2027 Medicare Updates: 8 Changes Retirees Need to Know
While the maximum out-of-pocket and deductible amounts for Part D are set, the full picture for 2027 isn’t quite complete yet. Now, all eyes turn to the fall, when the Centers for Medicare & Medicaid Services (CMS) officially releases the upcoming figures for standard Part B premiums, as well as the Part A and Part B deductibles. Keeping an eye out for those numbers — along with reviewing your plan’s Annual Notice of Change (ANOC) this October — will ensure you have every piece of the puzzle before open enrollment begins.
According to Fidelity, a 65-year-old retiring in 2026 can expect to spend an average of $185,500 on healthcare and medical expenses throughout retirement. That’s an increase of 7% or $13,000 over the 2025 estimate.
Are rising costs and evolving program coverage rules frustrating? Absolutely — that’s why we’ve waded through this year’s Medicare changes to help keep you informed and hopefully save you money.
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Here are eight Medicare changes to be aware of in 2027.
1. Stand-alone Part D drug plan options are shrinking
The landscape for stand-alone prescription drug plans (PDPs) continues to shrink. Five years ago, Medicare beneficiaries could pick from an average of 30 stand-alone plans; by 2026, that selection dropped to just 11. That represents a 22% drop in plan availability in a single year alone.
Because options are consolidating rapidly, enrollees can no longer rely on their current plan staying available — or remaining price-competitive — heading into next year. Be prepared to shop around.
CMS has a great tool that allows beneficiaries to compare drug plans that can be filtered by deductible, premium or premium + drug costs.
2. Part D premium subsidies end in 2027
The temporary federal support that lowered Part D premiums in 2025 and 2026 is officially ending. The federal government’s IRA premium stabilization demonstration — which lowered monthly premiums by an estimated $16 per person in 2026 — will not be extended to 2027.
CMS announced in July that this federal relief will conclude at the end of the year to transition Part D back to standard market conditions, clearing the way for potential premium increases in 2027.
For now, we are all in the dark about what type of rate increases will result from the discontinuation of the subsidy. “Without these extra subsidies in place for 2027, some Part D stand-alone drug plan enrollees could face a larger premium increase for drug coverage next year than in recent years, though plan-specific premium amounts are not yet known,” said Juliette Cubanski, vice president and director of the Program on Medicare Policy for KFF.
3. Medicare Part D deductible will go up
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Your deductible for your Medicare Part D insurance will depend on the plan you choose. Moreover, the deductible can vary, and you may not have to pay one at all. However, if you are subject to a Part D deductible, there is a maximum that no policy may exceed.
Annual deductible. If your plan has a deductible, you pay 100% of your gross covered prescription drug costs (GCPDC) until the deductible is met. For 2027, that maximum is $700, $75 more than the 2026 amount of $615.
You pay all out-of-pocket costs until you meet your plan’s full deductible. After that, you’ll pay 25% coinsurance for both generic and brand-name drugs. This continues until your total out-of-pocket spending on covered Part D drugs reaches the out-of-pocket maximum for 2027.
4. Maximum out-of-pocket for Part D expenses is going up
Beneficiaries pay 100% of prescription costs until they hit their deductible ($700 maximum), after which a flat 25% coinsurance rate applies until out-of-pocket spending reaches the statutory maximum for 2027.
In 2027, the cap on out-of-pocket prescription drug costs is $2,400, a $300 increase over the 2026 limit of $2,100. That means you’ll be liable for an additional $300 in drug costs over the year in 2027.
5. Medicare Advantage perks and hemp
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Federal law still strictly bans traditional medical marijuana across all Medicare plans, but federal regulators have established updated rules that allow access to select non-intoxicating hemp and CBD products.
While high-THC marijuana remains prohibited, Medicare Advantage plans can use updated guidelines for Special Supplemental Benefits for the Chronically Ill (SSBCI) to cover basic, federally legal hemp items. Plans can offer FDA-recognized “Generally Recognized as Safe” (GRAS) products, such as hulled hemp seeds, hemp protein powder and low-THC hemp seed oil.
6. Doctor-guided CBD pilot program
Medicare is also expanding testing doctor-prescribed CBD through CMS Innovation Center initiatives. Starting in 2027, the Long-term Enhanced ACO Design (LEAD) Model will be able to supply non-inhalable CBD directly to patients to help manage chronic pain or sleep issues.
