The Subsidy That Was Holding Premiums Down Is Ending
The Part D Premium Stabilization Demonstration was a temporary program that ran in 2025 and 2026 to cushion standalone prescription drug plan premiums while the Inflation Reduction Act redesign of the Part D benefit took effect. It did two things. It reduced the national base beneficiary premium, by $15 per member per month in 2025 and by $10 per member per month in 2026, and it capped how much any single plan could raise its monthly premium year over year, at $35 in 2025 and $50 in 2026. Those two levers had a real effect. Using MedPAC figures, KFF reports that the demonstration reduced the average monthly standalone drug plan premium by $26 in 2025 and by $16 in 2026. The program cost $9.8 billion across the two years. On July 28, 2026, CMS announced that the demonstration will end on December 31, 2026, a year earlier than originally planned. CMS said the subsidy is no longer needed because plan sponsors now have enough experience with the redesigned benefit to price their bids accurately. Whatever the reasoning, the practical result for 2027 is that both the premium reduction and the cap on year over year increases disappear at the same time.
How Much More Will You Actually Pay?
Three numbers are known and one is not. Known: the base beneficiary premium rises from $38.99 in 2026 to $41.33 in 2027, an increase of about 6 percent. Known: the standard Part D deductible rises from $615 to $700, and the annual out of pocket cap on covered drugs rises from $2,100 to $2,400. CMS finalized the deductible and the cap in its Contract Year 2027 Rate Announcement on April 6, 2026. Not known: your premium. The widely quoted figure, an increase of less than $10 a month for most people, comes from a July 28, 2026 post on X by CMS Administrator Mehmet Oz, not from a CMS fact sheet or press release, as FactCheck.org traced in August 2026. A CMS spokesperson later put it more narrowly to FactCheck.org: among the roughly one quarter of beneficiaries in plans the demonstration affected, over 85 percent will have access to a Part D plan that is either lower cost or up by less than $10, and everyone will have access to at least three drug plans with total premiums of $50 or less. That describes what will be on the market where you live, not the change on your own plan. In its July 28, 2026 fact sheet, CMS said it will release the 2027 plan landscape, with actual premiums, in mid to late September 2026. KFF has been more cautious, noting that without the extra subsidies some standalone drug plan enrollees could face a larger premium increase for drug coverage next year, and that plan specific amounts were not yet public. Both statements can be true, because the increase is not spread evenly. The plans that leaned hardest on the demonstration to hold their premiums flat are the ones with the most ground to make up. The number that actually matters to you is on the Annual Notice of Change your plan must get to you by September 30. That document states your 2027 premium, deductible, and formulary changes side by side with your 2026 ones. Read it. It is the single most useful piece of Medicare mail you receive all year, and most of it goes straight into a drawer.
What to Do About It Before December 7
A higher premium is not automatically a reason to switch, and switching is not automatically safe. A cheaper plan with a formulary that excludes one of your drugs, or that moves it to a higher tier, can cost you far more across a year than the premium you saved. The comparison has to run on your actual medication list, not on premium alone. Here is the practical sequence. When your Annual Notice of Change arrives, which your plan must get to you by September 30, check three things: the new monthly premium, whether each of your prescriptions is still on the formulary and at what tier, and whether your pharmacy is still a preferred pharmacy in the plan network. Then compare that against the other plans available where you live. You can make the change during the Annual Enrollment Period, which runs from October 15 to December 7, 2026, with the new plan starting January 1, 2027. Doing nothing means your current plan renews automatically at its 2027 premium and its 2027 formulary. One more thing worth checking. If your income and resources are limited, you may qualify for Extra Help, the federal Low Income Subsidy that pays some or all of your Part D premium and lowers your copays. People who qualify are shielded from much of this increase, and a fair number of people who qualify never apply.
What Extra Help Pays in 2026 and 2027, and Who Qualifies
The Extra Help mention above deserves numbers, because people near the line often assume they will not qualify. According to Medicare.gov, in 2026 you may qualify if your yearly income is up to $23,940 for an individual or $32,460 for a married couple, and your resources are up to $18,090 for an individual or $36,100 for a couple. If you qualify, Medicare.gov says you pay a $0 plan premium, a $0 deductible, no more than $5.10 for each generic drug and $12.65 for each brand name drug in 2026, and nothing once your total drug costs reach $2,100 for the year. CMS has already set the 2027 amounts: $5.80 for a generic, $14.40 for a brand name drug, and a $2,400 cap. That takes most of the 2027 premium increase out of the picture, and it comes with a second advantage: people with Extra Help can change drug plans once a calendar month rather than waiting for the next Annual Enrollment Period. These are the 2026 limits and copays; check the current figures when you apply. If your income or savings sit anywhere near those limits, checking costs nothing, and Lara Goulson can tell you in one call whether an application is worth your time, at (818) 472-5484.
Compare Before Your New Premium Starts
Comparing drug plans is tedious, and it is genuinely where an agent earns their keep, because the work is mechanical: take your medication list, your dosages, and your pharmacy, and run them against the plans we offer at your ZIP code to find the lowest total annual cost rather than the lowest premium. Lara Goulson does that at no charge, in English, Spanish, or Hebrew. Have your Annual Notice of Change and your prescription list ready when you call and the review is usually one conversation. The deadline is December 7, 2026, and the last two weeks are always the busiest, so earlier is easier. Call (818) 472-5484 to compare your 2027 Part D options.
Call (818) 472-5484 to compare 2027 drug plans before the December 7 deadline.
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