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In 2027 my and Connie’s Part D premiums will increase from $72.30 to $130.00 per month and our individual deductible will increase from $615 to $700 per year (the maximum allowed). Those new premiums do not include IRMMA extra premiums.
That’s quite a jump in out-of- pocket costs, I’ll cope, but given these premiums have nothing to do with income, such increases will be a true burden for many retirees. More consequences in retirement virtually unable to plan for.
The Inflation Reduction Act significantly increased Part D premiums by shifting more costs to insurance companies. To ease that and help avoid immediate premium increases there were premium subsides.
For 2027 officials determined “the prior subsidies as unnecessary handouts to insurers.” Of course, they are not any such handouts. They help seniors pay premiums. The same claim was made- “slashing handouts”-when reducing payments to Medicare Advantage plans). I wonder if decision makers understand the concept of insurance? No matter…
I could go into the political ideology of this, but my HD lips are sealed. But think of the logic.
Insurance has a real cost, let’s say $100. Party A pays $40 and Person B pays $60. Party A decides it no longer wants to pay $40 determining it is a “handout” so drops to $20. The real cost still exists, insurance companies must cover costs, so Person B now pays $80. In this case there are about 65 million Persons B.
It’s definitely worth shopping on the Medicare.gov website making sure to input your specific prescriptions. My mother’s projected “all-in” cost for 2027 w her current plan was going to be around $1500 (premium plus co-pays). Her “all-in” under what we anticipate will be her new plan for 2027 is just under $64! I’d say that was worth the effort on the website which was prob less than 10 minutes for a savings of over $1400 and 90%+. 🙂
That’s very interesting. As someone who designed employer health plans, I know there is a reason for that, one that may not be readily apparent. How does the low cost insurer do it?
It could be a limited network of pharmacies, it could be circumstances of the prescriptions being taken. It could be the plans past experience, they could be using a loss leader.
The problem with the system is that just one new Rx for the patient could change the entire picture.
The structure of Part D plans is an abomination.
Seniors should not have to deal with so many variables. All plans should have the same formularies covering every drug with FDA approval and also have open pharmacy networks.
The only legitimate variable should be selecting the deductible and co-pays you are willing to fund.
As I have said before and based on years of experience, when it comes to health benefit plans, choice, especially multiple choices is not a good idea, it is overwhelming for many, perhaps most people and it is unfair because it leads to adverse selection and cost shifting.
One of my major beefs with part D insurers is that they are not required by law to continue to cover all medications that are listed in their formulary at the time of open enrollment through the end of the contract year.
You’re absolutely right. The law was probably written by the insurers. As I said, all FDA approved drugs should be on every formulary. I have many years explaining health benefits to people but trying to cover all the variables individuals face with Part D is ridiculous. The fact people can be at risk for a Rx they weren’t taking at the start of the year is just wrong. The entire structure of competition is working against people.
As an example I just started using a steroid inhaler. The one ordered through CVS was twice what I paid for through Mark Cuban’s cost Plus Pharmacy. Purchases through them do not go towards my Medicare deductible or max out of pocket through my part D plan. Since it is the end of the year I will not meet my max out of pocket.
I will search the Medicare website in November for the best plan beginning in January.
That’s something else that gets people fouled up. By not using Part D but rather a discount plan a person may never get to the OOP Part D limit. They may save in the short run, but not in total for the year.
We had a drug denied and we could have used GoodRx, but because we would potentially miss out on the OOP cap, I appealed and got the drug approved and have not paid for a Rx since July.
And actually the network of pharmacies under the less expensive plan is better. Beats me.
And you’re an expert in the field and can much more easily assess all the issues and moving parts. My mother and the average senior cannot. It’s a mess.
You are absolutely correct. Most people look at the premium and stop there. That can be a big mistake, but understanding the formulary and the different tiers used for copays can be impossible. And as mentioned, to make it worse nobody can predict the drugs that may be prescribed over the next year.
