Medicare drug premiums jump 50% next year
Average stand-alone plan costs will rise from $34 to $51, but shoppers can find cheaper alternatives during open enrollment.
By Ethan Cooper ·
The cost of stand-alone prescription drug coverage for Medicare beneficiaries will surge by 50 percent in 2027. A new analysis by the Kaiser Family Foundation, or KFF, projects the average monthly premium will climb from $34 in the current year to $51 next year. This sharp increase affects nearly 25 million people who rely on these specific plans for their medication coverage.
Robert Travis Scott, a resident of Abingdon, Virginia, experienced this hike firsthand in late October. His AARP-UnitedHealthcare plan notified him that his monthly bill would rise from $39.60 to $121.90. Scott responded by comparing options online and switched to a Humana plan with similar benefits for $19.30 a month. He estimated this switch saved him approximately $1,000 for the coming year.
"Yes, I am quite happy about that," Scott said regarding his new coverage. He expressed concern that other seniors might miss the opportunity to reduce their costs if they fail to compare plans. Juliette Cubanski, a vice president at KFF, warned that the stakes are higher this year for those who do not shop around during the open enrollment period, which remains open until December 7.
The premium spike contrasts with claims by President Donald Trump, who said his administration has negotiated lower drug prices. At a campaign rally in Ohio on October 28, Trump stated, "We have the lowest drug prices anywhere in the world." He cited the administration's work in the pharmaceutical sector as a key victory ahead of the November midterms, though individual costs vary widely based on specific medications and insurance details.
Medicare Advantage enrollees face a different financial reality. Those who bundle their health and drug coverage through private Medicare Advantage plans will see a smaller increase. KFF data shows the average drug cost component within these plans will be $9 in 2027, an increase of less than two dollars per month. More than half of Medicare beneficiaries use these integrated plans, which serve about 31 million people.
Out-of-pocket costs will also shift for most beneficiaries. In 2027, the average deductible for stand-alone plans will reach $643, up from $540 in 2026. For Medicare Advantage plans, the average deductible will rise from $360 to $489. Additionally, most enrollees will switch from fixed copayments to coinsurance, meaning they will pay a percentage of the drug cost rather than a set fee.
KFF attributes part of the stand-alone premium jump to a decision by the Centers for Medicare & Medicaid Services. The agency ended a three-year pilot program in July, which had provided subsidies to keep premiums down in 2025 and 2026. CMS Administrator Mehmet Oz labeled the program an insurance industry bailout. KFF noted its projections differ from CMS estimates, which suggested a smaller national average increase from $35 to $36.
