Medicare drug plan premiums jump 50% for most seniors

Robert Travis Scott of Abingdon, Virginia, received a notice in late October stating that his AARP-UnitedHealthcare Medicare prescription drug plan premium would surge from $39.60 in 2026 to $121.90 in 2027. After comparing options online, Scott switched to a Humana plan with comparable benefits for $19.30 a month. He estimated this move saved him approximately $1,000 for the coming year.

A new analysis by KFF found that the average monthly premium for stand-alone Medicare prescription drug plans will increase by 50% in 2027. The national average cost will rise from $34 to $51. Enrollees can avoid this average increase by selecting lower-cost plans during the open enrollment period, which remains open through Dec. 7.

Juliette Cubanski, a vice president and director of the Program on Medicare Policy at KFF, noted that the stakes are higher this year for those with stand-alone coverage. She 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.”

The premium hikes occur as President Donald Trump claims success in lowering medicine prices. Speaking at a campaign rally in Ohio on Oct. 28, Trump stated, “We have the lowest drug prices anywhere in the world. We went from the highest drug prices, we now have the lowest drug prices, favored nations, anywhere in the world.” His administration has pointed to negotiations with drug manufacturers as a key policy win ahead of the Nov. 3 midterms.

Enrollees in Medicare Advantage plans, which replace traditional Medicare coverage, face smaller cost increases. KFF data shows these beneficiaries will pay an average of $9 for drugs in 2027, an increase of less than $2 per month. More than half of Medicare beneficiaries are currently enrolled in these health plans, which typically include a drug benefit.

Beyond monthly premiums, out-of-pocket costs are rising across the board. The average deductible for stand-alone plans will reach $643 in 2027, up from $540 in 2026. For Medicare Advantage plans, the average deductible will rise to $489 from $360. Most enrollees will also shift from fixed copayments to coinsurance, requiring them to pay a percentage of drug costs rather than a set amount.

KFF attributes part of the premium increase to a July decision by the Centers for Medicare & Medicaid Services to end a three-year pilot program early. This program provided subsidies to stand-alone plans in 2025 and 2026. CMS Administrator Mehmet Oz described the subsidy program as an insurance industry bailout. KFF noted that its findings differ from a CMS projection that predicted only a $1 increase in the national average premium.

Nearly 25 million people are enrolled in stand-alone prescription drug plans, compared to about 31 million in Medicare Advantage plans. KFF found that 10.4 million stand-alone enrollees without low-income subsidies will pay higher premiums if they stay in their current plans. This group includes 4.1 million people currently in zero-premium plans, a category that will not exist in 2027.