The 2027 Medicare changes are real, and they start with your wallet. If you rely on Medicare Part D for prescription drugs, or if you are on a Medicare Advantage plan and want to compare options, this is the year to sit down and review your coverage before the Annual Enrollment Period opens. The Centers for Medicare & Medicaid Services (CMS) has released preliminary Part D bid data, finalized a major rule for Contract Year 2027, and ended the temporary premium stabilization demonstration that kept premiums artificially low in 2025 and 2026. All of that means your premiums, out-of-pocket costs, and plan options could look different on January 1, 2027 than they do today.
This is not abstract policy. It is the practical stuff that determines whether you pay more or less next year, whether your prescriptions are covered, and whether you have time to make a change. The Annual Enrollment Period runs from October 15 through December 7, 2026, for coverage that takes effect January 1, 2027. That means you have a clear window to compare, decide, and act. If you miss it, you are locked in for the full year unless you qualify for a special enrollment period.
Here is what you need to know about the 2027 Medicare changes before AEP, and a checklist to make sure you are not caught off guard.
1. Part D Premiums Are Going Up — But There Is a Cap
For 2027, the national base beneficiary premium for Medicare Part D is $41.33. That is the starting point that plan sponsors use to calculate your actual premium, which will vary based on the specific plan you choose, your geographic region, and any low-income subsidies you receive.
The good news is that the Inflation Reduction Act (IRA) capped annual premium increases at 6% per year through 2029. So while the base premium is going up, it will not spike the way it might have without that protection. If you are on a standalone Part D plan, your actual premium will depend on the plan you select and whether you receive Extra Help or pay an Income-Related Monthly Adjustment Amount (IRMAA).
The key point: you will see a number on your plan materials that looks different from last year. That is expected. What matters is whether your plan still covers the drugs you need at a cost you can manage.
2. The Premium Stabilization Demonstration Is Ending
This is one of the most significant 2027 Medicare changes. In 2025, CMS launched a temporary demonstration program to cushion standalone Part D plans during the transition to the new benefit structure. The goal was to prevent sudden premium swings while insurers adjusted to the new rules, including the $2,000 annual out-of-pocket cap on prescription drugs.
CMS announced in July 2026 that the demonstration will end at the close of 2026. Starting in 2027, plan pricing will return to traditional market conditions. That means insurers are pricing plans based on real-world claims data and risk-sharing rules, not artificial temporary buffers.
For beneficiaries, this means plan premiums could vary more than they did in 2025 and 2026. It also means shopping around during AEP is more important than ever. Plans that were priced artificially low during the demonstration may see increases, and plans that were overpriced may adjust down. The best way to protect yourself is to compare your current plan against alternatives before the enrollment window closes.
3. The $2,000 Out-of-Pocket Cap Is Here to Stay
The IRA introduced a $2,000 annual out-of-pocket cap on prescription drugs for Medicare Part D, and that cap is being codified into the rules for 2027 and beyond. For the first time in Medicare history, your annual drug spending is capped at $2,000. Once you hit that limit, you pay nothing for covered prescriptions for the rest of the year. Here is how the Part D out-of-pocket cap works and why it matters for your 2027 planning.
This is a game-changer for people with expensive prescriptions. Before the IRA, there was no out-of-pocket cap — once you moved past the coverage gap, you could pay thousands of dollars in the catastrophic phase. The new rules eliminate the coverage gap phase entirely and remove cost sharing for enrollees in the catastrophic phase.
If you are currently on a Part D plan, your out-of-pocket spending should be lower in 2027 than it was before the IRA. If you are on a Medicare Advantage plan with drug coverage, the same $2,000 cap applies. Check your current plan to make sure it reflects this change.
4. Star Ratings Are Being Streamlined
CMS is making changes to the Star Ratings system that helps beneficiaries compare the quality of Medicare Advantage and Part D plans. For 2027, CMS is removing 11 measures that focused on administrative processes and areas where there was little meaningful variation between plans. A new Depression Screening and Follow-Up measure is being added to address behavioral health gaps.
