Two renewal notices have probably turned up in your mailbox this month. One is from your Part D drug plan, spelling out what coverage will cost starting January 1. The other is from your Medigap insurer, and the number on it is rarely small this year.
Open enrollment started October 15 and runs through December 7, and this is the year both of those bills are moving at once. The base figure used to calculate standalone Part D premiums is rising 6 percent, to $41.33 a month, the fastest increase federal law allows through 2029. Medigap premiums, which nobody caps at all, are coming in higher still in plenty of states.
The Part D numbers are already locked in. The Medigap numbers depend on where you live and which company insures you, but the rate filings already sitting with state regulators show plenty of policyholders are looking at double-digit jumps, some well into the twenties.
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The federal numbers behind your 2027 drug plan bill
The national base beneficiary premium, the starting point used to calculate what standalone drug plans can charge, is rising from $38.99 to $41.33 a month for 2027, a 6 percent increase and the maximum allowed under the Inflation Reduction Act’s premium stabilization cap. That figure isn’t necessarily what you’ll pay, since actual premiums vary by plan, but it sets the floor insurers build from.
The averages insurers are actually filing look calmer on paper. The projected average premium for standalone Part D plans is rising by less than a dollar, from $35.09 to $36 a month, and for Medicare Advantage plans that bundle in drug coverage, the average premium is dropping 38 percent, from $11.32 to $7, once rebates are applied.
The part that stings shows up once you’re actually filling prescriptions. The standard deductible is jumping from $615 to $700, an $85 increase of nearly 14 percent, and your annual out-of-pocket cap for covered drugs is rising from $2,100 to $2,400. Both are the largest single-year increases since the standard Part D benefit was created in 2006.
Why the subsidy that was keeping premiums down just ended
The reason Part D premiums are moving at all traces back to a program most people never heard of. Starting in 2025, a voluntary subsidy called the Part D Premium Stabilization Demonstration gave standalone drug plans extra money to keep their premiums from swinging wildly after the Inflation Reduction Act rewrote how the benefit works. It shaved real dollars off monthly premiums for two years running.
That program is ending a year earlier than planned, with insurers now considered to have enough experience pricing the redesigned benefit on their own starting January 1. What that does to any individual premium depends entirely on the plan and the state. The national averages are holding close to flat, but those averages blend plans getting cheaper with plans getting a lot more expensive, and the safety net is gone either way. There will be no standalone drug plans left with a zero-dollar premium for anyone who doesn’t qualify for Extra Help, after 28 percent of beneficiaries outside that program paid nothing at all in 2026. If your renewal notice shows an increase bigger than the averages above, that’s this subsidy disappearing from your specific plan rather than something the national number predicted.
Medigap premiums are climbing even harder this year
Nothing about Medigap pricing is federally set, which is exactly why it can move faster than Part D. Illinois broker John Jaggi had been selling Medicare insurance for 49 years when more than 80 of his clients on the same supplemental plan got hit with a 45 percent premium increase last August, applied immediately rather than waiting for each person’s renewal date.
That jump was unusual in size, but not in direction. Early 2026 rate filings from six of the largest insurers in the supplemental market show Plan G increases ranging from just over 12 percent to more than 26 percent in a single quarter. In Ohio, carriers that used to raise rates 3 to 5 percent a year are now filing for 10 to 15 percent. In Alaska, one insurer raised Plan G premiums close to 12 percent, pushing a 65-year-old woman’s monthly bill from $172 to $192.
More than 12 million people, about 43 percent of everyone on traditional Medicare, carry a Medigap policy specifically because it’s the only thing standing between them and unlimited out-of-pocket costs. For most of them, this is simply what keeping that protection now costs.
Why nothing is stopping the Medigap increases
Five years ago, a Medigap rate increase above 10 percent was unusual enough to raise eyebrows. Now, it’s uncommon to see an increase below 10 percent, and increases over 20 percent aren’t rare either.
Several forces are pushing in the same direction at once. Beneficiaries are using more medical care than insurers priced for, the Medicare population keeps getting older and costing more to cover, and labor and medical costs across the health system keep climbing. On top of that, roughly 2.6 million people lost their Medicare Advantage plan this year when insurers pulled out of their markets, and a share of them moved into Medigap coverage without being medically underwritten, adding risk to a pool that carriers eventually price back in.
Traditional Medicare also still has no overall out-of-pocket cap, which is the entire reason Medigap exists and the reason insurers can keep raising prices on a product people feel they can’t drop. Lawmakers have floated adding one, but a change like that would add real cost to the federal budget and isn’t close to happening in the current legislative environment.
What actually helps before December 7
For Part D, open enrollment is your real leverage. Formularies and preferred pharmacies change every year, so the plan that was cheapest for your medications in 2026 isn’t guaranteed to be cheapest in 2027. Running your actual drug list through Medicare’s official plan comparison tool before you do anything else usually finds savings that dwarf the headline premium increase.
Medigap works differently, because you generally can’t switch to a cheaper plan without answering health questions once you’re past your original enrollment window. Some states require insurers to let you move to an equivalent plan with a different company around your birthday or policy anniversary without medical underwriting, so it’s worth asking an agent whether your state has that rule before assuming you’re stuck. A smaller number of people genuinely save by switching to a high-deductible Medigap plan, which carries a lower premium in exchange for covering less until you’ve spent close to $3,000 yourself, though that trade-off only makes sense if you can comfortably absorb that deductible in a bad year.
If your income is limited, it’s worth checking whether you qualify for Extra Help with Part D costs or a Medicare Savings Program that can cover premiums and cost-sharing outright. A free counselor through your state’s State Health Insurance Assistance Program can run the numbers with you at no cost before you commit to anything.
Neither letter in your mailbox is exaggerating. Both bills are going up this year, and the only real defense is comparing your actual options before December 7 instead of letting either renewal notice carry over automatically.
