Medicare Open Enrollment Brings Fewer Plan Options, Potential Cost Increases

Medicare's open enrollment period, which began recently, presents significant changes for beneficiaries, including a decrease in available Medicare Advantage plans and potential increases in prescription drug costs.

The number of Medicare Advantage plans available to beneficiaries is projected to decrease for 2027, with the average beneficiary able to choose from 35 plans, down from 39 in 2026. This reduction indicates that some private insurance companies are scaling back or withdrawing their offerings, potentially requiring many of the 35 million people enrolled in these Medicare-approved private plans to select new coverage.

A KFF analysis also found that the number of counties where beneficiaries will have no Medicare Advantage prescription drug plan available has increased to 193 for 2027, up from 123 in 2026. Approximately 1% of Medicare Advantage beneficiaries will face this lack of prescription drug plan availability during general enrollment.

Expiration of Part D Subsidies

Compounding these changes, the Trump administration announced earlier this year it would end a temporary subsidy program designed to cap prescription drug plan premiums for seniors. This program, known as the Part D Premium Stabilization Demonstration, is set to expire at the end of the year.

Administration officials stated that the program's subsidies benefited corporate insurance companies. The expiration is expected to lead to higher prescription drug costs and increased premiums for about half of the beneficiaries who utilize Medicare Part D, the prescription drug benefit program for older and disabled individuals.

"Without these extra subsidies in place for 2027, some Part D stand-alone drug plan enrollees could face a larger premium increase for drug coverage next year than in recent years, though plan-specific premium amounts are not yet known," said Juliette Cubanski, vice president and director of the program on Medicare policy at KFF, in a statement.

A March 2026 report from the Medicare Payment Advisory Commission indicated that the subsidies reduced the average monthly prescription drug plan premium by $26 in 2025 and $16 in 2026.

Despite these projections, Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, claimed in a social media post in July that most Medicare recipients would not see their premiums increase by more than $10. He added that "Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient."

Other adjustments to Medicare Part D for the upcoming year include an increase in the standard deductible, from $615 to $700. Experts advise beneficiaries to pay close attention to not only premiums but also deductibles and out-of-pocket maximums, as these can significantly impact overall costs.

Medicare's open enrollment period continues until December 7.