Medicare Is Ending the Program That Held Down Part D Drug-Plan Premiums. What It Means for 2027

A federal program that spent the past two years holding down the price of Medicare's stand-alone prescription drug plans is going away. The Centers for Medicare and Medicaid Services said on July 28, 2026 that it will end the Part D Premium Stabilization Demonstration after the 2026 plan year. For the roughly 23 million people in original Medicare who buy a stand-alone drug plan, that decision is the reason some premiums could climb more sharply when they shop this fall.

The change does not touch your benefits or the list of drugs a plan covers. It changes the math behind the premium. Open Enrollment runs from October 15 to December 7, 2026, and the plan you have now may not be the best deal for 2027.

What the stabilization program did

The demonstration started in 2025, the same year a major redesign of Part D took effect under the Inflation Reduction Act. That redesign capped what seniors pay out of pocket for drugs but shifted more cost onto insurers, and plans responded by threatening steep premium increases. To keep the stand-alone market from lurching, CMS offered participating plans two things: a flat per-member subsidy that lowered the premium, and a cap on how much a plan could raise its premium from one year to the next.

It worked, but the support shrank in year two. In 2025 the subsidy was up to $15 per member each month and the year-over-year premium increase was capped at $35. For 2026, CMS cut the subsidy to $10 and loosened the cap to $50. Nearly every stand-alone plan took the money, and the average stand-alone premium actually fell, from about $40 a month in 2025 to roughly $36 in 2026, according to KFF.

What changes for 2027

For 2027 the subsidy and the cap both disappear. CMS says plan sponsors now have enough experience pricing the redesigned benefit to stand on their own, and it is returning the market to what it calls traditional conditions. In plain terms, nothing is holding a plan's premium down anymore, and nothing limits how much it can rise.

The base beneficiary premium, a national figure CMS uses to anchor each plan's premium, rises to $41.33 for 2027, up $2.34 from $38.99 in 2026. That is a 6 percent increase, the most the law allows the base to grow in a single year. Your actual premium depends on the plan you pick, not on this national number, but it moves in the same direction.

Who is affected, and who is not

This only applies to stand-alone Part D plans, the drug-only coverage that people in original Medicare buy to sit alongside Parts A and B. If you get your drug coverage bundled inside a Medicare Advantage plan, the stabilization program never applied to you, and ending it does not change your plan's drug premium directly.

Stand-alone plans have been thinning out for years, which raises the stakes this fall. The average person had 14 stand-alone drug plans to choose from in 2025, down from 30 in 2021, according to KFF. Fewer plans and no premium cap mean the gap between a good choice and an expensive one can be wide. If you want a refresher on how the enrollment window works, see our guide to Medicare Open Enrollment for 2027.

If you have Extra Help, you are mostly shielded

People who qualify for Extra Help, the Part D Low-Income Subsidy, are largely protected from these premium swings because the program pays the premium up to a regional benchmark. The catch is that the number of plans available at the full benchmark, the ones that cost $0 for people with Extra Help, has dropped from eight to two for the average enrollee since 2021. If your plan is no longer a $0 benchmark plan for 2027, you could be moved to a different one. It is worth confirming you are enrolled and checking whether you still qualify through Medicare Savings Programs and Extra Help.

The out-of-pocket cap is still there for 2027

One piece of good news holds. The annual limit on what you pay out of pocket for covered drugs stays in place and rises to $2,400 for 2027, up from $2,100 in 2026. Once your spending hits that ceiling, you pay nothing more for covered prescriptions for the rest of the year. A higher premium can still sting, but the cap is the protection that matters most for anyone with serious drug costs. We cover it in detail in our report on the Medicare Part D out-of-pocket cap for 2027.

What to do before December 7

The single most useful thing you can do is re-shop your drug coverage rather than letting it renew on autopilot. Premiums, covered drug lists, and pharmacy networks all reset each year, and a plan that was cheap in 2026 may not be in 2027.

• Run your own drug list through the Medicare Plan Finder at Medicare.gov, or call 1-800-MEDICARE, to see your real 2027 premium and total cost, not just the headline premium.
• Compare total cost, which means premium plus deductible plus what you pay at the pharmacy, because the cheapest premium is not always the cheapest plan.
• Check that your prescriptions are still covered and that your pharmacy is still in network for 2027.
• If money is tight, apply for Extra Help and Medicare Savings Programs, which can erase the premium entirely for those who qualify.
• Make any switch by December 7, 2026, so your new coverage starts January 1.

The bottom line

Ending the stabilization program does not cut anyone's benefits, but it removes the cushion that kept stand-alone drug-plan premiums from rising fast. Some 2027 premiums will be higher as a result, and the only way to know what you will actually pay is to look up your own plan. Treat this Open Enrollment as a required check-up, not a formality, and the increase may never reach your budget.

This article is a news report for general information and is not financial, insurance, or medical advice. Program figures are drawn from CMS and KFF as of October 2026 and may change. Confirm your own plan's 2027 premium and coverage on Medicare.gov or by calling 1-800-MEDICARE before you make any decision.