Why your 2027 Part D premium is going up, and the three things to check before December 7
A temporary federal subsidy that held standalone drug plan premiums down ended after 2026. If you are in a standalone Part D plan, your January premium is likely higher, and the window to change it closes December 7.
The short answer
Your 2027 Part D premium is likely higher because CMS ended the Part D Premium Stabilization Demonstration after 2026. That program had reduced the average standalone drug plan premium by roughly $16 a month. It applied only to standalone Part D plans, not to drug coverage inside a Medicare Advantage plan. Your plan's exact 2027 premium is printed in your Annual Notice of Change.
- Subsidy ended: The Part D Premium Stabilization Demonstration ran through 2026 and was not renewed for 2027.
- Base premium: The 2027 national base beneficiary premium is $41.33, up from $38.99 in 2026, a 6 percent increase.
- Who is affected: Roughly 25 million people in standalone Part D plans. Medicare Advantage drug coverage was not part of the demonstration.
- Deadline: You can change plans from October 15 to December 7, 2026 for coverage starting January 1, 2027.
Applies to anyone enrolled in a standalone Medicare Part D prescription drug plan alongside Original Medicare. If your drug coverage comes through a Medicare Advantage plan, the demonstration did not apply to you, though your plan can still change its premium and formulary for 2027.
Why did my Part D premium go up for 2027?
A temporary federal subsidy ended. CMS ran the Part D Premium Stabilization Demonstration in 2025 and 2026 to soften the transition after the Inflation Reduction Act redesigned the Part D benefit. The demonstration lowered the base beneficiary premium and capped how much a standalone plan could raise its premium year over year.
On July 28, 2026, CMS announced the demonstration would end after the 2026 plan year. The agency said plan sponsors now have enough experience under the redesigned benefit to price their own plans without the support.
The effect is straightforward. In 2026 that subsidy reduced the average standalone drug plan premium by roughly $16 a month. For 2027 it is gone, and plans are pricing without it.
How much more will I actually pay?
It depends on your plan, and nobody could tell you in July. CMS published plan-specific premiums in September, and your own number is printed in the Annual Notice of Change your plan mailed by September 30.
What CMS did publish sets the floor. The 2027 national base beneficiary premium is $41.33, up from $38.99 in 2026. That is a 6 percent increase, which is the maximum annual growth the Inflation Reduction Act allows through 2029. The national average monthly bid amount, a separate figure used to calculate the federal subsidy paid to plans, rose to $296.05 from $239.27, an increase of about 24 percent.
| Figure | 2026 | 2027 |
|---|---|---|
| National base beneficiary premium | $38.99 | $41.33 |
| National average monthly bid amount | $239.27 | $296.05 |
| Part D deductible (standard) | $615 | $700 |
| Out-of-pocket cap on covered drugs | $2,100 | $2,400 |
| Premium Stabilization Demonstration | In effect | Ended |
The base beneficiary premium is a starting point for a calculation, not a price. Your actual premium reflects your plan’s bid, your region, any supplemental coverage the plan adds, Extra Help if you receive it, and an income-related adjustment if your income is above the threshold.
Does this change affect Medicare Advantage drug coverage?
The demonstration did not apply to Medicare Advantage plans with prescription drug coverage. It was built for standalone Part D plans sold alongside Original Medicare, and roughly 25 million people are enrolled in those.
That does not mean Medicare Advantage enrollees can skip the review. Those plans set their own premiums, change their formularies, and adjust cost sharing every year. Some carriers are also reducing their footprint for 2027 and leaving certain counties entirely.
If your plan is leaving your area, that is not only a problem. A plan termination can trigger a guaranteed-issue right to buy a Medigap policy without medical underwriting, which is a door that is otherwise closed to most people after their initial enrollment window. Guaranteed-issue rights vary by state.
What should I actually do before December 7?
Compare on total annual cost, not on the monthly premium. A plan with a $0 premium and a $700 deductible can cost you more over twelve months than a plan with a $40 premium and richer coverage of the specific drugs you take.
Three checks before the deadline
- Find your Annual Notice of Change and read the cost comparison table. It shows your 2026 and 2027 premium, deductible, and cost sharing side by side.
- Enter your actual medications, doses, and preferred pharmacy into the plan finder at Medicare.gov. Coverage of any given drug depends on that plan’s formulary, tier, and utilization management rules.
- Compare the estimated yearly total for your current plan against the two or three cheapest alternatives that still cover your drugs at a pharmacy you can reach.
If a drug you take moved to a higher tier or came off the formulary, that matters more than the premium. Formulary changes are the most common reason a plan that worked in 2026 becomes expensive in 2027.
What if the cheapest plan does not cover my drugs?
Then it is not the cheapest plan. This is the most common mistake we see in December, and it is expensive in a way that does not show up until February.
