Medicare Changes in 2027: Part B Costs and Medicare Advantage Updates

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Medicare Part B costs are projected to go up in 2027. The Medicare Board of Trustees estimates the standard monthly Part B premium at $209.50, which is $6.60 more than the 2026 rate, and the annual Part B deductible at $292, up $9 from $283. These are projections; CMS sets the official 2027 figures in the fall. Your total Medicare bill also depends on your drug coverage and on whether your Medicare Advantage plan is changing. Part D enrollees face a higher out-of-pocket cap and the end of a premium subsidy. Some Medicare Advantage plans will not be renewed at all.

Part B premium and deductible for 2027

Nearly everyone with Medicare pays the Part B premium, including people enrolled in Medicare Advantage. A private plan changes how your benefits are delivered, not the premium.

At the projected $292 deductible, someone who uses outpatient care pays $9 more out of pocket than in 2026 before Medicare starts paying its share. After that, traditional Medicare generally pays 80% of approved amounts and you pay the remaining 20% coinsurance, unless a supplemental policy covers it.

Higher-income surcharges

Beneficiaries with higher incomes pay more than the standard premium through the income-related monthly adjustment amount (IRMAA). For 2026, the surcharge applies when modified adjusted gross income is above $109,000 for single filers or $218,000 for joint filers. Medicare uses your tax return from two years earlier, so 2027 premiums will look back to 2025 income. The brackets are adjusted for inflation each year, and the 2027 thresholds will come with the official cost announcement.

The two-year lookback matters for planning. A one-time income spike, such as a large IRA withdrawal or the sale of an appreciated asset, can raise Part B and Part D premiums two years later. Qualified distributions under the Roth IRA withdrawal rules are not counted in that income.

Lower-income beneficiaries may qualify for help. State Medicare Savings Programs can pay the Part B premium for people who meet income and asset limits.

How the increase hits a Social Security check

Most Medicare beneficiaries also collect Social Security, and the Part B premium is usually deducted straight from the monthly benefit. That means the premium increase and the cost-of-living adjustment (COLA) land in the same check. The Senior Citizens League, an advocacy group, has projected a 2027 COLA of 3.6%, about $70 a month for the average retiree, compared with 2.8% for 2026. The official COLA is announced in October.

Hypothetical example (assumptions: standard Part B premium, no IRMAA, Part B deducted from Social Security, the projected 3.6% COLA):

• Monthly Social Security benefit before the COLA: $2,000
• COLA increase at 3.6%: $72.00
• Part B premium increase: $6.60
• Net change in the deposited check: $72.00 minus $6.60 = $65.40 more per month

A long-standing “hold harmless” rule also protects most people whose premium is deducted from Social Security: their Part B premium increase cannot exceed the dollar increase in their benefit. With the projected COLA far above the premium increase, the rule would not come into play in this example. It does not protect people who pay IRMAA or who are new to Medicare.

Part D: a higher cap and the end of a premium subsidy

Part D prescription drug coverage comes as a stand-alone plan alongside traditional Medicare or bundled into a Medicare Advantage plan. You pay a monthly premium and a share of drug costs until you reach the annual out-of-pocket cap. After that, the plan covers the rest of your covered drug costs for the year.

Out-of-pocket cap rises to $2,400

The Part D cap increases from $2,100 in 2026 to $2,400 in 2027. It applies to your cost sharing on covered drugs (deductibles, copays and coinsurance), not to your monthly premiums. For someone with expensive prescriptions who hits the cap every year, the change means up to $300 more in cost sharing before the plan picks up everything, plus premiums. Someone with low drug spending who never reaches the cap is not affected by the change itself.

Base premium and the subsidy phase-out

CMS set the 2027 Part D base beneficiary premium at $41.33, $2.34 higher than this year. It is a benchmark used in Medicare’s premium calculations, not what any particular plan charges, and actual plan premiums vary widely.

The bigger change for stand-alone drug plans is the end of the Part D premium stabilization demonstration. This Biden-era program paid insurers to hold down stand-alone plan premiums while they adjusted to the Inflation Reduction Act’s redesign of Part D. CMS is ending it two years earlier than planned. CMS Administrator Mehmet Oz said most premiums will rise by less than $10. Independent estimates show what the subsidy has been worth:

• The Medicare Payment Advisory Commission (MedPAC), a nonpartisan panel that advises Congress, estimates the subsidy saved beneficiaries an average of $16 a month this year.
• The Government Accountability Office, reviewing the program’s first year, found that without the subsidy, enrollees who stayed in the same plan from 2024 to 2025 would have seen their premiums double.