Medicare Rights Center said on Oct. 1:
Just be sure and look under the hood at those prices. Insurance companies are subsidized, make money on discounts and rebates. Premiums are a small part. However, be sure you understand pharmacy networks, all possible out of pocket costs, and especially formularies and how brand vs generic drugs are handled.
FYI – CMS has loaded the 2027 plans and they are now available for comparison shopping on Medicare.gov
I shop Part D every year. In my 4 years on Medicare, I have changed providers each year to get to a lower net price. It is always messy as prescriptions have to be reissued to the new pharmacy but my doctor is understanding.
It’s usually very easy for the doctor . They just click in a drop down box one time and done.
Is it really worth the time and effort? I would think that can only work if your prescriptions stay the same and you don’t run into formulary issues. When you say Net price, I assume you are not just talking premiums, but total out of pocket costs.
It doesn’t take much time to shop Part D plans during open enrollment. Login to medicare.gov, update your drugs and pharmacies, and see plans sorted by total cost (premiums plus drug copays/deductibles). You can often sign up for a Part D plan at medicare,gov. That will notify the previous plan to drop coverage on Dec. 31.
How much on average have you saved in a year by doing this?
Although I am in a group plan so I don’t shop, I have played around with the Part D Medicare plan finder out of curiousity . The differences (Massachusetts) I could see were worth doing . Friends have told me the same thing. I don’t think the Medigap differs much though
It’s good to shop/review plans annually regardless of saving on premiums to verify your drugs are still covered by your preferred pharmacies. I *think* only covered drugs count toward the annual out-of-pocket of $2,400.
Example of lower premium in 2027:
Wellcare Value Script premium was $22.80 in 2026 in New Jersey and $5.30 in 2027.
Yes, only covered drugs count. Given plans lost the temporary federal subsidy for 2027 and lowered the premium, they were charging too much and or increased deductible or copays for 2027. What are your ded and copays?
I save $500 to $1000 vs staying with the old plan each year. I am on expensive GLP-1 drugs to control type 2 diabetes. It almost seems intentional that they want you to move. The weird fact is I have cycled back to the prior year provider who now has a different plan each time.
I volunteer with the SHIP program, a benefit of Medicare, that helps seniors find Part D coverage and I can tell you that we regularly find very large cost differences in some situations. The largest I have seen is about $7k. Remember that cost is the cost of the drugs plus the Part D premiums.
Please contact you local SHIP program or go to the Medicare.gov site for 2027 and shop the plans for yourself. All that you need is a list of yourprescriptions. Also be sure to select several pharmacies in your area. Price differences are amazing.
No one will pay more than $2400 in 2027 plus premiums. That seems to mitigate the co-pay issue to some extent.
As long as you are using a plan that covers drugs you use, you won’t pay more than $200 a month out of pocket.
My wife hit that level in July and since, every renewal was no cost.
Yes, when someone has expensive prescriptions, the limit is a great benefit, provided they have income available. But that’s not the point.
Your $200 a month ignores premiums. In 2026 Iowa has plans that range in cost from about $4 a month to over $120 a month. I regularly see people that do not shop their plan. They stayed with the same company and pharmacy for years, and it has cost them dearly. The insurance company controls the formulary, plan design and contracting with pharmacies and much of that changes each year. The point is to be proactive to control costs.
As to income, low income seniors should also ask about the low income subsidy provided by Medicare, (LIS) for more cost savings.
You can apply to have your OOP annual costs paid monthly in equal payments to smooth out any large payments before the cap is reached.
It would be nice, but most of the payment plans I have sen in counseling seniors are not equal. And if prices for the drugs change, payments will be modified.
If you will likely hit the $2400 annual out-of-pocket, that’s an argument for signing up for the plan with lowest premium that covers your drugs.
For example, Wellcare Value Script PDP premium is $5.30 in 2027 in New Jersey and has $0 copay/no-deductible for Tier 1 Preferred Generic drugs.
What about other drugs?
