Medicare beneficiaries face notable changes as the annual fall enrollment period, which began on October 15 and runs through December 7, ushers in significant adjustments to prescription drug and Medicare Advantage plans for 2027.
Prescription drug plans, known as Part D, are experiencing shifts largely tied to legislation implemented under the Biden administration that introduced an annual out-of-pocket cap of $2,400 on drug spending. While this cap protects beneficiaries from excessive costs, it has prompted insurance providers to raise premiums and deductibles in response. The maximum deductible will increase to $700 next year, up from $615 in 2026. A temporary subsidy program designed to offset premium hikes was eliminated by the Trump administration for 2027, raising concerns about affordability for certain enrollees.
Although many beneficiaries may see minor or no increases in premiums if they maintain their current plans, some face substantial cost jumps. Notably, United Healthcare’s AARP-branded plans, which cover over two million people, are raising monthly premiums by $50 or more nationwide, with 37 states seeing increases exceeding $75. Additionally, zero-premium drug plans, which helped about four million seniors this year, are largely disappearing or may require a nominal monthly cost. Changes in covered medications and cost-sharing terms could also affect access to drugs within these plans.
The Medicare Advantage market is also undergoing disruption. Approximately five million beneficiaries—about 14 percent of enrollees—will need to find new coverage due to plan cancellations, with some rural counties left without any available options. In addition to fewer plan choices, many Medicare Advantage plans will reduce supplemental benefits such as dental, vision, and hearing care, while out-of-pocket limits are expected to climb. Surveys indicate a decline in overall satisfaction with Medicare Advantage plans over the past two years, a trend attributed in part to federal payment cuts that have influenced premiums and benefits.
Beneficiaries considering a switch from Medicare Advantage to traditional Medicare during this period should exercise caution. Unlike Medicare Advantage, traditional Medicare does not include an out-of-pocket maximum, and most beneficiaries rely on supplemental Medigap policies to cover remaining costs. The optimal time to purchase Medigap is during the six-month window following initial enrollment in Medicare Part B, when insurers cannot deny coverage or charge higher premiums due to pre-existing conditions. Outside this period, many states allow insurers to limit access or adjust premiums, with exceptions limited to Connecticut, Maine, Massachusetts, and New York.
A guaranteed right to buy a Medigap plan exists for those forced to leave Medicare Advantage plans canceled for 2027, ensuring they can transition to traditional Medicare with supplemental coverage.
Coverage of GLP-1 drugs, including the weight management drug Wegovy, will also grow more complex next year. Medicare's GLP-1 Bridge pilot program, separate from Part D, continues throughout 2027, covering certain GLP-1 medications for obesity with a fixed $50 monthly copayment that does not count toward Part D deductibles. Meanwhile, all Part D plans will be required to cover Wegovy for cardiovascular conditions, though details on co-pays and coverage tiers remain forthcoming. Beneficiaries currently filling GLP-1 prescriptions through Part D are not eligible for the Bridge program, adding to the complexity of treatment access.
To navigate these changes, beneficiaries are advised to review their Annual Notice of Change documents from providers and utilize the federal Medicare Plan Finder, which now allows users to search for plans by licensed healthcare providers beyond just doctors. State Health Insurance Assistance Programs also offer free, unbiased counseling to help individuals compare and choose plans that best suit their needs. Insurance brokers may provide assistance but might not represent all available plans and can have incentive structures favoring certain products.
Given the breadth of changes and potential cost impacts, experts emphasize the importance of reviewing and comparing plans carefully during the enrollment window to avoid unexpected expenses or loss of coverage.