Big Medicare Part D news just dropped…
The Centers for Medicare & Medicaid Services (CMS) is ending a program that’s helped keep premiums lower for stand-alone Medicare Part D drug plans since 2025.
And the change could mean higher costs in 2027 for some of the 24.9 million people enrolled in a stand-alone Part D plan.
Here’s what to know.
What’s Happening?
CMS created this program in 2025 to help drug plans adjust to big changes from the Inflation Reduction Act. It effectively lowered the base premium plans use to calculate their premiums, and it capped how much a plan’s premium could go up each year.
In 2025, the program cut the base premium by $15 and capped monthly premium increases at $35. For 2026, those numbers were scaled back to a $10 reduction and a $50 cap. In total, the program provided $9.8 billion in federal subsidies across both years.
CMS will end the program on December 31, 2026. Participating plans will lose the $10 premium reduction they received in 2026. Separately, the base premium that plans use to set prices is set to rise to $41.33 in 2027, up from $38.99 in 2026.
CMS Administrator Dr. Mehmet Oz said plan sponsors no longer need the help: “We are stabilizing the market so this bailout is no longer needed.” He also said premiums will go up by less than $10 per month for most Medicare recipients in 2027, with many seeing lower premiums. CMS later clarified that more than 85% of beneficiaries affected by the program will have access to a Part D plan that is lower-cost or increases by less than $10.
Why Haven’t Weight Loss Drugs Been Covered by Medicare?
When Congress created Medicare Part D in 2003, the law specifically excluded coverage for drugs used for weight loss. At the time, weight loss medications were not as effective as they are today, and obesity was not yet widely treated as a chronic medical condition.
This meant that even if a Part D plan wanted to cover a weight loss drug, it could not legally do so.
That is why a drug like Ozempic has only been covered by Part D when prescribed for type 2 diabetes, not for weight management. Today, Part D plans can also cover certain GLP-1s for other approved medical uses, such as reducing cardiovascular risk and treating obstructive sleep apnea. Coverage for weight loss alone, however, has remained off the table.
What It Means for You
If you have a stand-alone Part D plan, your premium could go up more in 2027 than it did the last two years. Juliette Cubanski of KFF, a health policy expert, says plan-by-plan numbers are not out yet, so no one knows exactly how much any one plan will change.
To put the change in perspective: the subsidy was reducing the average stand-alone premium by about $16 a month in 2026 alone, according to MedPAC.
CMS usually releases exact 2027 plan prices in mid-to-late September. Around that same time, stand-alone Part D plan holders should receive an Annual Notice of Change in the mail: a letter spelling out exactly what premiums, deductibles, and drug lists will look like starting in January.
What Is Medicare Part D?
Medicare Part D is Medicare’s prescription drug coverage. It helps pay for both brand-name and generic prescription drugs, and it works two ways:
- As a stand-alone drug plan, paired with Original Medicare and often a Medicare Supplement plan
- Built into a Medicare Advantage plan that includes drug coverage
Monthly premiums, deductibles, and copays vary by plan.
This change only affects stand-alone drug plans. Medicare Advantage drug coverage is not affected in the same way. Want help comparing plans? We walk through it in How to Pick the Right Medicare Part D Plan.
What’s Not Changing
A few things stay the same in 2027, no matter what happens to premiums:
- The yearly cap on what you pay out of pocket for covered drugs is not going away. It rises from $2,100 in 2026 to $2,400 in 2027. Once you hit that cap, you pay nothing more for covered drugs for the rest of the year.
- Covered insulin still costs no more than $35 for a one-month supply.
- Medicare’s drug price negotiation program, which lowers prices on a set list of high-cost drugs, keeps running.
- Part D still covers ACIP-recommended adult vaccines that aren’t covered by Part B, including shingles and RSV, at $0 cost-sharing with no deductible. Pneumococcal vaccines remain covered under Part B.
- The elimination of the Part D coverage gap (the old “donut hole”) also stays in place.
Why It Matters
Stand-alone Part D premiums already run notably higher than drug coverage bundled into Medicare Advantage, about $36 a month on average versus $8 a month in 2026, largely because Medicare Advantage insurers can offset drug costs using rebates from other parts of the plan. That gap is part of why stand-alone plans felt the biggest impact when the subsidy was scaled back.
What to Do Next
Medicare’s Annual Enrollment Period runs from October 15 through December 7. During this time, you can switch to a new Part D or Medicare Advantage plan for any reason. A plan’s drug list and pharmacy network often matter more to your yearly costs than the premium alone, so it’s worth comparing more than just the price.
Medicare’s Plan Finder tool at Medicare.gov lets you compare plan costs, drug lists, and pharmacy networks side by side.ity requirements.
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PlanFit is a licensed insurance agency. 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.
Calvin Bagley is the founder of PlanFit, The Medicare Store, and Nuvo Health. He and his team have helped over 60,000 people navigate Medicare options, and he’s a nationally recognized speaker in the Medicare industry. Most importantly, he’s someone who believes every American deserves clear, honest information without pressure.