Medicare Stand-Alone Drug Plans Face Premium Hikes Amid Mixed Messages on Prescription Costs

Millions of Medicare beneficiaries enrolled in standalone prescription drug plans will see their average monthly premiums increase by approximately 50% in 2027, according to a new analysis by the Kaiser Family Foundation (KFF).

The projected rise would bump the national average from $34 to $51 per month. However, enrollees can mitigate this increase by switching to lower-cost plans during the open enrollment period, which runs through December 7.

Robert Travis Scott of Abingdon, Virginia, took advantage of this opportunity in late October after receiving notice that his AARP-UnitedHealthcare Medicare drug plan would increase from $39.60 to $121.90 monthly in 2027. By researching options online, Scott identified a Humana plan costing $19.30 with comparable coverage, saving him an estimated $1,000 annually.

“I’m quite happy with the change,” Scott said. He expressed concern that other seniors might overlook the opportunity to shop for better rates, noting the dramatic increase in his current plan. “The stakes are higher this year for people with Medicare stand-alone drug coverage if they sit on the sidelines during open enrollment,” said Juliette Cubanski, a KFF vice president and director of the Program on Medicare Policy.

Rising prescription drug costs have become a contentious issue in the lead-up to November’s midterm elections. President Donald Trump has claimed success in negotiating lower pharmaceutical prices, asserting at a recent Ohio rally that the U.S. now has “the lowest drug prices anywhere in the world.” Critics argue this claim lacks substantiation compared to other developed nations.

How much beneficiaries actually pay varies significantly based on their medications and insurance coverage. In contrast, Medicare Advantage plan enrollees—who comprise over half of all Medicare beneficiaries—will face much smaller premium increases, averaging $9 monthly or less than a $2 rise, according to KFF.

Additionally, stand-alone plan deductibles will rise from $540 to $643 in 2027, while Medicare Advantage plan deductibles increase from $360 to $489. Most enrollees will also pay coinsurance rather than copayments, leading to less predictable out-of-pocket expenses.

KFF attributes the projected premium hikes partly to the Centers for Medicare & Medicaid Services (CMS) ending early a three-year subsidy program for stand-alone plans in 2025 and 2026. CMS Administrator Mehmet Oz previously criticized the program as an “insurance industry bailout.” KFF’s analysis differs from CMS’s projection of a $1 average premium increase, citing CMS’s failure to explain its methodology. The organization notes that CMS may have assumed beneficiaries would switch to lower-cost plans.

About 10.4 million stand-alone plan enrollees without low-income subsidies—equivalent to 76% of this population—will face higher premiums in 2027 if they retain their current plans, KFF found. This includes 4.1 million in zero-premium plans, who will automatically pay more since no such plans will exist next year.

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