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7 Medicare Changes and Developments to Watch For in 2027
From prescription drugs to telehealth, pay close attention to Medicare's evolving coverage, costs and policies next year
10-minute read
Chris Gash
Key takeaways
- Medicare-negotiated lower prices on 15 additional prescription drugs.
- 2027 Part A and Part B premiums, deductible to be announced soon.
- Stand-alone Part D drug plan availability falls; premiums rise for many.
- $50 GLP-1 bridge program slated to expire December 31, 2027.
- Expect renewed debate over enhanced pandemic telehealth coverage.
The new year will bring changes to Medicare, and many of those deal with prescription drug coverage. Medicare’s drug negotiation program will continue to lower the price of widely used medications, while Medicare’s expanding coverage of GLP-1s has made the popular drugs less expensive and more accessible.
For an update on what’s in store for Medicare in 2027, we’ve listed seven of the most significant changes and developments that could affect you.
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1. Medicare-negotiated lower prices for 15 prescription drugs
Fifteen additional prescription drugs with high costs for the Medicare program will be available at lower negotiated prices beginning January 1. The list of reduced-cost medications includes three popular GLP-1s — Ozempic, Rybelsus and Wegovy — along with drugs to treat asthma, prostate and breast cancer, diabetes, cardiovascular disease, irritable bowel syndrome and other ailments.
These 15 drugs account for about $42 billion in total Medicare Part D spending and are used by about 5.3 million enrollees. The lower prices are expected to save $8.5 to $12 billion a year and an estimated $685 million in out-of-pocket costs for Part D enrollees next year, according to the Centers for Medicare & Medicaid Services (CMS).
The first round of Medicare-negotiated lower prices on 10 different medications took effect on January 1, 2026. The drug negotiation program is a major component of a 2022 prescription drug law that revamped the Part D prescription drug benefit and cut beneficiary out-of-pocket drug costs.
AARP has strongly supported the drug negotiation program. We continue to urge federal officials to expand Medicare’s ability to negotiate drug prices and to slow increases in drug plan premiums, so all Part D options remain affordable.
Each of the 15 new drugs for 2027 must be covered in all Medicare Advantage prescription drug plans and stand-alone Part D drug plans that original Medicare beneficiaries can buy.
Another 15 drugs covered under Part D and Part B, which covers physician-administered drugs, will debut their lower negotiated prices in January 2028.
2. Part D out-of-pocket spending cap, deductible to rise
The maximum out-of-pocket spending limit for Part D prescription drugs will rise to $2,400 in 2027. That’s up nearly 14.3 percent from $2,100 in 2026. The Part D deductible and out-of-pocket limit change every year based on how fast Part D spending is growing.
Beneficiaries who reach the spending cap won’t have to pay any out-of-pocket costs for covered Part D drugs for the rest of the calendar year.
The out-of-pocket limit applies to both Part D stand-alone plans that go with original Medicare and Medicare Advantage plans with drug coverage.
The maximum standard Part D deductible, which is adjusted each year, also increases for 2027. It’s $700 next year, up from $615 in 2026. Some Part D plans will have lower deductibles or none at all.
The Medicare Board of Trustees projects the standard monthly premium for Part B coverage will increase by $6.60 to $209.50 per month in 2027.
The trustees project the Part B deductible, the amount you pay before Medicare coverage kicks in, to go from $283 to $292 in 2027.
The actual Part B premium for 2027 and the deductible are expected to be announced later this month by CMS.
Part B covers an extensive number of services, including physician visits, outpatient hospital services, diagnostic tests, preventive screenings and drugs administered by providers.
Next year’s Part A premium and deductibles will also be announced in November.
Medicare Part A covers inpatient hospital care, short-term nursing home stays, hospice care and home health care following a hospital stay. Most people 65 and older pay no premiums for Part A because either they’ve worked 40 quarters and paid Medicare taxes or they qualify through their spouse.
But if you aren’t eligible for zero-premium Part A, you can buy the coverage — which will include a monthly premium — just like you buy a private insurance policy. To do so, you’ll also have to sign up for Part B.
If you’ve worked and paid Medicare taxes for 30 to 39 quarters, your $311-a-month Part A premium in 2026 is projected to increase to $330 in 2027, the trustees expect. Others eligible for Medicare but who have worked fewer quarters pay $565 per month for Part A in 2026. That’s projected to increase to $600 in 2027.
The trustees expect the Part A inpatient hospital deductible will increase from $1,736 to $1,788 next year, while the inpatient daily coinsurance for days 61 to 90 is projected to go from $434 this year to $447 next year.
4. Part D premium stabilization program ends in 2027
A temporary program that lowered premiums for Part D stand-alone drug plans used by beneficiaries in original Medicare is discontinued for 2027.
The Medicare premium stabilization program paid a combined total of $9.8 billion to the plans in 2025 and 2026 to help them transition to consumer-friendly provisions of a 2022 prescription drug law that revamped the Part D benefit. While the law cut drug costs for Part D enrollees, it increased costs for insurers that were expected to raise premiums in response.
Without the subsidy program, premiums would have “nearly doubled” in 2025 for those who stayed in their 2024 stand-alone drug plan, the Government Accountability Office found earlier this year. Monthly premiums for 37 percent of these beneficiaries would have increased by more than $40, GAO found.
