CHANGES COMING TO MEDICARE IN 2027

Michael T Braden September 8, 2026 MEDICARE NEWS

Photo of Braden Medicare Insurance's Changes Coming To Medicare In 2027 Poster

While the maximum out-of-pocket and deductible amounts for Part D are set, the full picture for 2027 isn't quite complete yet. Now, all eyes turn to the fall, when the Centers for Medicare & Medicaid Services (CMS) officially releases the upcoming figures for standard Part B premiums, along with the deductible amounts for Medicare Part A (Hospitalization) and Medicare Part B (Outpatient Services).  We will update these numbers as soon as they are available in October or early November.

A new Fidelity article projects that a 65-year-old retiring in 2026 can expect to spend an average of $185,500 on healthcare and medical expenses throughout retirement. This amount represents a 7% (13K) increase since the last estimate was published in 2025.

A few things seem constant in this world: inflation affects most people, there is still no cure for the common cold, and each year brings another list of changes that affect Medicare beneficiaries. This is why we wrote this article, simply to try to keep you informed of the annual changes to the Medicare Landscape.  This year, most changes will affect Medicare Advantage plans and prescription drug plans most. 

There are no signs of relief for those of you with a Medicare Supplement/Medigap plan.  Medigap premiums have gone through the roof over the past two years, and there are no signs the increase is over.  What is it that has been triggering these large, double-digit increases?  Insurance carriers will say healthcare costs are still increasing; this is true, and here in the US, everyone rushes to keep up with the most advanced diagnostic tools available, which costs money. 

I believe there are three main reasons for these increases.  First and foremost, 10,000 people a day are enrolled in Medicare!  As we near the end of the decade, these numbers are projected to stay around 10,000 new enrollees every day through 2029. And these Boomers are experienced and savvy; they understand the importance of healthcare, and they are taking advantage of everything as soon as they enroll in Medicare- some out of genuine need, others because they want to get their piece of the pie before the only thing left is crumbs. 

Other factors have affected traditional health care providers the most; if a company is losing money in other divisions, it will do whatever it can to make up for those losses.  And there have been a lot of losses with “Free” Healthcare being given out to just about everyone.  But when these people leave the hospital and throw away their bill, the company is left holding the bag.  No one seems to want to talk about this out loud, but certain states can give free healthcare to anyone; the states are not affected, but we all pay for their indiscretion through higher premiums.

The last thing affecting Medicare Supplement/Medigap rates is just greed.  Many companies are just taking advantage of their mismanagement and revenue shortfalls by continuing to increase Premiums wherever they can.  And until inflation gets under control, we will probably continue to see Medigap premiums increase.

THE 8 BIGGEST CHANGES COMING TO MEDICARE IN 2027

THERE WILL BE FEWER MEDICARE PART D PLANS AVAILABLE

The landscape for stand-alone prescription drug plans (PDPs) continues to shrink. Five years ago, Medicare beneficiaries could pick from an average of 30 stand-alone plans; by 2026, that selection dropped to just 11. That represents a 22% drop in available plans in one year alone.

Because options are consolidating rapidly, enrollees can no longer rely on their current plan to stay available or remain competitively priced heading into next year. Be prepared to shop around.

MEDICARE IS ENDING SUBSIDIES FOR PART D PREMIUMS

The temporary federal support that lowered Part D premiums in 2025 and 2026 is officially ending. The federal government's IRA premium stabilization demonstration, which had lowered monthly premiums by an estimated $16 per person in 2026, is ending, and those subsidies will no longer be available beginning January 1, 2027.

In July 2026, the Centers for Medicare and Medicaid Services (CMS)announced that the federal relief for some plan premiums will end at the end of the year. Then, the plan is to transition Medicare Part D back to standard market conditions, which many experts believe will lead to higher Medicare Part D premiums in 2028.

For now, we are all in the dark about what type of rate increases will result from the subsidy's discontinuation.  The Kaiser Family Foundation (KFF) has stated that without these extra subsidies in place for 2027, some Part D stand-alone drug plan enrollees could face a larger premium increase for drug coverage next year than in recent years. However, plan-specific premium amounts are not yet known.

THE MEDICARE PART D DEDUCTIBLE IS INCREASING IN 2027

Your Medicare Part D deductible depends on the plan you choose. Moreover, the deductible can vary, and you may not have to pay one at all. However, if you are subject to a Part D deductible, there is a maximum that no policy may exceed.

The Annual Medicare Part D Deductible is increasing from $625 to $675 in 2027. If your plan has a deductible, you pay 100% of your gross covered prescription drug costs (GCPDC) until you meet the deductible. For 2027, that maximum is $675, up from $615.

You will continue to pay all out-of-pocket costs for Tier 3-6 medications (Excluding Insulin, which will continue to be capped at $35 per month once you have met the deductible for your Part D plan. This continues until your total out-of-pocket spending on covered Part D drugs reaches the out-of-pocket maximum for 2027.

PART D INCREASES THE MAXIMUM OUT-OF-POCKET THRESHOLD FOR 2027

Beneficiaries pay 100% of prescription costs until they hit their deductible ($700 maximum), after which a flat 25% coinsurance rate applies until out-of-pocket spending reaches the statutory maximum for 2027.

