Medicare open enrollment for 2027 runs through December 7, giving the more than 70 million Americans covered by the program an opportunity to review and adjust their health insurance plans. Medicare primarily serves individuals aged 65 and older as well as certain younger people with disabilities. It operates through a combination of payroll taxes, beneficiary premiums, and federal funding, with costs including premiums, deductibles, and co-payments.
Medicare consists of several parts, each covering different healthcare services. Part A provides coverage for hospital stays, skilled nursing facilities, some home health care, and hospice. Most beneficiaries pay no premium for Part A, having contributed through payroll taxes while working, but there is a deductible of $1,736 per benefit period. Part B covers physician services, outpatient care, and preventive services, with a standard monthly premium of $202.90 and an annual deductible of $283.
Prescription drug coverage falls under Part D and is offered through private insurers. Premiums vary, with an average monthly cost of about $35.09 for stand-alone plans. Part C, commonly known as Medicare Advantage, offers an alternative to the Original Medicare Parts A and B combined with Part D. These private plans often require the use of network providers and prior approvals for certain services but typically include additional benefits such as vision, hearing, and dental coverage. The average monthly premium for Part C plans is a little over $14.
Beneficiaries may also purchase Medigap policies from private insurers, which help cover co-payments, deductibles, and coinsurance associated with Parts A and B. Some supplemental plans also provide coverage for services not included in Original Medicare, including certain emergency care outside the United States.
A key consideration for higher-income beneficiaries is the Income-Related Monthly Adjustment Amount (IRMAA), which imposes surcharges on Parts B and D premiums based on income. Approximately 8% of Part B recipients pay these additional fees. The surcharges start at $95.70 per month for individuals with a modified adjusted gross income (MAGI) exceeding $109,000 ($218,000 for married couples filing jointly) and can reach up to $578 per month for those with incomes above $500,000 ($750,000 for couples). IRMAA applies as a cliff rather than on a sliding scale, meaning that exceeding a threshold by even one dollar results in the higher premium for the entire year.
The government calculates IRMAA based on tax returns from two years prior, so 2025 income levels will determine 2027 premiums. Beneficiaries experiencing significant income changes due to retirement or other life events may request a reconsideration by submitting Form SSA-44 to the Social Security Administration.
For individuals under 65 who remain employed by organizations with at least 20 employees, workplace health insurance can generally continue without interruption. It is advisable to consult with employer benefits administrators prior to turning 65. Upon leaving such employment, individuals have an eight-month window to enroll in Part B without penalty.
As the Medicare enrollment period concludes, it is crucial for beneficiaries to carefully evaluate their options to ensure coverage aligns with their healthcare needs and financial circumstances.