Every September, a thick envelope arrives from your drug plan. It’s called the Annual Notice of Change, and most people skim it and file it away. This year, it’s worth opening.
A temporary federal subsidy has quietly held down standalone drug plan premiums since 2025. It ends December 31, 2026. That makes 2027 the first year since 2024 that plans set their prices without it. Below, we walk through the Medicare Part D changes for 2027, who they touch, and what to check before December 7.
If you’re newer to Medicare and want the foundation first, our guide to Medicare basics covers Parts A and B and where drug coverage fits.
Is This About You? Who Is and Isn’t Affected
The subsidy applied to one kind of coverage only: standalone Part D plans. A standalone plan is drug-only coverage you buy on its own. Most people pair it with Original Medicare, often alongside a Medicare Supplement (Medigap) policy.
If that’s your setup, this change is aimed at you. A supplement covers no prescriptions at all, as our comparison of Medicare Supplement plans explains. Your drug plan does all of that work.
Here’s how Utah splits, using CMS enrollment data reported by healthinsurance.org:
| How Utahns get Medicare drug coverage (Feb. 2026) | People | Affected by the subsidy ending? |
|---|---|---|
| Standalone Part D drug plan | 141,012 | Yes |
| Drug coverage bundled into a Medicare Advantage plan | 248,855 | No |
If your drug coverage comes built into a Medicare Advantage plan, you can set this particular story aside. The subsidy was never what held that premium down. FactCheck.org reached the same conclusion, since the program targeted standalone plans. Advantage plans have their own changes this year, and our companion piece on Medicare Advantage changes in 2027 covers them.
One more thing, because many readers arrive worried: Part D itself is not being cut. The yearly cap on out-of-pocket drug costs continues. So do the $35 monthly limit on covered insulin and $0 cost for recommended vaccines. What’s ending is an extra subsidy, not the benefit.
If you get Extra Help, the federal program that helps pay Part D costs for people with limited income, you’re in a different spot. Extra Help largely shields you from premium changes. According to CMS, about 13.6% of Utahns in standalone plans receive it. Your rules are specific, so a short conversation is the easiest way to confirm where you stand.
What Did This Subsidy Do?
In 2022, the Inflation Reduction Act redesigned Part D. It closed the old coverage gap, often called the “donut hole.” It also created a hard yearly cap on what you pay out of pocket for covered drugs. That was good news for people with high drug costs. But it shifted more of the bill onto the insurers that run the plans.
To keep standalone premiums from spiking during that shift, CMS launched the Part D Premium Stabilization Demonstration for 2025. According to KFF’s analysis, it worked in two ways. First, it lowered the base beneficiary premium, the starting number Medicare uses to figure each plan’s premium. Second, it capped how much a plan’s monthly premium could rise from one year to the next.
The program cost about $9.8 billion across 2025 and 2026. KFF, citing federal advisors at MedPAC, reports it trimmed the average standalone premium by about $26 a month in 2025 and $16 a month in 2026.
It was always meant to be temporary. When CMS created it, the agency said it could last at least three years. So ending it after two is an early wrap-up, not a change to the drug benefit itself.
Why end it now? In its July 28 fact sheet, CMS said its review of 2027 bids showed that plans now have enough experience under the redesigned benefit. In the agency’s view, plans can set prices without the extra support, and the market can return to normal conditions.
Medicare Part D Changes for 2027: The Numbers
Here’s what CMS has confirmed about the Medicare Part D changes for 2027, and what is still an estimate. Pay attention to the status column. Many articles blur the two.
| Item | 2026 | 2027 | Status |
|---|---|---|---|
| Part D deductible (maximum) | $615 | $700 | Final |
| Part D yearly out-of-pocket cap | $2,100 | $2,400 | Final |
| Part D base beneficiary premium | $38.99 | $41.33 | Final |
| National average monthly bid amount | $239.27 | $296.05 | Final (not a premium) |
| Average standalone drug plan premium (national) | $35.09 | $36.00 | CMS estimate, released Sept. 28 |
| Standalone drug plans offered in Utah | 10 | 8 | Final |
| Part B standard premium | $202.90 | About $209.50 | Projected |
| Part B deductible | $283 | About $292 | Projected |
The deductible is what you pay for covered drugs before your plan starts sharing the cost. Its rise to $700 is about 14%, the steepest one-year jump since the redesign. Many plans set a lower deductible or skip it for certain drugs, so check your own letter.
The 2027 Part D limits come from CMS’s April 2026 rate announcement. As of this writing, Medicare.gov’s cost page still lists 2026 amounts. The Part B figures are projections from the 2026 Medicare Trustees Report. CMS usually confirms them in November.
