Medicare drug premiums to jump 50% to $51 next year, study shows

Average monthly premiums for Medicare stand-alone prescription drug plans will increase by 50 percent in 2027, according to a new analysis by the Kaiser Family Foundation. The study projects that the typical cost will climb from $34 in 2026 to $51 next year. However, beneficiaries can often avoid this average hike by switching to a lower-cost plan during the open enrollment period, which ends on December 7.

Robert Travis Scott, who lives in Abingdon, Virginia, acted on his own premium increase notice in late October. He received a letter stating that his AARP-UnitedHealthcare Medicare drug plan would rise from $39.60 a month in 2026 to $121.90 in 2027. After comparing prices online, Scott selected a Humana plan with similar benefits for $19.30 a month. He estimated that this change saves him roughly $1,000 over the next year.

Scott said he was surprised by the large jump in his current plan’s cost. He expressed concern that other seniors might not shop for alternatives and could pay more than necessary. “Yes, I am quite happy about that,” Scott said regarding his new coverage. He added that the high stakes for people holding stand-alone drug coverage are greater this year if they do not review their options during open enrollment.

Juliette Cubanski, a vice president and the director of the Program on Medicare Policy at KFF, noted that the potential for savings is significant. She warned that beneficiaries who stay with their current plans face higher risks of paying substantially more. The KFF analysis, which informs these projections, indicates that 76 percent of stand-alone plan enrollees who do not receive low-income subsidies will pay a higher premium in 2027 if they keep the same plan.

Nearly 25 million people currently enroll in Medicare stand-alone prescription drug plans, KFF reported. Another 31 million receive drug coverage through Medicare Advantage plans. While the average premium increase for stand-alone plans is steep, those enrolled in Medicare Advantage will see smaller hikes. The analysis found that Medicare Advantage enrollees will pay an average of $9 for drugs in 2027 as part of their overall monthly premium, an increase of less than $2 per month.

The rise in stand-alone premiums may be linked to a decision by the Centers for Medicare & Medicaid Services in July. CMS ended a three-year pilot program early, a program that had paid subsidies to stand-alone plans in 2025 and 2026. KFF stated that ending this subsidy after only two years could drive up costs in 2027. CMS Administrator Mehmet Oz has described the subsidy program as an insurance industry bailout.

KFF’s findings differ from the projection offered by CMS. The federal agency predicted only a $1 increase in the national average premium, moving from $35 to $36 based on September 2026 enrollment data. KFF noted that CMS did not explain its calculation methods and suggested the agency may have assumed many people would switch to lower-cost plans. CMS did not immediately respond to a request for comment on the KFF figures.

Beyond monthly premiums, beneficiaries face higher deductibles and less predictable out-of-pocket costs in 2027. The average deductible for stand-alone plans will reach $643, up from $540 in 2026. For those with Medicare Advantage plans, the average drug deductible will rise to $489 from $360 in 2026. Most enrollees will also pay coinsurance instead of fixed copayments, meaning they will pay a percentage of the drug’s cost rather than a set amount.

Four million 100 thousand enrollees are currently in zero-premium stand-alone plans. These individuals will automatically pay more in 2027 because no zero-premium plans will be available in that market, the KFF analysis found. This group represents a portion of the 10.4 million enrollees expected to see a premium increase if they remain with their current insurers next year.

President Donald Trump has claimed his administration has negotiated lower medicine prices with manufacturers. At a campaign rally in Ohio on October 28, he stated, “What we’re doing great with is pharmaceuticals, hundreds of billions.” He added that the U.S. now has the lowest drug prices in the world due to favored nation pricing policies. These remarks came ahead of the November 3 midterm elections, where rising drug costs are a key affordability issue for voters.