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Medicare Open Enrollment Is Here. 4 Things Retirees Should Know
By Martha C. White MONEY RESEARCH COLLECTIVE
Medicare costs and coverage are changing in 2027. Here’s what retirees should check before choosing a plan.
Today is the first day of Medicare open enrollment for 2027. During the program’s annual open enrollment period from Oct. 15 to Dec. 7, Americans who get health insurance via traditional Medicare or Medicare Advantage plans have to consider whether to keep their current coverage or switch. What’s more, a larger-than-usual number of enrollees this year will have to choose new plans.
Here’s what retirees need to keep in mind for Medicare coverage in 2027.
Premium, deductible hikes on tap for traditional Medicare
Retirees with traditional Medicare are likely to see higher costs. The Centers for Medicare & Medicaid Services (CMS) will release its official numbers later this fall, but projections from the Medicare Board of Trustees estimate an increase of $6.60 in the monthly Medicare Part B premium, bringing that total to $209.50 per month. In addition, the annual deductible is projected to rise to $292, from $283 this year.
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Prescription drug costs are likely to rise
Enrollees could wind up paying more for prescription drugs, as well. “Medicare recipients shouldn’t assume their drug coverage will not change much for the next year, because they may see a big spike in costs,” Brandon Hill, senior advisor at Beckett Financial Group, tells Money via email.
“There have been a lot of shakeups in the prescription drug space for Medicare,” he adds. “Due to the elimination a couple years ago of the coverage gap/donut hole, insurance companies are now absorbing a lot more of the prescription costs. Therefore, we’re seeing a lot of prescription drug plans — Part D — disappearing from the market altogether, as well as substantial premium increases on plans that are staying.”
Retirees got some relief from high drug prices thanks to a cap on out-of-pocket prescription drug costs implemented under the Inflation Reduction Act. From its initial $2,000 limit in 2025 (the first year the cap was implemented), it rose to $2,100 this year. Next year, it’s on pace for a much steeper increase, to $2,400.
Medicare Advantage costs are shrinking — but so are options
More than half of the roughly 70 million Americans on Medicare are enrolled in Medicare Advantage plans. Along with extras like vision and dental coverage not covered by traditional Medicare, these plans often offer lower payments, with many including prescription drug coverage that enrollees in traditional Medicare have to pay for separately. Premiums for Medicare Advantage plans are projected to fall by an average of 16% next year.
The flexibility that lets insurers offer those sweeteners, though, can be a double-edged sword for retirees. “Year-to-year changes in Medicare Advantage plans, such as changes in provider networks or prior authorization requirements, can affect enrollees’ access to care,” an issue brief from healthcare policy research organization KFF notes. This is bad news for retirees who pick a plan only to find themselves effectively locked in if coverage of a favorite doctor or medically preferable drug is dropped.
For 2027, perhaps the most glaring potential drawback for Medicare Advantage enrollees is that their plan might not be available at all. In 2026, a record high of nearly 3 million retirees had to switch healthcare plans because their Medicare Advantage policies weren’t renewed, according to an analysis from the Johns Hopkins Bloomberg School of Public Health. For next year, some estimates put the new figure as high as 5 million.
Retirees should plan to shop around
Because of the greater number of annual changes compared to traditional Medicare, experts say comparison-shopping is the best way Medicare Advantage enrollees can make sure that they’re getting the best plan for their health needs and budget. But data from KFF shows that 65% of enrollees never bother to evaluate their options. Among Medicare Advantage enrollees, the number drops to 60%, even though these people arguably would derive the most benefit from a comprehensive review of their available options.
People who lose their Medicare Advantage coverage should compare premiums when evaluating alternatives, but they shouldn’t stop there, experts say: Co-payments for services and for drugs are also important, especially for people who expect to use a lot of health services or have an extensive list of prescriptions.
“It’s very important beneficiaries do a comprehensive review of all available plans in their resident ZIP code,” Hill writes. “This can help ensure they’re getting the best bang for their buck,” he adds.
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A longtime Money contributor, Martha C. White has written about a variety of personal finance topics such as careers, credit cards, insurance, retirement and shopping, and has edited Money’s Best Credit Cards rankings. She also writes stories about business and the economy for NBC News and The New York Times.