Every fall, people with Medicare get a window to review their coverage and switch plans. For 2027, that window runs from October 15 through December 7, 2026 [1]. Federal officials are promoting lower average premiums in Medicare Advantage, but analysts warn that people in traditional Medicare who buy separate drug coverage face a shrinking set of choices and the end of a subsidy that had held their premiums down [1][2].
Two kinds of Medicare
Understanding this year's changes requires a quick refresher. People with Medicare generally choose between two paths. Traditional, or "original," Medicare is run directly by the federal government and covers hospital and doctor services. Most people on traditional Medicare add a stand-alone prescription drug plan, known as a Part D plan, sold by a private insurer. The second path is Medicare Advantage, in which private insurers provide all Medicare benefits in a single plan, usually including drug coverage and often extras such as dental or vision benefits [2].
Medicare Advantage: lower premiums on average
On September 28, 2026, the Centers for Medicare & Medicaid Services (CMS) projected that the average monthly Medicare Advantage premium will fall from $14.37 in 2026 to $12.00 in 2027, a decline of 16.5% [1][3][4]. For Medicare Advantage plans that include drug coverage, the average Part D portion of the premium is projected to fall 38%, from $11.32 to $7, after rebates [1][2]. CMS expects about 34 million people, roughly 47.4% of everyone with Medicare, to be enrolled in Medicare Advantage in 2027 [1]. The number of plans is essentially flat, at about 5,532 nationwide compared with 5,553 this year. More than 99% of beneficiaries will have access to at least one Medicare Advantage plan, and 97% will have 10 or more to choose from [1]. CMS says about eight in 10 Medicare Advantage enrollees can stay in their current plan at the same or a lower premium [1]. "CMS is fighting to keep high-quality care options affordable and accessible," CMS Administrator Dr. Mehmet Oz said [1].
Stand-alone drug plans: fewer choices, no more $0 options
The picture is less rosy for the roughly half of beneficiaries in traditional Medicare who rely on stand-alone drug plans. CMS projects that the average stand-alone Part D premium will rise by less than $1 a month, from $35.09 to $36 [1]. But an analysis of CMS data by KFF, summarized by AARP, found that stand-alone coverage will be harder to find and more expensive for millions of people [2]. The number of stand-alone Part D plans is expected to drop by about 13%, from 360 to 312 [2]. And for the first time in years, no stand-alone plans with a $0 monthly premium will be available to enrollees who do not receive the Extra Help low-income subsidy. In 2026, 28% of those enrollees were in a $0-premium plan [2]. Part of the reason is the end of a temporary subsidy. In 2024, CMS created a three-year "Part D Premium Stabilization Demonstration" that paid extra money to stand-alone plans to soften the impact of the drug benefit's redesign under the 2022 Inflation Reduction Act. The program paid about $9.8 billion to plans in 2025 and 2026. In July, CMS decided to end it after two years instead of three [1][2]. KFF and others have warned that ending the subsidy could push stand-alone premiums higher, while Oz has described the payments as an insurer bailout [2].
The out-of-pocket cap rises
One of the biggest changes to Medicare in years took effect in 2025: a cap on how much people pay out of pocket for covered prescription drugs each year. That cap was $2,000 in 2025 and $2,100 in 2026, and it will rise to $2,400 in 2027 because it is indexed to growth in drug costs [2]. Before 2025, there was no annual limit, and people taking expensive cancer or specialty drugs could face bills of many thousands of dollars. The cap applies to everyone with Part D coverage, whether through a stand-alone plan or a Medicare Advantage plan [2]. People can also spread their costs out over the year through the Medicare Prescription Payment Plan rather than paying large amounts at the pharmacy at the start of the year.
The bigger debate over Medicare Advantage
The premium numbers are only part of a long-running policy debate. Supporters of Medicare Advantage point to its popularity, the extra benefits many plans offer and the lower premiums CMS is projecting. Critics, including many health economists, argue that the government pays private plans more per enrollee than it would cost to cover the same people in traditional Medicare, partly because of how plans document patients' health conditions, and that plans' use of prior authorization can delay care. Those concerns have shaped recent CMS payment and oversight decisions, and they help explain why policymakers watch enrollment shifts so closely.
What beneficiaries should do
CMS and consumer advocates offer consistent advice: do not assume this year's plan is still the best choice. "We urge beneficiaries to use Open Enrollment as an opportunity to review their coverage," Oz said [1]. Plans can change their premiums, deductibles, list of covered drugs and network of doctors from year to year. People in stand-alone drug plans should be especially careful, since some plans are leaving the market and the lowest-cost options are changing. Free help is available through 1-800-MEDICARE, the Medicare Plan Finder at Medicare.gov and State Health Insurance Assistance Programs [1].
Low-income help
People with limited income and savings may qualify for Extra Help, a federal program that lowers Part D premiums and drug costs. For 2027, the change matters even more, because enrollees who do not receive Extra Help will no longer find any $0-premium stand-alone drug plans [2]. CMS says 88% of non-low-income beneficiaries can find a basic Part D plan for $10.30 a month or less and 93% can find an enhanced plan for under $6, mostly within Medicare Advantage [1].
Why it matters
Medicare covers more than one in six Americans, and the choices made during these eight weeks shape what millions of people pay for care in 2027. This year's numbers show a program moving in two directions at once: Medicare Advantage is becoming cheaper on average and continues to grow, while traditional Medicare enrollees face fewer drug plan choices and higher costs at the low end of the market. How beneficiaries respond may push even more people toward private plans.
Sources
- 1. "Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2027," CMS press release, September 28, 2026. https://www.cms.gov/newsroom/press-releases/medicare-advantage-m edicare-prescription-drug-programs-expected-remain-stable-2027
- 2. Tony Pugh, "Premiums for Medicare Part D Stand-Alone Drug Plans to Rise for Some, Fall for Others in 2027," AARP, September 29, 2026. https://www.aarp.org/medicare/medicare-part-d-premiums-2027/
- 3. "CMS projects 16.5% drop in 2027 Medicare Advantage premiums," American Journal of Managed Care, September 30, 2026. https://www.ajmc.com/view/cms-projects-16-5-drop-in-2027-medicare-advantage-premiums
- 4. "CMS projects Medicare Advantage premiums to decline by 16% in 2027," Fierce Healthcare, September 2026. https://www.fiercehealthcare.com/payers/cms-projects-medicare-advantage-premiums-decline-16-2027 Information in this article is current as of October 10, 2026. Bracketed numbers refer to the sources listed above.