2027 Medicare Part D Changes: Why Agents Should Prepare Clients Now

Medicare Part D is heading into another year of significant change, and independent insurance agents should start preparing their clients before Annual Notice of Change letters begin arriving.

For 2027, the Centers for Medicare & Medicaid Services (CMS) has set the Part D base beneficiary premium at $41.33, a 6% increase from 2026. More importantly, CMS is ending the temporary Part D Premium Stabilization Demonstration after 2026.

For agents with clients enrolled in standalone Prescription Drug Plans (PDPs), that second change may be the one to watch most closely.

Listen to Episode 22: Your Part D Clients Are About to Pay More

What Is Changing With Medicare Part D in 2027?

CMS announced several important Part D figures for the 2027 plan year.

The national average monthly bid amount will increase to $296.05, while the base beneficiary premium will rise to $41.33.

The base beneficiary premium is not necessarily what a Medicare beneficiary will pay for a particular plan. It is one of the inputs used to determine plan-specific Part D premiums.

Actual premiums will vary by carrier, plan and market.

CMS is expected to release finalized Medicare Advantage and Part D plan information in September, so agents should avoid making assumptions about individual plan premiums before those details become available.

View the CMS 2027 Medicare Part D announcement

The Bigger Story: Part D Premium Stabilization Is Ending

The Part D Premium Stabilization Demonstration was introduced in 2025 following major changes to the Part D benefit under the Inflation Reduction Act.

The program was designed to help reduce volatility in standalone PDP premiums while carriers adjusted to the redesigned Part D benefit.

That support is now going away.

In 2025, the demonstration reduced the base beneficiary premium used by participating PDPs by $15 and limited year-over-year premium increases. The support was reduced for 2026, and CMS has now announced that the demonstration will conclude at the end of the year.

According to KFF, the additional subsidies lowered the average monthly premium for standalone PDP coverage by approximately $26 in 2025 and $16 in 2026.

Without that additional support in 2027, some beneficiaries enrolled in standalone drug plans could experience larger premium increases than they have seen in recent years.

KFF provides additional analysis of the change here.

Why Standalone PDP Clients Deserve Extra Attention

One important distinction for insurance agents is that the Premium Stabilization Demonstration applied specifically to standalone Prescription Drug Plans.

It did not apply to Medicare Advantage plans that include Part D coverage.

That makes clients who combine Original Medicare, a Medicare Supplement plan and a standalone PDP particularly important to review this fall.

KFF reports that the average monthly standalone PDP premium in 2026 was approximately $36, compared with roughly $8 for drug coverage included with Medicare Advantage plans.

That difference does not mean Medicare Advantage is automatically a better option.

It means agents should expect prescription drug coverage to become an increasingly important part of the annual client review.

Don't Compare Premiums Alone

A higher drug plan premium can certainly get a client's attention.

But premium is only one part of the equation.

Before recommending any change, agents should evaluate the client's complete prescription drug situation, including:

• Current medications
• Formulary coverage
• Drug tiers
• Pharmacy networks
• Copays and coinsurance
• Deductibles
• Estimated annual drug costs
• Total expected out-of-pocket expenses

A plan with a lower monthly premium can ultimately cost a beneficiary considerably more if an important medication has unfavorable formulary placement or coverage.

The objective should not be to find the lowest premium.

It should be to help the client identify coverage that makes sense based on their medications, pharmacy preferences, healthcare needs and overall costs.

September Could Be One of the Most Important Months of AEP Preparation

Agents do not need to wait until October to begin preparing clients.

In fact, the period before Medicare's Annual Enrollment Period can be used to organize the book of business and identify clients who deserve priority reviews.

Start by identifying clients currently enrolled in standalone PDP coverage, especially Medicare Supplement clients.

Then prepare them for what is coming.

A simple message might be:

"There are changes coming to Medicare prescription drug coverage for 2027. Once your plan sends its updated information for next year, I'd like to review it with you to make sure your coverage still makes sense."

That conversation accomplishes something important without predicting a client's premium before the actual plan information becomes available.

It reminds clients that they have someone watching the market for them.

Use the ANOC as the Trigger for the Real Review

The Annual Notice of Change (ANOC) provides the plan-specific information agents need to move from preparation to analysis.

Once those notices arrive, review:

What is the new premium?

Did the deductible change?

Are the client's medications still covered?

Did formulary tiers change?

Are their preferred pharmacies still competitive?

What is the client's estimated total annual cost?

This is also a good time to update medication lists and other client information before running plan comparisons.

PSM agents preparing for the upcoming selling season can also use our Medicare AEP Preparation Guide to organize their strategy ahead of enrollment season.

Part D Changes Create a Client Service Opportunity

Rising costs are rarely welcome news for beneficiaries.

For agents, however, periods of market change reinforce the value of ongoing client service.

The agent who contacts a client before the client becomes confused by a premium notice, advertisement or carrier mailing has an opportunity to demonstrate something much more valuable than simply selling a policy.

They demonstrate that they are paying attention.

That can strengthen retention, generate additional review appointments and create opportunities for referrals.

It is also a good reminder that Medicare sales should not end when an application is submitted.

Successful agents continually review their book, educate their clients and adjust as the market changes.

Start With Your Standalone Part D Book

The most practical step agents can take today is simple:

Identify every client in your book with a standalone Prescription Drug Plan.

Organize those clients now so they can be prioritized when 2027 plan information becomes available.

Medicare will continue to evolve. Premiums will change. Benefits will change. Carrier strategies will change.

Agents who build a repeatable process for reviewing those changes are better positioned to protect their clients and grow their business through every Medicare selling season.

Listen: Your Part D Clients Are About to Pay More

This topic is also covered in Episode 22 of The Insurance Producers Guild, including the numbers behind the 2027 Part D changes, why standalone PDP clients deserve particular attention and how agents can turn the changes into productive client review conversations.

Listen to Episode 22: Your Part D Clients Are About to Pay More

For additional strategies, training and resources for independent insurance agents, explore the PSM Agent Academy or learn more about PSM Brokerage.

Sources

Centers for Medicare & Medicaid Services: Medicare Part D 2027 National Average Monthly Bid Amount Information

KFF: CMS's Decision to End Temporary Subsidies to Medicare's Stand-Alone Drug Plans Could Mean Larger Premium Increases for Some Beneficiaries Next Year

The Insurance Producers Guild: EP22 Your Part D Clients Are About to Pay More