Many seniors seeking Medicare coverage this fall will be in for an unpleasant surprise: Premiums for some Section D prescription drug plans will increase by $50 or more a month next year, adding at least $600 to the annual spending of those who maintain their current coverage.
Medicare’s annual open enrollment period began Thursday, giving users until Dec. 7 to shop around for better options before the new prices take effect in January.
For adults already struggling due to increased everyday expenses, these higher premiums could put even more pressure on their budgets. According to an NBC News poll conducted in September, inflation and the cost of living were the country’s top concerns heading into the November midterm elections.
“Everything is getting more expensive: not just health care, but also the cost of putting food on the table and filling the gas tank,” said Juliette Cubanski, deputy director of the Medicare policy program at KFF, a nonpartisan research group. “I think the cost increases we’re seeing in Medicare drug plans are generally in line with the increases we’re seeing in other spending.”
These higher costs may be surprising. The Centers for Medicare and Medicaid Services (CMS) has projected that monthly premiums for stand-alone Section D plans will increase by just $1 on average next year, going from $35 to $36. Stand-alone plans offer Section D coverage to people with traditional Medicare, unlike Medicare Advantage, which typically combines medical and drug coverage. (For Medicare Advantage plans, the average monthly premium is expected to decline more than 16% next year, to $12 a month, according to CMS.)
However, Cubanski noted that CMS’s $1 estimate masks much steeper increases for people enrolled in certain plans. “It appears that that estimate is based on the premise that people will switch to lower-cost plans; however, those who do not switch plans could face much larger premium increases by 2027,” he said.
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According to the KFF, in 2026 there are 24.9 million people with independent Section D coverage, which is 1.7 million more than the previous year and marks the third consecutive year of growth in enrollment.
Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tennessee, said research has shown that most people don’t change plans or look for other options once they’ve chosen a Section D plan.
A 2024 study published in Health Affairs Scholar found that about 83% of enrollees with stand-alone Section D coverage did not switch plans that year, a figure consistent with previous studies on switching rates. When analyzing the causes, researchers discovered that many people simply did not know how to make the change.
“Therefore, many people in the independent plan market will see prices increase,” Dusetzina said. “This makes the open enrollment period especially important this year, even for those who have been satisfied with their plan before.”
Who will see prices increase?
Some of the biggest increases in premiums come from plans offered by major insurers.
For example, according to a KFF analysis, monthly premiums for UnitedHealthcare’s AARP Medicare Rx Preferred plan will increase by at least $50 in every state and Washington, D.C., by 2027. Cubanski said there are about 2 million people enrolled in UnitedHealthcare plans under the AARP brand.
Another plan, Humana Premier Rx, will see increases of between $10 and $25 per month in 42 states and Washington, D.C.
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Other plans will experience more moderate changes. Wellcare Value Script premiums, for example, will go down or up by less than $10 a month, depending on the state.
The differences reflect, in part, how insurers set their own premiums based on the expected costs of prescription drugs, enrollment and other expenses for the coming year.
Miranda Yaver, associate professor of health policy and management at the University of Pittsburgh, said finding a cheaper plan isn’t always as simple as choosing one with a lower premium.
People should also consider whether their medications are covered by the plan and how much they will have to pay out of pocket for prescriptions.
“Low-premium plans may be convenient for those taking really affordable medications, but if the drugs you take involve high cost-sharing, those expenses will add up quickly,” he said. “Since seniors often have greater health needs, significant prescription drug use, and limited disposable income, choosing the right plan is critical.”
Even those who change plans may not avoid paying more next year, Yaver said.
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For the first time, there will be no stand-alone Section D plans with $0 monthly premiums for people who do not receive low-income subsidies. About 4 million people currently enrolled in stand-alone plans will have to start paying monthly premiums next year, even if they change plans, according to KFF data.
Eliminating $0 premiums for those who do not receive low-income subsidies “will make the changes in Part D more noticeable,” Yaver said.
a little relief
However, there is good news for seniors who will face an increase in premiums next year.
Social Security benefits are projected to increase 3.6% in 2027 — an average of an additional $75.15 per month — which could help offset some of the increase in premiums. This increase in profits is one of the largest in the decade.
Such an increase “could certainly help cushion the impact of some of the cost-of-living increases that people are facing,” Cubanski said.
For those who experience only a modest increase in Section D premiums next year, that “cost of living adjustment will not be negated,” Yaver said. Cubanski encouraged people to look into other Section D options, especially if cost is a major concern heading into next year.
“It really pays to compare options, even if you’re happy with the coverage you have,” Cubanski said.