The Star Ratings are more than just a quality score. They affect plan ratings, Quality Bonus Payments, and rebates for MA contracts. Plans with higher Star Ratings often offer better benefits and lower costs. If you are comparing plans during AEP, the Star Ratings are one of the tools you should use — but they are not the only one. Always compare the full picture: premiums, out-of-pocket costs, prescription coverage, network of doctors and hospitals, and customer satisfaction.
5. The 2027 AEP Checklist: What to Do Before October 15
The Annual Enrollment Period runs from October 15 to December 7, 2026. This is the window to join, drop, or switch a Medicare Advantage plan or Part D prescription drug plan. Any changes you make during AEP take effect on January 1, 2027.
Here is a practical checklist to review before AEP opens:
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Review your Annual Notice of Change (ANOC). Your current plan sends this letter in late September or early October. It tells you what is changing for 2027 — premiums, copays, drug coverage, and network changes. Read it carefully. If something looks different from last year, that is the signal to compare your plan against alternatives. See our guide to reading your ANOC before December 7 for more details.
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Check the $2,000 cap on your plan. Make sure your Part D plan reflects the new out-of-pocket cap. If you are hitting the cap and still paying high costs, you may need to switch to a plan that covers your medications more effectively.
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Look at Part D premiums for 2027. The base beneficiary premium is $41.33, but your actual premium depends on the plan you select. Compare at least two or three plans during AEP to see which one offers the best value for your medications and budget.
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Verify your prescriptions are covered. Formularies — the list of drugs a plan covers — change every year. Even if your plan covered a medication in 2026, it may not cover it in 2027. Use the Medicare Plan Finder at medicare.gov to check.
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Check your network. If you have a Medicare Advantage plan, make sure your doctors, hospitals, and pharmacies are still in-network for 2027. Network changes are common, and a plan that was in-network this year may not be next year.
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Understand your out-of-pocket costs. The $2,000 cap helps, but premiums, deductibles, and copays still vary by plan. Compare the total cost, not just the premium. A plan with a low premium but high copays may cost you more over the year than a plan with a higher premium and lower out-of-pocket costs.
6. What Happens If You Miss AEP?
If you miss the Annual Enrollment Period, you are locked into your current plan for the full year unless you qualify for a special enrollment period. There are some exceptions — if you move, lose other coverage, or have certain life changes — but for most beneficiaries, missing AEP means you stay on your current plan until the next AEP.
The other enrollment periods to know:
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January 1 to March 31, 2027 (Open Enrollment Period): You can switch from a Medicare Advantage plan back to Original Medicare, or switch between Medicare Advantage plans. You can also add or drop a Part D plan.
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Special Enrollment Periods: These are available if you move, lose other coverage, or have certain life changes.
The point is: you have a window. It is not infinite. Make sure you use it.
7. Why Reviewing Your Coverage Matters
The 2027 Medicare changes are not just about numbers — they are about making sure your coverage actually works for you. A plan that was great in 2026 may not be the best option in 2027. Premiums change, networks shift, and drug formularies adjust. The only way to make sure you are not overpaying or underinsured is to review your coverage every year before AEP.
At Trek Insurance Solutions, we help beneficiaries navigate these changes. We work with multiple organizations offering a range of products in our active service areas, and we can help you compare plans and find the coverage that fits your needs and budget. Our goal is to make sure you understand your options and feel confident in your choice.
The 2027 Part D out-of-pocket cap is $2,000, and the base beneficiary premium is $41.33. These figures are based on CMS data released in 2026. If you have questions about your specific plan, contact a licensed agent at Trek Insurance Solutions.
TPMO Disclaimer
Trek Insurance Solutions is a Third-Party Marketing Organization (TPMO). 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.
For more information, visit us at trekis.net or call 888-960-0442.