You will not be able to access this benefit at a regular doctor’s office. The Substance Access Beneficiary Engagement Incentive (BEI) is a model-specific tool within Innovation Center models and is not available to all Medicare beneficiaries.
The CMS announced in an April 2026 press release that ACO REACH Models and the Enhancing Oncology Models (EOM) may furnish eligible hemp-derived products for up to $500 per year per eligible beneficiary, subject to model requirements and safeguards, as well as clinical determination. This was contingent on submission and approval of an implementation plan.
Note: The ACO REACH models will be ending at the close of 2026 and will be replaced by the new Long-term Enhanced ACO Design (LEAD) that comes online in 2027.
7. Medical telehealth coverage has been extended through 2027
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The use of telehealth appointments took on new significance during the pandemic. Previously reserved for patients in rural areas, it was expanded to all Medicare beneficiaries.
However, Medicare’s expanded telehealth benefits have since operated under a temporary safety net. Rather than making these broad virtual rules permanent, lawmakers have kept them alive through a patchwork of short-term legislative extensions to avoid a coverage cliff.
That cycle continues for the 2027 plan year. Under the Consolidated Appropriations Act of 2026, Congress extended core Medicare telehealth flexibilities through December 31, 2027. This extension gives beneficiaries and healthcare providers guaranteed stability for at least one year.
While permanent reform remains the ultimate goal for health systems and patient advocates, this latest legislative extension ensures virtual care remains fully accessible and reimbursable through the end of 2027.
8. Lower negotiated prices for some prescription drugs
Medicare Beneficiaries will save on these 15 medications starting in 2027. They were on the second list of prescription medications that should cost less due to negotiations under the Medicare Drug Price Negotiation Program.
Of course, how much you pay overall will also be impacted by the terms of your Part D policy.
|
Drug name |
Commonly treated conditions |
2027 Negotiated price for 30-day supply |
2024 Price for 30-day supply |
|
Ozempic; Rybelsus; Wegovy |
Type 2 diabetes; Type 2 diabetes and cardiovascular disease; Cardiovascular disease and obesity/ overweight |
$274, 71% savings |
$959 |
|
Trelegy Ellipta |
Asthma; Chronic obstructive pulmonary disease |
$175, 73% savings |
$654 |
|
Xtandi |
Prostate cancer |
$7,004, 48% savings |
$13,480 |
|
Pomalyst |
Kaposi sarcoma; Multiple myeloma |
$8,650, 60% savings |
$21,744 |
|
Ofev |
Idiopathic pulmonary fibrosis |
$6,350, 50% savings |
$12,622 |
|
Ibrance |
Breast cancer |
$7,871, 50% savings |
$15,741 |
|
Linzess |
Chronic idiopathic constipation; Irritable bowel syndrome with constipation |
$136, 75% savings |
$539 |
|
Calquence |
Chronic lymphocytic leukemia/small lymphocytic lymphoma; Mantle cell lymphoma |
$8,600, 40% savings |
$14,228 |
|
Austedo; Austedo XR |
Chorea in Huntington’s disease; Tardive dyskinesia |
$4,093, 38% savings |
$6,623 |
|
Breo Ellipta |
Asthma; Chronic obstructive pulmonary disease |
$67, 83% savings |
$397 |
|
Xifaxan |
Hepatic encephalopathy; Irritable bowel syndrome with diarrhea |
$1,000, 63% savings |
$2,696 |
|
Vraylar |
Bipolar I disorder; Major depressive disorder; Schizophrenia |
$770, 44% savings |
$1,376 |
|
Tradjenta |
Type 2 diabetes |
$78, 84% savings |
$488 |
|
Janumet; Janumet XR |
Type 2 diabetes |
$80, 85% savings |
$526 |
|
Otezla; Otezla XR |
Oral ulcers in Behçet’s Disease; Plaque psoriasis; Psoriatic arthritis |
$1,650. 65% savings |
$4,722 |
Prepare now to get the best Medicare coverage in 2027
Medicare open enrollment starts on October 15 and runs through December 7. In late October or early November, CMS will officially announce the updated Part B monthly premiums along with the Part A and Part B deductibles. Once those baseline numbers land, you’ll have the complete roadmap you need to compare coverage options and pick the best plan(s) for the coming year.
If you have a Medicare Part D or Medicare Advantage Plan, your ANOC is crucial. The information inside will help you decide whether to keep your current coverage or find a new plan for the coming year. Don’t make the mistake of keeping your plan on autopilot without reviewing it first.
