Don't sit on the sidelines during open enrollment
Medicare's open-enrollment period began Oct. 15 and runs through Dec. 7. During this time, beneficiaries can choose a prescription drug plan, among other options.
Premiums for Medicare prescription drug coverage will jump an average of 50% in 2027, which may push normally complacent enrollees to shop around during this open-enrollment period.
The estimated average monthly premium for Medicare Part D stand-alone prescription drug plans (PDPs) is projected to be $51 in 2027, a 50% increase over 2026, when that figure was $34, according to KFF, a healthcare research and policy firm. Average monthly premiums for the eight national prescription drug plans are projected to range from around $6 to $204 in 2027, KFF said.
"With some plans increasing premiums substantially, the stakes are higher this year for people with Medicare stand-alone drug coverage if they sit on the sidelines during open enrollment," said Juliette Cubanski, a vice president and director of the program on Medicare policy at KFF. "There are relatively low-premium PDP options, but people facing large premium increases need to take action if they want to avoid paying significantly more."
The research comes as the cost of living is climbing for people of all ages. Healthcare costs are a particular concern as Americans are living longer, and those expenses can add up as people get older. A 65-year-old retiring in 2026 can expect to spend an average of $185,500 on healthcare and medical expenses throughout retirement, according to Fidelity Investments. That figure does not include long-term care.
An individual's medical needs can change from one year to the next and even over the course of a given year, so it's important to compare plans carefully. Medicare Advantage and Medicare prescription drug plans can also change each year - another reason to shop around.
Yet 65% of Medicare beneficiaries did not compare their Medicare coverage options during last year's open-enrollment period, KFF found. The share of beneficiaries who did not compare coverage options was greater among people in traditional Medicare than among those enrolled in Medicare Advantage, the private-plan alternative.
One-third of those with Medicare coverage of any kind spend less than an hour reviewing their plan, according to a poll from the Institute for Healthcare Policy and Innovation at the University of Michigan. A total of 80% of survey participants kept their coverage from the previous year, the poll found.
Medicare's open-enrollment period began Oct. 15 and runs through Dec. 7. During this time, eligible adults can switch from traditional Medicare to a private Medicare Advantage plan, change from one Medicare Advantage plan to another, and join or change a Medicare Part D prescription drug plan. These changes take effect on Jan. 1.
Monthly premiums in 2027 are estimated to be more than five times higher for prescription drug plans in traditional Medicare compared with Medicare Advantage plans with prescription drug coverage (MA-PDs): $51 versus $9. The average monthly Part D premium is projected to increase by $17 for prescription drug plans but by less than $2 for Medicare Advantage prescription drug coverage, KFF found.
Among enrollees in stand-alone drug plans who don't have low-income subsidies, 76% - or 10.4 million people - will pay a higher monthly premium in 2027 if they make no changes during open enrollment. That's up from 56% of enrollees who faced a higher premium for their plan in 2026.
Most Part D enrollees also will face a deductible for drug coverage in 2027, including 85% of enrollees in Medicare Advantage prescription drug coverage (up from 80% in 2026) and virtually all PDP enrollees (99.8%, up from 96% in 2026), KFF said.
These higher prices could push beneficiaries to shop around this enrollment period.
"People tend to be more responsive to substantial premium increases along the lines of what we're seeing for some Medicare prescription drug plans for coverage in 2027," Cubanski said. "So we could see many enrollees in these plans shopping around and switching plans during this open-enrollment period."
Previous research from KFF found that Medicare beneficiaries did switch plans when the prices rose substantially. The share of traditional Medicare beneficiaries enrolled in prescription drug plans who voluntarily switched plans during the open-enrollment period in 2020 was 21%. The percentage of those with Medicare Advantage prescription drug plans who changed was 10%.
Many beneficiaries, meanwhile, will need to shop for 2027 coverage because their current plans are being terminated. About 4.3 million Medicare beneficiaries - including 3.1 million Medicare Advantage drug plan enrollees and 1.2 million prescription drug plan enrollees - will see their plan terminated at the end of 2026, KFF said.
-Jessica Hall
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