Medicare Advantage changes for 2027

Medicare Advantage plans are sold by private insurers and can change benefits, premiums, drug lists and provider networks from year to year.

The most consequential 2027 change for some enrollees is a plan disappearing entirely. Humana has announced it will not renew plans covering about 600,000 beneficiaries in 2027. Other insurers are also trimming coverage. If your plan is not renewed, the insurer notifies you, and you will need to choose a new Medicare Advantage plan or return to traditional Medicare with a drug plan.

Even when a plan continues, its terms can shift. Researchers at Georgetown University’s Medicare Policy Initiative advise checking that supplemental benefits still meet your needs and calling doctors’ offices directly to confirm they will remain in network in 2027, rather than relying only on a directory.

Negotiated prices take effect for 19 brands

The Inflation Reduction Act directed CMS to negotiate prices with drug manufacturers for some of Medicare’s highest-cost drugs. Negotiated prices for the first 10 drugs took effect in 2026. The second round, covering 19 brand-name products, takes effect in January 2027:

• Ozempic, Rybelsus, Wegovy: GLP-1 drugs
• Trelegy Ellipta, Breo Ellipta: inhalers for asthma and chronic obstructive pulmonary disease
• Xtandi: advanced prostate cancer
• Pomalyst: multiple myeloma and Kaposi sarcoma
• Ibrance: advanced or metastatic breast cancer
• Ofev: scar tissue buildup in certain chronic lung diseases
• Linzess: irritable bowel syndrome with constipation
• Calquence: mantle cell lymphoma
• Austedo, Austedo XR: tardive dyskinesia and Huntington’s disease chorea
• Tradjenta, Janumet, Janumet XR: type 2 diabetes
• Xifaxan: hepatic encephalopathy recurrence and irritable bowel syndrome with diarrhea
• Vraylar: major depressive disorder
• Otezla: plaque psoriasis, psoriatic arthritis and oral ulcers

The negotiated price is what Medicare pays for the drug. What you pay at the pharmacy still depends on your plan’s cost-sharing structure and where you are relative to the deductible and the $2,400 cap.

The GLP-1 Bridge continues through 2027

Medicare now covers three weight-loss drugs, Wegovy, the Zepbound KwikPen and Foundayo, for a flat $50 a month for eligible beneficiaries. The pilot, called the GLP-1 Bridge, began in July and runs through the end of 2027. CMS has not said what will follow it. Without coverage, these drugs typically list for $1,000 or more a month.

To qualify, you must have Medicare Part D and meet one of these conditions:

• A body mass index (BMI) of 35 or higher, or
• A BMI of 30 to 34.9 with a heart condition, a previous heart attack or stroke, peripheral artery disease, or high blood pressure.

Two limits are easy to miss:

1. The $50 copay does not count toward the annual Part D out-of-pocket cap.
2. If your GLP-1 is already covered under your Part D plan, for example for type 2 diabetes, you cannot switch to the $50 price. You stay in your plan’s coverage, and that cost sharing can be higher than $50 a month.

Key dates and what to review

The main 2027 decisions follow a fixed calendar:

1. By the end of September: Medicare Advantage and Part D plans mail the Annual Notice of Change. It lists your plan’s 2027 premium, deductible, copays, drug list and network changes compared with 2026.
2. Mid-to-late September: CMS releases official Part D premium information.
3. October: The Social Security COLA is announced.
4. Fall: CMS publishes the official Part B premium, deductible and IRMAA brackets.
5. October 15 to December 7: During open enrollment you can switch from traditional Medicare to Medicare Advantage or back, change Medicare Advantage plans, and join, switch or drop a Part D plan. Changes take effect January 1.

With the Part D subsidy ending, the cap rising and insurers pulling back some Medicare Advantage offerings, read your ANOC line by line this year, especially the premium, the drug formulary and the provider network. Free counselors at your State Health Insurance Assistance Program (SHIP) and licensed brokers can help you compare plans.

FAQs

The Bottom Line

People on Medicare face higher Part B costs, a larger Part D cap and the end of a drug plan premium subsidy in 2027, while some Medicare Advantage enrollees will lose their plans. Read your Annual Notice of Change closely when it arrives by the end of September. Then use open enrollment, October 15 to December 7, to compare premiums, drug lists and networks, with free help from your SHIP counselor if needed.