About the time we think we have Medicare figured out, The Center for Medicare/Medicaid Services or ‘CMS’ changes it up! The government agency usually announces changes to Medicare in the fourth quarter for the coming year. We have little time to adjust to it or educate our clients about it, especially amid the busy Annual Enrollment Season. The big ticket items to watch for in 2027 include rising Part D premiums, shrinking drug plan options and a new batch of negotiated drug prices. In addition, we project another year of diminishing perks on the Advantage Plans. Read on to get some confirmed numbers and some likely changes for 2027! And stay tuned!
The Numbers We Know
As I am writing this blog post, we do have two numbers already set for 2027. The max allowed Part D Deductible is rising from $615 this year to $700 for next year. This impacts beneficiaries that take higher cost, brand name drugs. This is most often found with Tiers 3, 4 and 5 drugs. The sticker shock occurs each year in January or February when you go to the pharmacy for the first time to fill your medication. Your first copay could be $700 or higher. However, notice this is the ‘max’ allowed and set by CMS. Be sure to review your plan materials and ANOC (Annual Notice of Change). Plans can have different drug deductible amounts. The other number set for next year is the drug copay Max out of Pocket. It is increasing from $2100 this year to $2400 next year. The is the most you will pay for covered drugs at the pharmacy for the entire year. If a drug you take is not on your plan’s formulary, the cap will not apply. You could pay retail costs up to an unlimited amount.
Part D Plan Options
Over the past few years, the amount of stand alone Part D drug plans has been diminishing. I remember when there were 24 different options in the Central Indiana Market. We are now down to 10 options in 2026. We do not have official confirmation for 2027, but we will not be surprised if a few more plans disappear. However, do not confuse stand-alone drug plans with drug coverage on Advantage Plans. There are still over 70 options in the Advantage Plan market that include drug coverage. There are certain situations where the need for affordable drug coverage makes an Advantage Plan look much more attractive, so we project that being a serious factor during the upcoming Annual Enrollment Period.
Part D Premium Stabilization Ends
For two years, CMS and the federal government have subsidized drug plan premiums in light of the increase in costs sustained by the insurance companies related to the Inflation Reduction Act. The premiums were going to increase substantially to offset the costs associated with the drug copay cap added in 2025. To keep premiums reasonable for the beneficiaries, the government pitched in while the insurance companies studied the impacts of the annual cap on drug copays. This subsidy program is set to end this year. The concern now is what that means for the drug plan premiums. We do not have those numbers confirmed yet, but this makes your ANOC critical for your review. This document should come to your house in the mail by September 30th, so look for it. If you have concerns about the changes you see, make sure you reach out to your agent! We know things!
Telehealth Visits Coverage Extended
The coverage of telehealth visits was born during the pandemic. It has proven to be helpful, especially in rural areas, and is increasingly viable as Medicare Beneficiaries become better at utilizing technology. CMS has decided to extend this for another year. Legislation is still pending as to making this permanent, but they continue to use avenues to extend the coverage. The extension ensures virtual care remains accessible and reimbursable through next year.
Newly Negotiated Drug Prices
The second round of negotiated prices for select high cost and highly utilized drugs for Medicare Beneficiaries go into effect in 2027. The hope is that lower prices will make it all the way to the consumer, but it does not always. The drugs that should show a more reasonable price include Ozempic, Rybelsus, Wegovy, Trelegy (inhaler), Linzess, Calquence, Breo Ellipta (inhaler), Xifaxan, Vraylar, Janumet, Otezla and Austedo. The new formularies and prices will be loaded on Medicare Compare on October 1st. This is when we can run quotes and see the actual prices you will pay as they pertain to each plan for 2027.
Wrap Up
There are a couple other interesting changes coming in 2027 related to the prescribing and use of medical marijuana and CBD. Plans will be able to offer FDA recognized products they call ‘Generally Recognized as Safe’ such as hemp seeds, powder, and oils. There will also be a doctor-guided CBD pilot program for managing chronic pain.
The most important takeaway from all of this is to be sure to watch for and thoroughly review your ANOC (Annual Notice of Change) from your insurance company. If I have not mentioned this yet, you will get this document in the mail by September 30th. The next step will be to connect with your trusted local independent agent to ensure you are in the right plan for 2027!
CDI is here to help you through this entire maze. We can meet in person or virtually. Reach out if you would like more information. Email carrie@cdi-cares.com or check out www.cdi-cares.com for a contact page and other helpful blogs.
Data Sources: