Medicare drug premiums to jump 50% for most in 2027, study finds

Medicare beneficiaries with stand-alone prescription drug plans face a steep price hike in 2027. A new analysis by the Kaiser Family Foundation (KFF) projects that average monthly premiums will rise by 50%, jumping from $34 to $51.

Enrollees can avoid this average increase by switching to lower-cost options during the current open enrollment period. The window to make these changes runs through December 7. Robert Travis Scott of Abingdon, Virginia, already made a change in late October after receiving a notice that his AARP-UnitedHealthcare plan would climb from $39.60 to $121.90. After comparing prices online, he selected a Humana plan with similar benefits for $19.30 a month. Scott estimated that the switch saved him approximately $1,000 for the coming year. He described himself as quite happy with the new arrangement and worried that other seniors might miss the opportunity to save money.

The rising costs are part of a wider affordability conversation leading up to the November midterm elections. President Donald Trump recently claimed his administration successfully negotiated lower medicine prices from manufacturers. Speaking at a campaign rally in Ohio on October 28, Trump stated that the U.S. now has the lowest drug prices in the world. He said, “What we’re doing great with is pharmaceuticals, hundreds of billions.. We have the lowest drug prices anywhere in the world.” However, the actual cost for individual patients varies based on their specific medications and insurance coverage.

The financial burden differs greatly depending on the type of Medicare plan. Beneficiaries enrolled in Medicare Advantage plans will see much smaller increases. KFF found that the average drug cost within these plans will be $9 in 2027, an increase of less than $2 per month. More than half of all Medicare beneficiaries are currently in these plans, which typically bundle drug benefits with medical coverage. In contrast, nearly 25 million people rely on stand-alone prescription drug plans, while about 31 million receive coverage through Medicare Advantage plans.

Beyond monthly premiums, other out-of-pocket costs are also rising. Most enrollees will face an annual deductible for drug coverage in 2027. The average deductible for stand-alone plans is projected to be $643, up from $540 in 2026. For those in Medicare Advantage plans, the average deductible will be $489, compared to $360 in 2026. Additionally, most enrollees will shift from fixed copayments to coinsurance. This change means paying a percentage of the drug's cost, which can make monthly expenses less predictable.

One factor driving the premium surge is a decision by the Centers for Medicare & Medicaid Services (CMS). In July, CMS ended a three-year pilot program early. This program had provided subsidies to stand-alone plans in 2025 and 2026 to help keep premiums down. CMS Administrator Mehmet Oz referred to the subsidy program as an insurance industry bailout. KFF noted that its projection differs from CMS, which predicted a smaller national average increase from $35 to $36. KFF suggested that CMS may have assumed many people would switch to cheaper plans. CMS did not immediately respond to requests for comment on these findings.

The impact will be widespread. KFF found that 10.4 million Medicare enrollees, representing 76% of those in stand-alone plans without low-income subsidies, will pay higher monthly premiums if they keep their current plans. This group includes 4.1 million people currently in zero-premium plans. Since no zero-premium options will be available in 2027, these individuals will automatically face higher costs next year.

The KFF analysis provides a detailed look at the shifting costs for millions of Americans. The data underscores the financial pressure on those with stand-alone coverage as the market adjusts following the end of federal subsidies.