Medicare Part D in 2027: The Subsidy Holding Premiums Down Ends December 31, and 1.5 Million Floridians Are in Its Path

Data current: September 17, 2026 · Florida · 13 min read

For two years, standalone Medicare drug plans have been priced with a thumb on the scale. Not a metaphorical one — an actual federal subsidy, paid directly to the plans, specifically to stop premiums from spiking after the Inflation Reduction Act rewrote how Part D works.

That subsidy ends on December 31, 2026. It was supposed to run through 2027; CMS cancelled the last year of it in July. The plans you will be looking at during this year's Annual Enrollment Period are the first ones priced without it.

I am Vivian Soto, an independent bilingual insurance agent at VS Healthcare Solutions in Orlando. This is what CMS has actually published for 2027, what is still a projection, and which Florida households are standing in front of the change. About 1.5 million people in this state are in the group it lands on, and most of them have not heard of the program that is ending.

The three numbers CMS has actually published

There is a great deal of speculation circulating about 2027 Part D costs right now. These three figures are not speculation. CMS finalized the benefit parameters in its Contract Year 2027 Rate Announcement on April 6, 2026, and released the bid information on July 28, 2026.

Two of those rows move your costs at the pharmacy. The other two move your monthly premium, and they are the ones worth sitting with.

The out-of-pocket cap is still the best thing about modern Part D. Once you have spent $2,400 out of pocket on covered drugs in 2027, you pay nothing more for them for the rest of the year. For someone on an expensive specialty medication, that single line is worth more than the premium difference between any two plans on the shelf.

But notice the direction. You pay $300 more before that protection engages, and up to $85 more in deductible before the plan starts sharing costs at all. If you live with chronic conditions, those two numbers reshape your year.

The subsidy almost nobody has heard of

Here is the part that explains the premium column.

When the Inflation Reduction Act capped out-of-pocket drug spending, it shifted a large amount of financial risk from Medicare onto the drug plans. CMS expected insurers to respond by raising premiums sharply, so in 2025 it created a voluntary program — the Part D Premium Stabilization Demonstration — that paid standalone plans to hold premiums down while they adjusted.

It worked in the sense that it did what it was designed to do, and it was not cheap: CMS estimated the demonstration would cost about $9.8 billion across 2025 and 2026. Here is how it was scaled back as it went.

CMS announced the conclusion on July 28, 2026, a year earlier than the demonstration was scheduled to run, on the reasoning that plan sponsors now have enough experience under the redesigned benefit to price it themselves. 2027 is the first year the standalone drug plan market operates on its own terms since the IRA changes took effect.

The arithmetic, on one line

The base beneficiary premium is not what you pay. It is the anchor in the formula that sets what each plan may charge for basic coverage, and it is where the demonstration applied its reduction.

So the honest comparison is not $38.99 against $41.33. It is this:

And $41.33 is not a number CMS chose freely. The Inflation Reduction Act caps year-over-year growth in the base beneficiary premium at 6% through 2029. $38.99 raised by exactly 6% is $41.33. The premium went up by the maximum the statute permits, and the cap is the only reason it did not go higher.

What this means for your bill depends on your specific plan, because plans bid individually and some will absorb more of it than others. CMS's own projection is that most standalone enrollees will see an increase of under $10 a month, with some seeing no increase or a decrease. That is a reasonable central expectation. It is not a promise about your plan, and “most” is not “all.”

Who this actually lands on

This is the distinction that decides whether the rest of this article is about you.

The demonstration applied to standalone Part D plans — the separate drug plan you buy when you have Original Medicare, often alongside a Medigap policy. Medicare Advantage plans with drug coverage were never part of it. They fund their drug benefit differently, through their overall plan payments, and those payments went up for 2027.

So if you are on Original Medicare with a separate drug card, this is your change. If your drug coverage comes bundled inside a Medicare Advantage plan, your 2027 risk lives somewhere else entirely: in supplemental benefits and network changes, which is what I see move every year in Florida.

There are also fewer plans to choose from

The other half of the story is that the standalone market has been contracting hard while this played out.

That is roughly half the market gone in two years, down to 17 parent organizations across the 34 PDP regions. Consolidation on that scale is why so many people were moved into a different plan without asking for it — when a plan is discontinued, enrollees get reassigned.

The 2027 landscape is not published yet. It arrives in late September, which is the point of the calendar we are at right now.

Florida in numbers

Local context matters here, because Florida does not look like the national average.

As of January 2026, 1,545,406 Floridians were enrolled in a standalone Part D plan. Another 2,834,365 got their drug coverage inside a Medicare Advantage plan. And 57% of all Florida Medicare beneficiaries were in Medicare Advantage, above the national figure.

That first number is the one to hold onto. More than a million and a half people in this state are in exactly the group the demonstration was subsidizing, and it is a group that skews toward people who chose Original Medicare deliberately — often with a Medigap policy, often for network freedom, and often on a fixed income where $10 a month is a real number rather than a rounding error.

What is still a projection

I would rather be straight about the limits of what is known in mid-September than have you plan around a number that moves.

The benefit parameters — the $2,400 cap and the $700 deductible — are final. The base beneficiary premium of $41.33 and the national average bid of $296.05 are final. The end of the demonstration is final.

What is not yet published is the thing you actually shop: the 2027 plan landscape, with each plan's premium, deductible, formulary and pharmacy network. CMS releases that in late September, and Medicare's Plan Finder switches over to 2027 data on October 1. Anyone quoting you a specific 2027 plan premium before then is estimating.