A plan can list a drug on its formulary and still require prior authorization, step therapy, or a quantity limit before it will pay. Check the tier and the restrictions, not just whether the drug appears.
If you are staying with the same plan and are enrolled in the Medicare Prescription Payment Plan, which spreads your out-of-pocket drug costs across monthly payments with no interest, you are re-enrolled automatically. If you switch plans, you have to elect it again with the new plan.
If the base premium is $41.33, how are some plans $0?
Because $41.33 is not a price. It is one input in the formula Medicare uses to split the cost of drug coverage between you and the government.
The base beneficiary premium represents roughly 25.5 percent of the expected cost of standard Part D coverage nationally. Medicare pays the rest directly to the plan. Your own premium then depends on how your plan’s bid compares to the national average bid, which is $296.05 for 2027. Bid above that average and you pay the difference on top. Bid below it and your premium falls dollar for dollar, in some cases to zero.
There are two other routes to a $0 premium. If you qualify for Extra Help, the low-income subsidy covers your premium up to the regional benchmark. And drug coverage bundled inside a Medicare Advantage plan often shows $0 because the plan applies its rebate dollars to the drug premium, though the Part B premium still applies.
What this means in practice: a plan reaches a $0 premium by bidding low, and plans bid low by controlling costs somewhere. That usually shows up as a tighter formulary, higher tiers, a narrower pharmacy network, or more prior authorization. None of that is hidden, but none of it appears on the premium line either.
Where does the out-of-pocket cap fit into this?
The cap is unchanged in structure and rises to $2,400 for 2027, from $2,100 in 2026. Once your spending on covered Part D drugs reaches that amount in a calendar year, you pay nothing more for covered drugs through December 31.
The count resets every January 1. It covers drugs your plan covers. It does not count your monthly premium, drugs bought outside your plan, or medications billed under Part B, such as most infusions given in a doctor’s office.
That distinction matters when you compare plans. Two people with the same premium can reach the cap in different months depending on which plan covers which drugs.
Why is the deductible rising too?
The standard Part D deductible moves by the same formula as the cap, and both rose faster than usual for 2027. The standard deductible is $700, up from $615 in 2026.
Two things soften that. The $700 figure is a ceiling, not a requirement: plans can set a lower deductible or none at all. And most plans exempt generic tiers from the deductible entirely, so you feel it on brand-name drugs rather than on everything.
Whether your plan applies the full deductible for 2027, and to which tiers, is printed in your Annual Notice of Change. Read that table before you decide the premium is the problem.
Questions people ask
Does this affect my Medicare Advantage plan?
Not directly. The demonstration applied to standalone Part D plans only. Medicare Advantage plans with drug coverage set their own premiums and can still change them for 2027, so read your Annual Notice of Change either way.
Is the $2,400 out-of-pocket cap going away too?
No. The annual cap on what you pay out of pocket for covered Part D drugs stays in place for 2027 and rises to $2,400 from $2,100 in 2026. The cap and the demonstration are separate provisions.
Will everyone's premium go up by the same amount?
No. Your premium depends on your plan's bid, your region, your income, and whether you receive Extra Help. People receiving Extra Help are protected from premium increases up to the regional benchmark.
What if I do nothing?
Your current plan renews automatically at its 2027 premium and 2027 formulary. If either changed in a way that costs you money, you absorb it for the full year unless you qualify for a special enrollment period.
If the base premium is $41.33, how can some plans cost $0?
The $41.33 figure is an input to a subsidy formula, not a floor. Medicare pays about 74.5 percent of standard Part D cost directly to plans. A plan that bids below the national average has its beneficiary premium reduced dollar for dollar, sometimes to zero.
Should I switch to a cheaper plan?
Only after checking your own drug list. A lower premium can come with a higher deductible, different tiers, or a pharmacy network that excludes yours. Compare total annual cost, not the monthly premium.
Sources
- CMS, Medicare Part D 2027 National Average Monthly Bid Amount Information, July 28, 2026
- CMS, July 28 2026 Parts C and D Announcement, July 28, 2026
- Center for Medicare Advocacy, Administration Ends Part D Premium Stabilization Demonstration, August 6, 2026
- Medicare.gov, Find health and drug plans, accessed September 17, 2026
Want us to check your 2027 premium against your actual drug list?
Send your medication list and the pharmacy you use. A licensed advisor will compare your current plan against every option in your ZIP code and reply within one business day. Free, no obligation.
Check my 2027 planCall or text (773) 657-9140Smart Insurance Agents LLC is an independent, licensed insurance agency and is not connected with or endorsed by the U.S. government or the federal Medicare program. We do not offer every plan available in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program for information on all of your options. Content is for general information and is not a guarantee of coverage or rates; figures are subject to change by CMS and carriers.