Medicare Advantage Withdrawals Meet a Higher Part D Cap as Open Enrollment Runs to Dec. 7

Since open enrollment began Oct. 15, millions of Medicare beneficiaries have been weighing 2027 coverage at a time when some Medicare Advantage insurers are fully withdrawing plans from particular areas and scaling back benefits. The window closes Dec. 7, and whatever people choose takes effect Jan. 1.

The Part D drug benefit is where the largest changes for 2027 land.

Part D costs go up

The annual out-of-pocket cap on covered Part D drugs rises from $2,100 in 2026 to $2,400 in 2027. The standard deductible climbs from $615 to $700. Individual plans may charge a lower deductible.

That is roughly a 14% increase on both numbers. Once a beneficiary hits the cap, they generally pay nothing more for covered Part D drugs for the rest of the year.

The Centers for Medicare & Medicaid Services is also ending the Part D Premium Stabilization Demonstration at the end of the year. The temporary program was launched under the Biden administration in 2024 to offset premium effects tied to the 2022 Inflation Reduction Act. CMS says Part D insurers now have enough experience under the redesigned benefit to set their bids, so the agency is returning to "traditional market conditions."

CMS projects only modest premium increases for most people. It estimates that average monthly premiums for stand-alone Part D plans will rise by less than $1, though individual plans may change by much more. CMS did not respond to an Associated Press request for comment.

Negotiated prices arrive for 15 more drugs

New Medicare-negotiated prices take effect Jan. 1 for 15 drugs under the 2022 law. They include the weight-loss and diabetes drugs Ozempic, Rybelsus and Wegovy.

The list also covers Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo/Austedo XR, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet/Janumet XR and Otezla. CMS expects the change to lower costs for people enrolled in Medicare by $685 million in 2027.

Medicare Advantage: lower average premiums, shifting availability

CMS projects that average monthly Medicare Advantage premiums will fall about 16.5%, from $14.37 in 2026 to $12 in 2027. Premiums and other costs vary considerably by plan and location, so an average says little about any one household.

Plans can also rewrite provider networks, drug formularies and cost-sharing every year. Staying with the same plan does not guarantee the same coverage. For people whose insurer has pulled out of their area, the decision is forced.

The COLA and the squeeze

The Social Security Administration announced on the Wednesday before open enrollment began that the 2027 cost-of-living adjustment will be 3.6%. That works out to about $75 more per month for the nearly 72 million people who receive monthly Social Security benefits, and for about 7.3 million Supplemental Security Income recipients.

Some analysts argue the Part D changes will eat into that raise. Kevin Thompson, CEO of 9i Capital Group, told Newsweek that the 14% jump in the out-of-pocket cap and the 14% jump in the deductible "will wipe away some of the purchasing power seniors receive from their 3.6 percent Social Security COLA." He added that as temporary subsidies expire, some seniors may see premiums "tick up a bit."

AARP's Nancy LeaMond, its executive vice president and chief advocacy officer, said in a statement that "higher healthcare costs are making it harder for older Americans to afford the care they need."

The arithmetic cuts both ways. The $75 monthly COLA is $900 a year, while the cap increase is $300. But the cap only matters to people with high drug spending, and premiums, deductibles and plan changes hit everyone differently.

The timing is politically loaded. Voters have consistently ranked cost of living as a top concern, and the midterm elections are weeks away. The subsidy ending falls on the Trump administration's watch, while the negotiated drug prices come from the Biden-era law.

What beneficiaries can do before Dec. 7

Medicare.gov publishes plan-level detail on networks, formularies, star ratings and costs. Federally funded counselors will review a person's medications, doctors and income at no charge. Consumer Reports has flagged four pressure points: doctor networks, drug formularies, out-of-pocket ceilings and the income-based surcharge that catches higher earners off guard.

Beneficiaries who do nothing keep their current plan, whatever changes the insurer has made. Anyone whose plan is leaving their area must pick a replacement by Dec. 7 for coverage to begin Jan. 1.