The 2026 Medicare Trustees Report indicates that premiums and deductibles for Medicare Parts A and B will rise next year. However, policy experts and insurance professionals tell SavingAdvice that other costs may also rise, making a plan for how to prepare for Medicare open enrollment 2027 essential.
Medicare Expenses and Your Social Security Check
Most people do not pay a premium for Medicare Part A. It is government insurance that pays for inpatient care in hospitals, skilled nursing facilities, hospice, and some home health care. However, it does have a deductible that you would pay. Currently, that amounts to $1,736, but is expected to rise in 2027.
Part B pays for doctor visits, outpatient care, and some home healthcare. It carries a deductible and monthly premium. The premium is taken out of your Social Security check. As a result, an increase in Part B premiums takes away from any increase in Social Security’s annual Cost of Living Adjustment.
How Much Are Part A & B Premiums and Deductibles Rising?
“We do not know yet what Medicare Part A and B premiums and deductibles will be for 2027,” Meredith Freed, a senior policy manager with KFF’s Program on Medicare Policy, informed SavingAdvice. ”But based on estimates from the 2026 Medicare Trustees report, the Part A deductible will increase by 3.0%, the standard Part B premium will increase by 3.3%, and the Part B deductible will increase by 3.2% in 2027. However, these are only estimates and do not account for all out-of-pocket costs Medicare beneficiaries might face, such as prescription drug costs.”
Part D Deductible and Out-Of-Pocket Expenses Rising
If your Part D plan has a deductible, you pay 100% of prescription costs until you reach the deductible, which is set at $700 for 2027. That is an increase of $85 more than the 2026 limit of $615.
After meeting the deductible, you would pay 25% coinsurance until you meet the out-of-pocket cap of $2,400. After that, you would pay nothing. The out-of-pocket cap is $300 higher in 2027 than the $2,100 maximum for this year.
End of Subsidy Will Raise Part D Drug Costs
One of the most impactful changes for 2027 is the end of the Part D Stabilization Demonstration initiated as part of the Inflation Reduction Act (IRA). The stabilization is a subsidy to lower costs of standalone Medicare Part D prescription drug plans (PDP).
Beneficiaries of traditional Medicare generally get their prescription drug coverage through standalone Part D plans.
Originally slated to run through the end of next year, the Trump administration has set the stabilization plan to end this year.
“The current administration has announced that the demonstration is ending early. While PDP premiums for 2027 won’t be released until this fall, we expect premiums will go up for many people in 2027, in part, because of the end of this demonstration,” noted Kata Kertesz, managing policy attorney for the Center for Medicare Advocacy.
Number of Part D Plans Shrinking
The early end of the Stabilization Demonstration is accelerating the decline in standalone Part D plans, according to Kertesz.
From 2021 to 2026, standalone Part D plans have dropped from 30 to 11. That may have contributed to the increase in Medicare Advantage (MA) plans over the same period from 27 to 32.
“The end of the demonstration, coupled with the shrinking standalone Part D market, will likely result in higher premiums for stand-alone Part D plans, leading more people to enroll in private plans,” explains Kertesz. “This will diminish the stand-alone Part D market even more. All of this together unfortunately means that beneficiaries are less likely to have a real choice between traditional Medicare and MA.”
“I expect premiums are going up,” Whitney Stidom, vice president of consumer enablement at eHealth, told SavingAdvice. “They’ll continue to go up for the standalone Part D plans. I’m not sure what we’ll see with Medicare Advantage plans. Those plans often come with prescription coverage, and oftentimes the premium can be zero, so if you are worried about standalone Part D premiums going up, it might be a good idea to compare what a Medicare Advantage plan may cover.”
How to Prepare for Open Enrollment: Step One
Stidom recommends a two-step process to prepare for Medicare open enrollment. That begins with assessing how Medicare plans and your health have changed from last year.
“Did you have a new diagnosis? Some people may have been diagnosed with diabetes, or they have a heart condition they just learned about,” said Stidom. “Things like that are really important along with having a budget, prescriptions and a list of doctors you’re currently seeing or want to see.”
How to Prepare for Open Enrollment: Step Two
Reviewing the annual notice of change (ANOC) letter from your insurance carrier is Stidom’s second step in preparing for open enrollment. Other experts interviewed by SavingAdvice agreed.
“Medicare beneficiaries should look at their Annual Notice of Change (ANOC), which arrives by the end of September, to understand how their prescription drug plan might be changing from 2026 to 2027,” according to Freed. “This may include changes in premiums and deductibles, cost-sharing requirements, and covered drugs.”
The ANOC will also detail other changes in coverage.
“If they are removing a doctor from their network, you will see that in the letter,” said Stidom. “If costs are changing, all that is there, so it should be reviewed to be sure you understand it. You need to ask, ‘Okay, how is my plan changing and am I good with that?’ Then, regardless of whether you’re okay with it, it’s a good idea to shop and compare plans.”
Clearing Up The Confusion
Comparing plans can be confusing because they usually change each year and vary depending on where you live.
“The average beneficiary has over 40 Medicare Advantage plans to choose from,” said Stidom. “Additionally, there could be medical supplement and Part D plans, and so it can be overwhelming. But it doesn’t have to be. My number one tip is to work with a licensed insurance advisor because they have tools available to do an analysis.”
Stidom noted that some Medicare Advantage plans offer coverage for special needs.
“So, there’s also different types of Medicare Advantage plans,” said Stidom. “There is another layer, dual eligible plans.”
Those plans offer help for lower-income beneficiaries who receive both Medicare and Medicaid. In addition, there are plan options that have enhanced benefits for people with chronic diseases.
If you are more of a DIY person or want to do some research before talking to an insurance agent, there are several options for exploring plans on your own. They include the government’s Medicare Plan Finder. In addition, the State Health Insurance Assistance Program (SHIP) offers free one-on-one counseling to sort through Medicare plans and issues. Medicare also offers a helpline for selecting a plan: 1-800-MEDICARE. Stidom noted that eHealth has a Medicare comparison tool.
Drug Price Drops and Telehealth Extension
Amid all the indications of restrictions in coverage options and increased costs, there is some good news for Medicare recipients.
Prices for 15 drugs will decrease thanks to the Medicare Drug Price Negotiation Program.
Like the Part D Stabilization Demonstration that ends a year early, the negotiation program was part of the Inflation Reduction Act created under the Biden Administration. It established ongoing rounds of drug price negotiations. The first round decreased prices on 10 drugs and took effect this year. A second round of 15 drugs takes effect in 2027, and a third round of reductions for up to 15 drugs will take effect in 2028. After that, up to 20 drugs a year will be targeted for price reductions.
Telehealth coverage expanded to all Medicare recipients in 2020. Each year, Congress has voted to extend that coverage another year, including in 2027.
Open enrollment begins October 15 and runs through December 7.
“You can’t start enrolling until October 15th, but you can start reviewing your needs and finances now, so you will be ready to compare plans when they come out,” said Stidom.
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Max K. Erkiletian is a seasoned journalist and analytical reporter with nearly 40 years of experience. He has been nominated for several honors and was part of a team that won the Missouri Press Association’s Community Service Award.
His experience has included covering a wide range of topics, from crime reporting to politics and music. His interview subjects have included U.S. Senators, such as Tom Eagleton; economists, such as Arthur Laffer; former Fed Chair Paul Volcker; and musicians, such as Muddy Waters and B. B. King.
Today, he focuses on personal finance, consumer protection, economic shifts, and investment trends. His reporting aims to make complex issues understood and show how events impact consumers’ wallets.
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