In 2027 my Part D premium will increase from $72.30 to $130.00 and my deductible will increase from $615 to $700 per year (the maximum allowed).
The main reason for larger premium increases (especially for stand-alone Part D plans) in 2027 is the end of a temporary federal subsidy program that had held premiums down in 2025–2026, combined with ongoing higher costs for plans under the Inflation Reduction Act’s (IRA) redesign of Part D benefits.
CMS ended the voluntary Part D Premium Stabilization Demonstration after 2026 (it was first implemented for 2025 under the prior administration). This temporary program provided extra federal payments to insurers offering stand-alone prescription drug plans (PDPs) to limit premium volatility and sharp increases while plans adjusted to major IRA changes.
• It reduced average stand-alone PDP premiums by roughly $16 per month in 2026 (and more in 2025), at a multi-billion-dollar cost to the government.
• CMS stated that plans now have enough experience with the redesigned benefit to set prices without the extra subsidy, returning the market to “normal” conditions. Officials described the prior subsidies as unnecessary handouts to insurers.
• This primarily affects stand-alone PDPs (not drug coverage inside most Medicare Advantage plans, which can use rebates differently). Roughly 25 million people are in stand-alone plans.
CMS projects the average monthly premium for stand-alone PDPs will rise only modestly (less than $1, from about $35 to $36). However, individual plan premiums will vary—some enrollees may see increases of $10 or more (with earlier analyses suggesting a portion could face $11–$20 increases), while others stay flat or drop. Many still have access to low-premium options.
This is how the administration reduces spending while looking out for its citizens, in this case seniors. Is this what you voted for? There was not a “handout to insurers.” It was premium support for Medicare beneficiaries. And now costs will be shifted to them.
Higher Underlying Costs from the IRA Benefit Redesign
The IRA (2022) made major changes that shifted costs onto plans:
• It eliminated the coverage gap (“donut hole”) and created a hard annual out-of-pocket cap ($2,000 in 2025, rising with inflation to $2,100 in 2026 and $2,400 in 2027). After the cap, beneficiaries pay $0 for covered drugs.
• Plans (not just Medicare/reinsurance) now bear more of the catastrophic-phase costs.
• This drove plan bids sharply higher. The national average monthly bid amount (NAMBA—an enrollment-weighted average of what plans bid to provide the basic benefit) rose about 24% to $296.05 for 2027 (continuing multi-year increases; it was only ~$35 pre-IRA).
These higher projected costs are the root pressure. Without the temporary demonstration subsidy, more of that pressure flows through to premiums for some plans.