Your own plan, however, has already told you what it intends to do. That is what the Annual Notice of Change is, and it should have reached you by September 30.

The cap is still the good news

It is easy to read all of this as bad news, and the premium side genuinely is. The benefit side is not.

Before 2025 there was no limit at all on what Part D could cost you in a year. Someone on a specialty drug could spend ten thousand dollars and keep spending. The cap changed that permanently: $2,000 in 2025, $2,100 in 2026, $2,400 in 2027, indexed each year rather than negotiated away.

There is also a payment-timing tool most people still do not use. The Medicare Prescription Payment Plan lets you spread that $2,400 across the remaining months of the year instead of absorbing it in January, which is when high-cost drugs tend to front-load. It does not reduce what you owe, but it stops a $2,400 January. I wrote a full guide to it: how the Medicare Prescription Payment Plan works in 2027.

What to do between now and October 15

Frequently asked questions

How much is my Part D premium going up in 2027?

There is no single answer, because each plan sets its own. What is known: the base beneficiary premium rises from $38.99 to $41.33, the $10 monthly demonstration reduction disappears, and CMS projects most standalone enrollees will see an increase under $10 a month. Your ANOC letter has your plan's actual number.

What was the Part D Premium Stabilization Demonstration?

A voluntary CMS program that ran in 2025 and 2026, paying standalone drug plans to keep premiums from spiking after the Inflation Reduction Act redesigned Part D. It reduced the base beneficiary premium by $15 a month in 2025 and $10 in 2026, and capped how much any plan could raise premiums year over year. It ends December 31, 2026.

Does this affect my Medicare Advantage plan?

Not directly. The demonstration only applied to standalone Part D plans. Medicare Advantage plans with drug coverage fund that benefit through their overall plan payments, which increased for 2027. Your 2027 risk is in supplemental benefits and provider networks instead — read the ANOC for those.

What is the Part D out-of-pocket maximum for 2027?

$2,400, up from $2,100 in 2026. Once your out-of-pocket spending on covered drugs reaches it, you pay $0 for covered drugs for the rest of the calendar year. The standard deductible maximum rises to $700 from $615.

When can I actually compare 2027 plans?

Medicare's Plan Finder switches to 2027 data on October 1, 2026. Enrollment opens October 15 and closes December 7. Use the first two weeks of October to compare without a deadline pressing on you — it is the best structural advantage in the whole calendar.

Will my plan still exist in 2027?

Possibly not. The standalone market went from 709 plans in 2024 to 360 in 2026. If your plan is discontinued, your ANOC or a separate notice will say so, and you will generally be reassigned to another plan rather than left uncovered — but the plan you get assigned to was not chosen for your prescriptions.

I take no medications. Should I keep a drug plan at all?

In almost every case, yes. Dropping Part D without other creditable drug coverage creates a late enrollment penalty of 1% of the base beneficiary premium for each month you went without — and it is permanent, recalculated every year against a base premium that is now $41.33 and rising. A low-premium plan is cheap insurance against that.

What does it cost to work with an agent?

Nothing. Independent agents are paid a commission by the carrier, and that commission is already built into the plan premium whether you enroll on your own or with help. Your premium is identical either way.

Why a Florida agent matters this particular year

In a normal year, comparing drug plans is arithmetic you can do yourself on Medicare.gov, and plenty of people should.

This is not quite a normal year. The premium floor moved, the subsidy that has been masking it is gone, the plan count has halved in two years, and the landscape that tells you what any of it means for your specific prescriptions does not publish until the end of September. Those four things interact, and they interact differently depending on whether you are on Original Medicare with a drug card or inside a Medicare Advantage plan.

What I do in October is unglamorous: take your actual drug list, your actual pharmacy, and run it against the plans available in your county, ranked by total annual cost rather than premium. The cheapest premium and the cheapest year are frequently different plans, and the gap is often larger than the entire premium increase people are worried about. You can see how we handle Medicare plan reviews or reach me directly.

1. Centers for Medicare & Medicaid Services. Contract Year 2027 Rate Announcement, April 6, 2026 — Part D benefit parameters.
2. Centers for Medicare & Medicaid Services. Medicare Part D 2027 National Average Monthly Bid Amount Information, July 28, 2026 — bid amount, base beneficiary premium, and conclusion of the Part D Premium Stabilization Demonstration.
3. Centers for Medicare & Medicaid Services. 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters, July 28, 2025.
4. U.S. Government Accountability Office. Medicare Part D: Implementation of Beneficiary Premium Stabilization Demonstration, GAO-26-107935 — demonstration parameters and estimated cost.
5. KFF. A Current Snapshot of the Medicare Part D Prescription Drug Benefit — standalone plan counts, 2024 through 2026.
6. healthinsurance.org. Medicare in Florida — state enrollment data, January 2026.
7. Inflation Reduction Act of 2022 — 6% annual cap on growth in the Part D base beneficiary premium through 2029.

About the Author

Vivian Soto

Licensed Bilingual Insurance Agent — Orlando, FL

Vivian Soto is a Florida-licensed bilingual (English/Spanish) insurance agent serving families across Orange, Osceola, Seminole, Hillsborough, and Miami-Dade counties. She specializes in the ACA Marketplace, Medicare, life insurance, and supplemental coverage — having filed 500+ ACA applications for Florida families and maintained a 91% renewal retention rate. She works directly with 40+ top carriers including Florida Blue, UnitedHealthcare, Humana, Aetna, and Mutual of Omaha.

500+ ACA Apps Filed 91% Retention Rate Bilingual EN/ES 40+ Carriers

Schedule a Consultation → Email Vivian