Medicare beneficiaries could face a bit of sticker shock next year when paying for their Part D plans, as the Center for Medicare & Medicaid Services has announced that it will end a subsidy program that helped keep premiums manageable for those with stand-alone drug plans. The changes will take effect in January 2027.
This could be alarming for those already struggling with their retirement healthcare costs. But there are steps you can take to keep your prescription drug costs under control next year.
Image source: The White House.
What's changing for Medicare beneficiaries in 2027
President Donald Trump's administration has elected to end the Part D Premium Stabilization Demonstration, a temporary subsidy program that reduced Part D premiums for seniors and capped the year-over-year premium increase. This program ran from 2025 through 2026, so if you've had a Part D plan within the last couple of years, you've likely benefited from these savings.
Without the subsidies in place, Part D premiums could increase much more in 2027 than in years past. That could force you to rethink your budget and may increase your annual spending faster than you expected.
How to keep your prescription drug costs manageable in 2027
We don't know exactly how much Part D premiums will be next year, but you'll have a chance to review them during Medicare's Open Enrollment Period, which runs from Oct. 15 to Dec. 7 of this year. This is your chance to elect new coverage for next year or to switch from Original Medicare to a Medicare Advantage plan or vice versa. Use this time to compare your options and choose the plan that covers your medications at the most affordable price.
If you have any questions about how your Medicare Part D plan will change next year, make sure to clarify them with the plan provider. One phone call now could save you a lot of confusion and unexpected costs down the road.
You can also explore other ways to keep prescription drug costs down, such as switching to a generic version of your medication if one is available, using coupons, or comparing prices at different pharmacies. Some drug manufacturers also offer financial assistance programs to seniors or low-income families that you may qualify for.
Once you have an idea of how much you'll pay for your Part D plan premiums and other Medicare-related costs next year, you can start building out your 2027 budget. Keep in mind that your Social Security benefits will also get a boost next year, so that will help cover some of your extra costs.
