Big Changes Coming to Medicare Part D in 2027: What Beneficiaries Need to Know
My name is Russell Turner. I’m a certified Medicare insurance planner. The name of my company is Navigating on Medicare.
The reason for this video is I get a lot of questions from my clients about things that are going on with Medicare. Of course, Medicare is all I do.
This week on July the 28th, Dr. Oz, who is the director of the Center for Medicare and Medicaid Services, which governs Medicare, came out and said that effective January 2027, the government will no longer pay subsidies to your Medicare prescription drug plan.
So your prescription drug plan, which is also known as Part D for drugs, if you have a Medicare supplement and a standalone drug plan, or if you have a Medicare Advantage plan with a prescription drug plan, it’s going to have an effect on you.
What will happen that we kind of know is that if you have a prescription drug plan, the premium will probably go up as of January 1st, 2027, simply because the government’s no longer paying subsidies.
Now, I’ve had clients call me and go, “Am I going to lose my Medicare Part D?” And the answer to that is no, but you will see some changes.
Now, this year the cap on Medicare prescription drugs out of pocket for you was $2,100. Next year that’s going up to $2,400.
This year your Part D deductible—the government would allow up to $615 for the insurance companies to charge you deductibles, and those are typically on tiers three, four, and five medications. However, this year $615 was the max. Next year, it appears that that new max is going to be $700.
So, there are going to be some changes to your Medicare Part D plan. You’re not going to lose it, but you are going to see probably an increase in premiums.
Now, with that said, what’s really, really important is that you will receive something called an Annual Notice of Change in September. That Annual Notice of Change is just that—it is information to tell you how much your premiums are this year, what they’re going to be next year, the formulary, if it’s going to change your medications, all of that stuff’s going to be really important.
So, again, Russell Turner, Navigating on Medicare. If you have any questions, please don’t hesitate to give me a call. Thank you.
Medicare Part D: Current vs. 2027 Proposed Changes
| Category | Current (2024–2025) | Proposed (2027) |
|---|---|---|
| Government Subsidies | Federal subsidies help lower Part D premiums. | Subsidies end January 2027, causing expected premium increases. |
| Premium Impact | Premiums vary by plan; subsidies help keep costs down. | Premiums likely to rise due to subsidy removal. |
| Out-of-Pocket Drug Cap | $2,100 in 2024; $2,400 in 2025. | Cap expected to adjust; final 2027 amount not yet set. |
| Part D Deductible | $615 max in 2024; $700 max in 2025. | Deductible may increase further in 2027. |
| Plan Availability | Part D plans remain widely available. | Part D continues; no loss of coverage expected. |
| Annual Notice of Change (ANOC) | Sent every September with updates. | Will include premium increases and formulary changes tied to subsidy removal. |
Watch the Medicare Part D 2027 Update
👉 Click here to watch the video on YouTube
In this short video, Russell Turner from Navigating on Medicare explains the upcoming changes to Medicare Part D in 2027, including the end of federal subsidies, expected premium increases, deductible adjustments, and what beneficiaries should look for in their Annual Notice of Change.
DISCLAIMER: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