Plans all deal with the same drugs on the market. They decide what is on their formulary, which tier, extent of pharmacy network and discounts and of course, look at the experience within their population. Now they have to help pay for the OOP limit. None of them are going to lose money.
So somewhere in the mix of deductible, copays, coinsurance accessibility, formularies and premiums, its going to be paid for one way or the other.
And each consumer should shop their plan to pay the lowest allocation of those costs possible.
You’re right- based on what I see on social media posts , most Medicare beneficiaries have no idea what’s going on. I am in a group plan through my former employer and have not seen my premium increase yet. They combine Part D with Medigap premium. One time I tried asking out of curiousity what the breakout was but they couldn’t tell me
As an old employee benefit director I can assure you they could tell you if they wanted to.
Shopping plans won’t do much good; the cause of most increases is not because of underlying costs, but because laws and political decisions have simply shifted costs and the insured population will pick up the different.
For some reason the thinking is, don’t send money to insurance companies because they are ripping us off. Instead let the patients send it and government saves money.
This is an amazing smoke and mirrors strategy to find another scapegoat. I doubt most Medicare beneficiaries will understand what is actually going on. 😢🥵
Most people won’t believe this, but insurance companies are not the enemy, they don’t make excessive profits, their net profit margins are low, about the same as regulated utilities. But I guess we have to have someone else to blame.
The ironic thing is the majority of workers with employer coverage don’t even have insurance. Their employer is self-insured and the company on their ID “insurance” card just processes claims for a fee and has no risk for claim payments.
On a nationwide basis, I agree. But any change will take a long time and Medicare beneficiaries are not in control of those changes.
Individuals need to optimize their coverage by shopping or waste the resources they control.
We have a preferred stand alone Plan D for our drug coverage and, like your plan, our current plan premium will increase in 2027 over 70% compared with our 2026 premiums primarily because of the prior subsidies ending.
After 10/15/2026 I will do my annual comparison on Medicare.com of available plan costs and features with other plans available in our area for 2027. The key to our final decision of plans for 2027 will be the expected combined expense of premiums and out of pocket expenses. For those taking a high cost prescription the intuitive response to buying the plan with the lowest premium may not be the lowest overall cost decision for you. A great feature with Plan D has been you can make an informed decision annually of which Plan D is best for you. I hope that choice of plan option continues going forward.
For those under age 65 I would encourage making the maximum contribution to a health savings account (HSA) if one is available to you and to delay spending your HSA till after age 65. I did the maximum contribution part but did not wait until after 65 to spend part of my HSA balance on qualified medical expenses. I now wish I had waited. I also wish I did not have to take a high cost drug but…
My mother just got her 2027 increase notice. Going from $40/mo to over $120/mo. She’ll definitely be shopping around in open season.
A good reminder that Original Medicare beneficiaries should shop Part D plans annually for formularies, preferred pharmacies, and total out-of-pocket.
My Part D premium is increasing from $3.60 to $5.30. I can imagine that plans with better coverage, e.g., lower co-share for higher Tier drugs, have higher increases for 2027.
I wonder if Medicare Advantage plans will increase premiums (often $0) if they’re impacted by the government removing the drug plan premium subsidies.
Our Part D premium has been at $0 for several years, I will post an update after I talk to my agent in a few weeks. We too will survive an increase, but I know many people who will have difficulty. I wonder if increases will cause a significant number of people drop the insurance.
Just a caution; when you renew or change your plan this year, be sure to set your billing option to deduct from your social security check, even if it is $-0-. That way you will be assured it will be paid if the premiuom changes.
Iowa had a $-0- premium option that became a $4.20 option. Many did not notice the change until they received the cancellation notice. When these people enroll in part D for 2027, they will have a penalty attached for the time they were not in a plan.
Mark, thank you so much for pointing this out. We never considered opting for the social security deduction because our premium has been $0 for the past two years. It’s increasing to $5.30 in 2027, but we’ll shop for the best plan before renewing.
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