Medicare is ending the temporary program that has held down premiums for stand-alone prescription drug plans. The Centers for Medicare & Medicaid Services (CMS) says the Part D Premium Stabilization Demonstration will be discontinued at the end of 2026. The 2027 base beneficiary premium, the benchmark number used to set Part D pricing, rises to $41.33 from $38.99 this year.
That $41.33 is not what any member will pay each month. It is a reference figure. Plan premiums are set separately by each insurer, and they vary by plan, region and income. But the figure feeds into two charges that land on real people, and the end of the program changes the market those insurers are pricing in.
What the base premium is and what it touches
CMS published the 2027 number on July 28, 2026, alongside a national average monthly bid of $296.05, up from $239.27 for 2026. The base beneficiary premium for 2026 was $38.99. The jump is $2.34, which is the full 6% a year that the Inflation Reduction Act allows. That limit applies from 2024 through 2029.
Anyone who went without drug coverage after first becoming eligible should look at this number. Medicare.gov says the late enrollment penalty is 1% of the national base beneficiary premium for each full month a person went 63 days or more without Part D or other creditable coverage. People who qualify for Extra Help do not pay it.
People who are in a plan now, or who take a handful of brand-name drugs, face the real question: does the plan they have still make sense for 2027, once the subsidy that helped keep stand-alone premiums down is gone? Open Enrollment runs from October 15 through December 7, 2026, according to CMS.
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What the ending program did
CMS created the demonstration for 2025, after the 2022 drug-pricing law changed how Part D plans are paid. It was voluntary and open to stand-alone drug plan sponsors. For 2026, CMS set a uniform $10 reduction in the base premium, down from $15 in 2025, and limited any plan’s total premium increase to $50, up from $35.
AARP reports that the program paid $9.8 billion to stand-alone plans across 2025 and 2026. CMS Administrator Dr. Mehmet Oz has called it an insurance industry bailout and said the plans have had enough time to adjust to the 2022 law. CMS says it is returning Part D to market conditions in 2027.
What CMS says premiums will do
In its September 28 announcement, CMS put the average monthly premium for a stand-alone drug plan at $36 for 2027, up from $35.09 this year. That is an increase of less than $1 on average. CMS also says 88% of people not on Extra Help can find a basic plan at $10.30 a month or less.
Averages hide a lot. Juliette Cubanski, who directs Medicare policy research at KFF, told AARP that "it will pay to shop around" during open enrollment. KFF counts stand-alone plans falling to 312 in 2027 from 360. It also found that no $0-premium stand-alone plans will be open to people outside Extra Help, a group in which 28% had one in 2026.
For people in Medicare Advantage plans that include drug coverage, CMS puts the average Part D portion of the premium at $7 for 2027, down from $11.32.
Costs beyond the premium
Premiums are only part of the bill. The yearly cap on out-of-pocket drug spending is $2,100 in 2026. AARP says it rises to $2,400 in 2027. The deductible varies by plan, and CMS has not put a single national figure on it in the bid release.
That is why the cheapest premium is not always the cheapest plan. A plan with a low monthly charge can carry a high deductible or put a needed drug in a costly tier. Each plan’s drug list and pharmacy network decide the real cost for each person.
Why the 6% cap does not settle it
The 6% limit applies to the base beneficiary premium, the benchmark. It does not cap what an insurer charges for a given plan. CMS data show the average moving less than $1 for 2027, but individual plans can move far more, and the end of the $10 reduction is exactly the kind of change that shows up in a single plan’s price.
Medicare’s Plan Finder lets people enter their own drugs and pharmacy and see 2027 costs. Free help is available at 1-800-MEDICARE, which CMS says is open 24 hours a day, seven days a week. Oz has urged beneficiaries to use Open Enrollment as an opportunity to review their coverage.
The question for anyone on a stand-alone plan is whether last year’s choice still holds once the program ends. The answer is on the plan’s own 2027 notice, and the deadline is December 7.
Picking a drug plan before December 7?
A stand-alone plan that looked cheap this year can cost more in 2027 once the $10 premium reduction ends, and a missed December 7 deadline leaves the plan locked in for the year. Many people only learn the new deductible or drug tier when the first pharmacy bill arrives.
The 2027 Medicare Open Enrollment Decision Kit includes a cost calculator spreadsheet that compares plans on cost, drugs and doctors, and a prescription-by-plan comparison. It also holds a provider call script and the Open Enrollment calendar, with an Excel Automatic Cost Calculator so the keep, switch or wait decision comes with a written reason.
Compare your 2027 drug plan costs, drug by drug, with the calculator spreadsheet →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
