Medicare open enrollment opens October 15. Before it does, it is worth understanding a number buried in a CMS actuarial memo — because it explains why the 2027 Part D headline looks calm and the bill may not.
Two Calculations, and the Statute Picks the Smaller One
On July 28, 2026, CMS announced that the 2027 Part D base beneficiary premium is $41.33, up from $38.99. That is a 6% increase, and 6% is not a coincidence.
The Inflation Reduction Act set the base premium for 2024 through 2029 as the lesser of two calculations. CMS published both. Calculation A — last year's premium times 1.06 — produced $41.33. Calculation B, the actual bid-based formula, produced $94.06.
The statutory cap is the only reason the base premium is not roughly double. That cap expires after 2029.
The Second Cushion Ends Sooner
The base premium is not what you pay. Your plan's premium is the base figure adjusted by the gap between your plan's bid and the national average bid ($296.05 for 2027), plus any supplemental premium or late-enrollment penalty.
Since 2025, a separate program has been compressing that number for standalone drug plans. The voluntary Part D Premium Stabilization Demonstration cut the base premium used in plan pricing by $15 in 2025 and $10 in 2026, and capped year-over-year premium increases at $35, then $50, per month. GAO put its cost at $9.8 billion across the two years.
CMS is ending it. Its July memo concluded that sponsors "had sufficient experience under the redesigned Part D benefit," and will "discontinue the demonstration at the end of CY 2026 to return the program to operating under traditional market conditions in CY 2027."
KFF, citing MedPAC, reports the subsidies lowered the average monthly standalone plan premium by $26 in 2025 and $16 in 2026. That support is gone next year — and it applied to standalone plans, whose enrollment grew from 22.8 million in 2024 to 24.9 million in 2026.
The Cost-Sharing Side Is Indexed to Drug Spending
CMS also finalized 2027 defined-standard parameters: the deductible rises from $615 to $700, and the annual out-of-pocket cap from $2,100 to $2,400. Those are increases of 13.8% and 14.3%.
They are not tied to inflation. Statute indexes them to the annual percentage increase in per-capita Part D drug spending. For context, the 2026 Social Security COLA was 2.8%; the 2027 COLA is not announced until October 14.
What to Do Before December 7
- Read the Annual Notice of Change. Plans must deliver it by September 30. It shows your 2027 premium, deductible, and formulary — the only plan-specific numbers that matter.
- Ignore the 6% headline. It governs the base premium, not yours. With the $50 increase cap gone, plan-level jumps are no longer bounded.
- Re-shop, don't auto-renew. Compare on the Medicare Plan Finder. A low premium paired with a full $700 deductible and a worse formulary can cost more.
- Check Extra Help eligibility. The low-income subsidy is unaffected by the demonstration ending.
- Pre-retirees: model drug costs separately. A budget line growing near 14% cannot be funded by a COLA near 3%.
The $2,400 ceiling remains real protection — above it you pay nothing for covered drugs. The path to it just got more expensive.
Sources: CMS, Annual Release of Part D National Average Monthly Bid Amount and Other Part C & D Bid Information, July 28, 2026; CMS, Announcement of CY 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (Table V-6); KFF, CMS's Decision to End Temporary Subsidies to Medicare's Stand-Alone Drug Plans; Avalere Health Advisory, CMS Modifies Part D Premium Stabilization Demonstration; GAO-26-107935.