At a Glance

• The temporary Part D premium subsidy ends after 2026
• Some stand-alone Part D premiums may increase in 2027
• Your $2,400 annual out-of-pocket cap for covered drugs (2027) in not going away
• Review your drug plan during Annual Enrollment (October 15-December 7)

Medicare Part D Premium Stabilization Program Is Ending: What It Means for You in 2027

The Centers for Medicare & Medicaid Services (CMS) recently announced that the temporary Part D Premium Stabilization Demonstration will end after the 2026 plan year. If you’re enrolled in a stand-alone Medicare Part D prescription drug plan, you may be wondering how this could affect your costs.

Here’s what you need to know.

Why Was This Program Created?

Beginning in 2025, Medicare made significant changes to the Part D prescription drug benefit, including the new annual cap on out-of-pocket prescription drug costs.

Because these changes also shifted more financial responsibility to insurance companies, CMS created a temporary premium stabilization program to help keep stand-alone Part D premiums from increasing too quickly while insurers adjusted to the new rules.

What’s Changing?

CMS has announced that this temporary financial support will end after the 2026 plan year. Agency officials believe insurance companies have now had enough time to adjust to the redesigned Part D benefit and can price their plans without additional government assistance.

Will Your Premium Go Up?

Possibly—but it’s too early to know by how much.

Some Medicare beneficiaries may see higher monthly premiums for their stand-alone Part D plans in 2027, while others could see only small changes or even lower premiums depending on the plan they choose. CMS has stated that most beneficiaries are expected to see premium changes of less than $10 per month, but final plan premiums won’t be released until September.

The Good News

Although premiums may change, several important Medicare prescription drug protections remain in place:

• The annual out-of-pocket spending cap for covered prescription drugs continues.
• Medicare beneficiaries will still be able to compare Part D plans during the Annual Enrollment Period (October 15–December 7).
• You can switch to a plan that better fits your medications and budget if another option offers better value.

What Should You Do?

There’s no need to panic or make any changes today.

Instead, plan to review your Medicare prescription drug coverage this fall when 2027 plan information becomes available. Premiums, formularies, pharmacy networks, and out-of-pocket costs can all change from year to year, making it worthwhile to compare your options during the Annual Enrollment Period.

Bottom Line

The end of the Part D Premium Stabilization Program doesn’t mean every Medicare beneficiary will see a large premium increase. It simply means the temporary government support used to help smooth the transition to Medicare’s redesigned prescription drug benefit is ending.

As always, the best plan is the one that covers your medications at the lowest overall cost—not necessarily the one with the lowest monthly premium.

If you’d like help reviewing your prescription drug coverage during Annual Enrollment, I’d be happy to help you compare your options and make sure you’re enrolled in a plan that continues to meet your needs.

We don’t offer every plan available in your area. Any information provided is limited to those plans we do offer. Please contact Medicare.gov, 1-800-MEDICARE, or your State Health Insurance Program to get information on all of your options.