STAND-ALONE MEDICARE PART D PREMIUM INCREASES

Michael T. Braden September 19, 2027 MEDICARE NEWS

STAND-ALONE MEDICARE PART D PREMIUM INCREASES

Photograph of Braden Medicare Insurance's Medicare Part D Premium Increases Poster

THE MONTHLY PREMIUMS FOR MEDICARE PART D STAND-ALONE DRUG PLANS ARE INCREASING IN 2027

Have you ever noticed that when people refer to the promises of tariffs leveling the playing field- a bailout that benefited pharmaceutical manufacturers- every pharmaceutical company offers an adage that “nothing is certain, but change”; it isn't always the good kind of change.  Take, for example, the cost of Prescription Drugs for Medicare Beneficiaries.  In 2025, the Donut Hole finally ended, which was great for seniors.  Then, CMS announced it could negotiate prices directly with pharmaceutical companies and would focus on 10-20 of the most prescribed, expensive medications each year.  That was great news, and prices on those targeted medications have come down significantly. 

In 2025, Medicare unveiled its new plan with a $2,000 Cap on prescriptions per year!  That was awesome, but that $2,000 threshold is jumping to $2,400 in 2027.  It is still a lot better than the Donut Hole, but unfortunately, Medicare Part D Premiums are also going up noticeably in 2027. Why is this happening?  Why does the government seem to be so infatuated with the Ying and Yang- well, we gave you this and this and that, but now we need to take some things away, so it evens out?  Why does it have to even out for seniors?.

Make no mistake, this increase did not have to happen; it is a direct result of the Trump Administration choosing to end a subsidy for Part D Prescription Drug plans that was initiated under the Biden Administration.  To me, this decision is understandable and Tone Deaf at the same time.

President Trump and Dr. Mehmet Oz have touted the large reductions in prescription drug prices by way of enforcing the Most Favored Nation Trade  Status and holding the drug companies accountable.  They even launched the trumprx.com website to reduce these costs. But why now, when the majority of the country is still firmly in the grip of inflation, gas is at all-time highs, and the promises of tariffs leveling the playing field are not shared by most Americans? Your guess is as good as mine, but I think it was a mistake, and this decision could easily have been delayed another year or two. They have lowered costs for many things, but then they decided to remove a subsidy that benefited most Medicare beneficiaries?

TAKING A CLOSER LOOK AT THE UPCOMING CHANGES FOR MEDICARE PART D

Medicare Advantage plans with prescription drug coverage (MAPD) were never part of the stabilization program because they already receive government rebates that allow them to absorb higher costs more easily without raising premiums.

THE PILOT PROGRAM DID LOWER STAND-ALONE MEDICARE PART D PREMIUMS

The program paid $9.8 billion in 2025 and 2026 to stand-alone Part D prescription plans available to those on original Medicare. The subsidies were meant to help plans transition to a slew of new consumer-friendly provisions in the 2022 law that were expected to raise premiums. But according to Mehmet Oz, this was just a bailout that benefited the Pharmaceutical manufacturers the most.  That may be true, but ending the plan early in the inflationary times we are living in will not resonate well with seniors.

But in response to these and other Part D coverage changes that the law introduced, such as holding insulin costs to $35 a month, making vaccines free for people in Medicare, and allowing the government to negotiate with pharmaceutical manufacturers on drug prices, the Medicare Part D Insurance companies sharply increased their premium bids to the government for 2025 coverage. That prompted the creation of the temporary premium stabilization program.

Without it, it’s possible that Medicare Part D beneficiaries in standalone drug plans in 2024 remained in their plan in 2025, their monthly premium would have nearly doubled, on average,” according to the Government Accountability Office, which released its assessment earlier in the Summer. The Government Accountability Office said that if these premium increases had taken effect, CMS officials expected widespread changes in enrollment for beneficiaries in stand-alone drug plans, which could disrupt beneficiaries’ access to their medications.

ONLY STAND-ALONE PART D PLANS HAVE BEEN AFFECTED

The program provided subsidies to private stand-alone Part D plans that accompany original Medicare coverage, lowering base beneficiary premiums by $15 a month in 2025. The Centers for Medicare & Medicaid Services reduced that premium relief to $10 a month for the 2026 plan year.

The program also limited annual premium increases for stand-alone Part D coverage to $35 for 2025. CMS raised the program’s cap on allowable premium increases to $50 for 2026. The extra subsidies worked as intended, stabilizing year-over-year premium increases and preventing substantial enrollment volatility.

The stabilization program was designed to operate for three years. But last week CMS said it will end the program a year early, concluding that stand-alone Part D plans have enough experience with the redesigned drug benefit to develop their 2027 premiums and coverage without the federal subsidy.

2027 INCREASES HAVE BEEN ANTICIPATED FOR YEARS

Part D premiums for both stand-alone and Medicare Advantage plans were already trending higher for 2027, thanks in large part to the higher drug prices, a more generous Part D benefit and a growing number of costly GLP-1 prescriptions for diabetes, sleep apnea and cardiovascular disease. The bottom line is that these changes and savings caused insurance companies to lose money, so they have decided to act by signaling widespread increases to Stand-Alone Medicare Part D Drug Plan Premiums and by taking a sharp bump in Part D Plan deductibles.

IS THERE ANYTHING YOU CAN DO TO LOWER MEDICARE DRUG COSTS

I believe a lot of progress has been made in lowering the out-of-control costs for prescription medications in the US.  I believe most of the people at CMS have good intentions, but as fast as new drugs become available, there is an unfathomable amount of money that was spent creating and testing them, so the costs for many items are out of reach for most people.

But one thing everyone can do is to write to your representatives in Congress, in the Senate, and to Dr. Oz at CMS and ask them to allow Medicare Beneficiaries to partake in the reduced costs or Manufacturer Savings programs that are offered by every pharmaceutical company, but currently and intentionally ban Medicare beneficiaries from participating. This covers a variety of Medications that are not currently in the formularies of drug insurance companies and, because of that, are out of reach for most Medicare Beneficiaries.  Tell your elected beneficiaries to change the law so every Medicare Beneficiary can benefit from the same savings plan offered to non-seniors every day.  

WRAPPING THINGS UP

I hope today’s article did a good job describing why most everyone will see increased premiums for their Stand-Alone Medicare Part D Prescription Drug plans beginning in 2027. I have been pleasantly surprised by CMS's willingness to attack drug prices, but I believe CMS and Congress can do more to keep money in seniors' pockets.  We invite you to let us know if you found the information in this article interesting and helpful in understanding the future Medicare Part D price increases.  Please email me directly at mike@bradenmedicare.com or call me at (480) 225-1393.

You can also call Medicare directly with questions at 1-800-MEDICARE (1-800-633-4227) or visit the Medicare.gov website to start a live chat. TTY users should call 1-877-486-2048.