost alternatives.

Political Context and Consumer Action

Rising medical and pharmaceutical expenses have emerged as a prominent issue for voters. While political figures, including President Donald Trump, have maintained that administration policies have successfully negotiated lower medicine prices from manufacturers, policy analysts stress that individual consumer costs vary widely depending on specific prescriptions and chosen insurance structures. Experts urge older adults and beneficiaries to carefully review their coverage notices, utilize online comparison tools, and explore alternative plans to find the most cost-effective options for the upcoming year.