Regulation
Medicare Part D drug plan choices shrink again for 2027 as premiums diverge sharply
By Insurance Wire Staff, . Insurance Wire.
The Centers for Medicare & Medicaid Services released 2027 Medicare Part D plan data this week, and a KFF analysis of the figures shows a market that is contracting in both plan count and sponsor participation while delivering sharply uneven premium outcomes depending on which plan a beneficiary currently holds.
The total number of stand-alone prescription drug plans available nationwide is dropping from 360 to 316, offered by 15 parent organizations rather than the 17 that participated in 2026, according to KFF. The average beneficiary will have access to nine stand-alone drug plans, down from eleven last year, continuing a four-year slide in plan availability. The contraction is concentrated at two sponsors: Health Care Service Corporation is pulling its HealthSpring Extra Rx plan from 22 regions, and CVS Health is withdrawing its SilverScript Choice plan from 13 regions. Humana remains the only insurer maintaining three plans across all 34 prescription drug plan regions.
State-level availability now ranges from eight plans in 15 states to twelve in one state. Most states have moved toward the lower end of that range. Florida is the only state gaining a plan for 2027; four others see no change.
On premiums, the picture splits. CMS put the average monthly stand-alone drug plan premium at $36 for 2027, up from $35, a figure that understates the range of outcomes individual enrollees will face. KFF found that enrollees in six of the eight plans continuing on a national basis will see premium reductions in at least some states if they stay put, but the same plans are raising premiums in other states. For some enrollees, staying in their current plan means absorbing a monthly increase of $50 or more.
A significant factor behind the premium volatility is CMS's decision to end the Part D Premium Stabilization Demonstration after 2026 rather than extend it for a third year as originally planned. That demonstration had reduced the base beneficiary premium used in calculating individual plan costs and capped year-over-year premium increases. With the cap gone, large single-year increases are now possible for enrollees who do not actively shop. KFF notes that zero-premium stand-alone drug plans for beneficiaries without low-income subsidies may also disappear as a result.
The majority of Part D enrollees, roughly 56% according to KFF, are in Medicare Advantage drug plans rather than stand-alone plans and will not be directly affected by these premium shifts. CMS has indicated that the average Medicare Advantage drug plan premium for 2027 will remain well below the stand-alone plan average, and most Medicare Advantage drug plan enrollees are expected to continue paying zero premium, as they did in 2026. That gap exists because Medicare Advantage plans can apply federal rebate dollars to offset drug coverage premiums, a mechanism unavailable to stand-alone plan sponsors.
For brokers and agents working the Medicare market, the practical implication is that beneficiaries in stand-alone plans face a more consequential shopping decision this enrollment cycle than in recent years. KFF cautions that premium is only one variable: formulary coverage, drug tier placement, deductibles and cost-sharing requirements may all be shifting simultaneously, and a plan holding its premium steady may be doing so by narrowing its covered drug list or tightening utilization management. The analysis suggests that as carriers absorb rising Part D costs overall, the tradeoff for enrollees whose premiums are kept in check may be less generous coverage elsewhere in the benefit design.
What the KFF analysis does not yet address is how the sponsor withdrawals will affect beneficiary distribution across remaining plans, or whether the two departing sponsors intend to re-enter those regions in future years. Those questions will matter for carriers still competing in the stand-alone market, where the shrinking field may concentrate enrollment risk among fewer players.
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