One number needs a short explanation. The national average monthly bid amount is an average of what insurers project it costs them to provide the basic drug benefit. It rose about 24%. It is not anyone’s premium. It’s simply the clearest sign that the cost underneath the benefit is climbing.
So What Happened to Premiums?
CMS released the 2027 plan data on September 28. Its announcement projects the average standalone premium will rise less than $1 a month nationally. CMS Administrator Dr. Mehmet Oz has described the subsidy as a handout to insurers that the market no longer needs.
Before that data came out, KFF cautioned that some standalone enrollees could face larger increases than in recent years. Both views can hold at once. A national average can stay flat while individual plans move up, down, or sideways.
Utah’s own CMS fact sheet shows how much plans differ. It says every Utahn in a standalone plan has access to a plan with a lower premium than they paid in 2026. That doesn’t mean switching is right for you. It means prices vary widely across the eight plans. The honest answer is that your number depends on your plan, and the only way to know is to look.
The Real Risk Is Auto-Renewal
Here’s how renewal works. If your plan continues and you do nothing, Medicare keeps you in it. You’ll have the same plan at its 2027 price, with its 2027 drug list and its 2027 cost tiers.
Most people let that happen. A KFF study of Medicare survey data found nearly 7 in 10 beneficiaries didn’t compare their coverage with other options during open enrollment. Among standalone drug plan members, 69% didn’t compare their drug coverage. The share was higher for people 85 and older and for those with lower incomes.
That’s not a failing. The letters are long, and the choices are confusing. In a quiet year, staying put usually costs little. This year, though, the deductible jumped, a subsidy went away, and Utah went from 10 standalone plans to 8. Those are solid reasons to take a closer look at the Medicare Part D changes for 2027 as they apply to you.
If your plan is leaving or merging with another plan, your letter should say so. You’ll have choices in that case, and it’s worth talking them through before you pick one.
How to Read Your Plan Letter in Ten Minutes
Your plan letter is where the Medicare Part D changes for 2027 become specific to you. Grab the envelope, a pen, and your current prescription bottles. If you’re helping a parent, sit down together and do this side by side. Then work through these five checks.
- Find the premium line. Look for your monthly premium for 2026 and 2027, usually in a side-by-side table near the front. Write down both numbers.
- Find the deductible line. Note the 2027 deductible and which drug tiers it applies to. Some plans skip it for lower-cost generics.
- Check each prescription against the formulary. The formulary is the plan’s list of covered drugs. Confirm that every medication you take is still on it for 2027.
- Check each drug’s tier. Tiers are price levels, and a higher tier usually means a higher copay. Circle any drug that moved up.
- Check your pharmacy. Many plans charge less at “preferred” pharmacies. Make sure yours is still preferred in 2027.
Then add it up. Premium alone is the wrong way to choose a drug plan. A plan with a higher premium can still cost you less over the year if it covers your drugs well. The number that matters is your total yearly cost: premiums, plus the deductible, plus what you’ll pay for each drug at its tier.
Our page on Medicare prescription drug plans explains formularies and tiers in more detail. Starting October 1, you can also run the math yourself on the Medicare Plan Finder. Enter your prescriptions and pharmacy, and it estimates yearly costs for the 2027 plans in your area.
Your Deadline, and How We Can Help
Here’s the takeaway. The subsidy is ending, Part D itself is not, and the national average barely moved. What changed for you depends entirely on your plan. The Medicare Part D changes for 2027 make this a good year to open the envelope instead of filing it.
Open enrollment runs October 15 through December 7, 2026. A change made by December 7 takes effect January 1, 2027.
If you’re holding an unopened plan letter, we’d be glad to help you make sense of it. We’ll run your actual prescription list against the 2027 standalone plans we offer in your county. Then we’ll compare total yearly cost across premium, deductible, drug tier, and preferred pharmacy. That’s hard to do by hand, one plan at a time.
The review costs nothing. Staying in your current plan is a perfectly good outcome, and often it’s the right one. Bring your prescription list, including dosages, and schedule your free drug plan review before December 7. You can also browse our full range of Medicare services or read more about standalone drug coverage.
Groberg Insurance Advisors is a licensed independent insurance agency in Utah. We are not connected with or endorsed by the United States government or the federal Medicare program. This is an advertisement and a solicitation for insurance. 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. The 2027 Part B figures above are projections until CMS confirms them. Plan availability, premiums, and formularies vary by county and are subject to contract renewal.