But after two years, the Trump administration canceled the subsidy program for 2027 — its planned final year. Dr. Mehmet Oz, CMS administrator, called the program an insurance industry bailout and said plans already had sufficient time to adjust to the 2022 drug law.
The canceled subsidies “did not result in substantially higher across-the-board” premiums for stand-alone plans in 2027 “but still likely affected premium levels,” says KFF, a nonprofit health care research organization.
5. Premiums rise, availability falls for Part D stand-alone plans
Part D stand-alone prescription drug plans used by beneficiaries in original Medicare will be harder to find and more expensive for many next year.
The total number of stand-alone drug plans fell from 360 in 2026 to 316 in 2027, KFF says. And the number of stand-alone plans available to the average beneficiary will decline for the fourth straight year from 11 in 2026 to nine in 2027.
In addition, there’ll be no zero-premium stand-alone plans available next year to the nearly 21 million current plan enrollees — 83 percent — who don’t receive financial assistance with their drug costs through the federal Extra Help program, according to Avalere Health, a health care consulting firm.
That means 4 million of these beneficiaries now enrolled in zero-premium plans in 2026 will have to pay a monthly premium for the coverage in 2027, according to KFF.
And average monthly premiums for stand-alone coverage will rise 50 percent from $38.72 this year to $58.20 in 2027 for the nearly 21 million current plan enrollees who get no financial assistance, says Avalere.
A similar study by KFF estimates average monthly premiums for stand-alone plans will rise 50 percent next year to $51 from $34 in 2026, assuming current enrollees keep their same plan for 2027.
The loss of access to the zero-premium plans for enrollees without low-income subsidies is “possibly related” to the cancellation in 2027 of temporary subsidies paid to stand-alone plans in 2025 and 2026, KFF notes. The canceled subsidies could also be related to monthly premium hikes of $50 or more next year for some stand-alone plan enrollees who remain in their current plan, per KFF.
6. Program providing $50 GLP-1s slated to end December 31, 2027
Overweight Medicare beneficiaries could be searching for another way to access low-cost GLP-1 medications in December 2027 if a temporary program that provides the medications for $50 per month expires as scheduled at the end of next year.
Launched in July 2026, the 18-month GLP-1 bridge program offers one-month supplies of Wegovy injections and tablets, Foundayo tablets and the Zepbound KwikPen for a $50 copay to help eligible beneficiaries with Part D prescription drug coverage lose weight and maintain weight loss.
Medicare’s Part D benefit covers GLP-1s only if you’re diagnosed with another ailment that the drugs can treat, like type 2 diabetes, sleep apnea or the fatty liver disease known as MASH.
The bridge program operates outside of Part D and limits enrollment to beneficiaries who meet strict medical requirements and who aren’t eligible for GLP-1 coverage through their Part D prescription drug plan. An estimated 3.8 million beneficiaries could be eligible for the program, according to KFF.
More than 500,000 were enrolled in the program by the end of August, the White House reported on Aug. 31.
During Eli Lilly’s third-quarter earnings call last month, company CEO Dave Ricks said more than 500,000 bridge program prescriptions were filled for either Lilly’s Foundayo or Zepbound medications.
“Among new bridge patients, 7 out of 10 are starting on a Lilly obesity medicine,” Ricks said. The company estimates roughly “20 million Medicare patients may meet the CMS clinical criteria for obesity medicines, yet access has historically been limited under Medicare,” a company spokesperson says.
The bridge program was conceived as a six-month lead-in to a proposed Medicare pilot program that was to launch in January 2027. The program, known as the BALANCE model, would have continued the $50 copays for covered GLP-1s through participating Part D plans.
But in April 2026, CMS indefinitely postponed the pilot and extended the bridge program by a year through 2027. CMS is collecting and sharing data on GLP-1 usage in the bridge program with Part D insurers and will decide later whether BALANCE will be implemented.
7. Enhanced telehealth coverage expires December 31, 2027
Expect a new round of debate next year over whether to extend COVID-19 pandemic-era enhancements to Medicare’s telehealth coverage.
Telehealth is the use of technology, like the internet, videoconferencing and wireless communications, to provide health services remotely, removing the need for some in-person visits.
Expanded telehealth coverage under Medicare began in March 2020 to keep older adults from being exposed to COVID-19 in hospitals and in doctors’ waiting rooms.
The bipartisan budget deal that ended the most recent government shutdown extended Medicare’s enhanced home telehealth benefit until the end of 2027.
It allows patients to receive telehealth care at home, and it covers more services, like physical and occupational therapy, emergency consultations and nursing facility care, says KFF. Before the expanded coverage, Medicare generally limited telehealth services to rural areas and beneficiaries had to go to approved sites, like doctor’s offices and clinics, to receive the services.
Since the pandemic ended, telehealth usage has declined but remains nearly twice as high as it was before the COVID-19 emergency, KFF says. AARP supports making Medicare’s pandemic telehealth flexibilities permanent.
“Policymakers have considered legislation that would permanently expand Medicare coverage of telehealth and are weighing the implications for Medicare spending and program integrity,” KFF says.
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