In 2027, the cap on out-of-pocket prescription drug costs will be $2,400, compared to $2,100 in 2026, and $2,000 in 2025. That means every Medicare beneficiary is responsible for an additional $300 in drug costs in 2027.

HOW MEDICARE ADVANTAGE PLANS MAY OFFER LIMITED PRODUCTS AS SUPPLEMENTAL BENEFITS

Federal law still strictly bans traditional medical marijuana across all Medicare plans, but federal regulators have established updated rules that allow access to select non-intoxicating hemp and CBD products.

While high-THC marijuana remains prohibited, Medicare Advantage plans can use the newly released and updated guidelines about Special Supplemental Benefits for the Chronically Ill to cover basic, federally legal hemp items. Plans may offer FDA-approved GRAS products, such as hulled hemp seeds, hemp protein powder, and low-THC hemp seed oil.

PHYSICIAN-LED PILOT PROGRAM FOR CBD’S

Medicare is also expanding testing of doctor-prescribed CBD through CMS Innovation Center initiatives. Starting in 2027, under the new Long-Term Enhanced ACO Design (LEAD Model), will be able to supply non-inhalable CBD directly to patients to help manage chronic pain or sleep issues.

You will not be able to access this benefit at a regular doctor's office. This Substance Access Beneficiary Engagement Incentive (BEI) is a model-specific tool within Innovation Center models and is not available to all Medicare beneficiaries.

In April 2026, CMS announced that the ACO/REACH Models and the Enhanced Oncology Model (EOM) may furnish eligible hemp-derived products for up to $500 per year per eligible beneficiary, subject to model requirements and safeguards, as well as clinical determination. This was contingent on submitting and approving an implementation plan.

The ACO REACH models will end at the close of 2026 and will be replaced by the new Long-term Enhanced ACO Design (LEAD), which comes online in 2027.

MEDICARE TELEHEALTH COVERAGE APPROVED THROUGH 2027

Telehealth appointments took on new significance during the pandemic. Previously reserved for patients in rural areas, it was expanded to all Medicare beneficiaries.

However, Medicare's expanded telehealth benefits have since operated under a temporary safety net. Rather than making these broad virtual rules permanent, lawmakers have kept them alive through a patchwork of short-term legislative extensions to avoid a coverage cliff.

Photo of Braden Medicare Insurance's Medicare TeleHealth Changes For 2027 Poster

That cycle continues for the 2027 plan year. Under the Consolidated Appropriations Act of 2026, Congress extended core Medicare telehealth flexibilities through December 31, 2027. This extension gives beneficiaries and healthcare providers guaranteed stability for at least one year. This latest legislative extension ensures virtual care remains fully accessible and reimbursable through the end of 2027.

NEW LOWER PRESCRIPTION DRUG PRICING FOR 2027

Here are the newly released and approved costs for the second round of  Medicare Negotiated Drug prices.  Beginning January 1, 2027, the prices below will be in effect across all Medicare Part D plans. The terms of your Part D policy will influence the total amount you pay.

OZEMPIC. REBELSUS  & WEGOVY                $274.71                   Savings of $959

TRELEGY ELIPTA INHALER                             $175.73                   Savings of $654

XTANDI                                                              $7,004                     Savings of $13,480

POMALYST                                                        $8,650                     Savings of $21,744

OFEV                                                                  $6,350                     Savings of $12,662

IBRANCE                                                           $7,871                     Savings of $15,741

LINZESS                                                            $136                         Savings of $539.00

CALQUENCE                                                     $8,600                     Savings of $14,228

AUSTEDO & AUSTEDO XR                             $4,093                     Savings of $6,623

BREO ELIPTA INHALER                                   $67.00                     Savings of $397

XIFAXON                                                           $1,000                     Savings of $2,696

VRAYLAR                                                           $770                        Savings of $1,376

TRADJENTA                                                       $78                          Savings of $488

JANUMET &JANUMET XR                                $80                          Savings of $526

OTEZLA & OTEZLA XR                                     $1,650                     Savings of $4,722

WE SUGGEST EVERYONE START PLANNING EARLY TO GET THE BEST PLAN FOR 2027

The Medicare AEP (Annual Enrollment Period) begins on October 15 and runs through December 7. In late October or early November, CMS will officially announce updated Part B monthly premiums, along with Part A and Part B deductibles. Once those baseline numbers land, you'll have the complete roadmap you need to compare coverage options and pick the best plan(s) for the coming year.

If you have a Medicare Part D or Medicare Advantage Plan, your ANOC is crucial. The information in your ANOC packet will help you decide whether to keep your current coverage or find a new plan for the coming year. Don't keep your plan on autopilot without reviewing it first.

WRAPPING THINGS UP

We hope that you enjoyed reading this article regarding the changes in store for Medicare in the 2027 Plan Year.  We will always continue to post articles whenever there is relevant news about Medicare, and we look forward to sharing more about the 2027 IRMAA thresholds and the 2027 Medicare Part A Premiums and Deductibles, the Medicare Part B Premiums and Deductibles, as soon as they are officially released.

If you ever have any questions about coverage, we always encourage Medicare beneficiaries to reach out to their Medicare Broker.  If you do not have a broker, please reach out to us, and we will be glad to help you find a new Medicare Broker in your area.  You can call or text Michael at (480) 225-1393, email him at mike@bradenmedicare.com, or visit our website www.bradenmedicare.com and complete a Contact Us form.