Retirees Could See A 38% Drop In This Medicare Cost In 2027
According to the Centers for Medicaid and Medicare Services (CMS), prescription drugs accounted for $467 billion of U.S. healthcare expenses in 2024, a 7.9% increase from the previous year. Even worse, prescription drug costs are expected to rise an average of 5.7% each year between 2025 and 2034. With that in mind, Medicare beneficiaries looking to reduce their personal spending might use Medicare Part D and/or Medicare Advantage (MA) plans to help cover their prescription drug costs. However, in 2027, premiums for Part D and MA plans are expected to change, with some increasing and others decreasing.
CMS estimates that about 34 million people will be enrolled in MA plans in 2027, with the average weighted premiums for MA plans expected to decrease by about 16% — from $14.37 per month in 2026 to $12.00 per month in 2027. Meanwhile, some monthly prescription drug premiums included in certain MA plans could fall by as much as 38% — from $11.32 to $7 after rebates are applied to help cover Part D expenses. With that said, instead of letting your prescription drug plan renew automatically, retirees might want to compare health plan options during open enrollment — from October 15 to December 7, 2026 – in order to find the best balance between coverage and out-of-pocket expenses.
While some costs fall, many others are expected to rise
Medicare premiums can vary depending on several factors such as your provider's pricing methods, geographic location, medical history, and even coverage options. Despite positive projections from CMS about falling prices of MA drug prescription plans and even price cuts on some widely-used drugs, regular Part D premiums may face increases. In fact, a June 2026 projection from KFF, a nonprofit health policy organization, projects that average Part D Plan premiums could increase up to $51 in 2027 — from $34 in 2026 — if current enrollees keep their existing plans. Even worse, over 4 million low-income beneficiaries currently enrolled in zero-premium plans will see their plans disappear.
Other out-of-pocket prescription drug expenses may also be higher. The 2027 maximum Part D deductible will be $700, up from $615 in 2026. KFF also estimates that average deductibles – $540 for Part D enrollees and $360 for MA enrollees in 2026 — will increase to $643 and $489, respectively. Plus, many enrollees will have to pay coinsurance ranging from 15% to 35%, depending on the type of plan and type of prescription in addition to maximum out-of-pocket prescription drug spending is increasing from $2,100 in 2026 up to $2,400 in 2027.