Fatima Hussein, Associated Press
WASHINGTON (AP) — Open enrollment for Medicare plans begins Thursday, and enrollees will face several changes that will take effect in 2027.
During the enrollment period, which ends on December 7, individuals will have the opportunity to choose between traditional Medicare and privately run Medicare Advantage plans in their area, as well as prescription drug plans. These changes will take effect on January 1.
The open enrollment period coincides with rising inflation, which has increased healthcare costs for seniors, and the upcoming midterm elections. Voters have indicated that cost-of-living is a significant concern as the elections approach.
The Medicare enrollment period also follows an announcement from the Social Security Administration on Wednesday that the annual cost-of-living adjustment for older adults and individuals with disabilities will increase by 3.6% starting in 2027. This adjustment translates to an additional $75 per month for nearly 72 million individuals receiving monthly Social Security benefits and about 7.3 million beneficiaries of Supplemental Security Income.
Changes to Medicare set for 2027 include higher out-of-pocket caps for Medicare Part D, the termination of temporary federal Part D premium subsidies, and new drug price negotiations. The annual out-of-pocket expense cap for Medicare Part D drugs will rise to $2,400, up from $2,100 in 2026, while the standard deductible will increase from $615 to $700.
The temporary Part D premium subsidy will also end. This subsidy program was initially implemented by the Biden administration in 2024 to reduce Medicare Part D prescription drug costs in response to the 2022 Inflation Reduction Act.
The Centers for Medicare & Medicaid Services (CMS) has projected only modest price increases for most beneficiaries. CMS did not respond to an Associated Press request for comment.
New Medicare-negotiated prices, as part of a law from the Biden administration that allows negotiations for Medicare, will take effect for 15 drugs, including diabetes and weight-loss medications such as Ozempic, Rybelsus, and Wegovy. Other drugs covered by Medicare starting January 1 include Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo/Austedo XR, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, and Janumet/Janumet XR.
CMS expects these changes to reduce prescription drug coverage costs for Medicare beneficiaries by $685 million in 2027.
AARP's Executive Vice President and Chief Advocacy Officer, Nancy LeaMond, stated that "higher healthcare costs are making it harder for older Americans to afford the care they need." She emphasized the importance of comparing options and selecting the best coverage.
In recent weeks, former President Donald Trump made several promises to Medicare enrollees and retirees. Last week, he announced a one-time payment of $90 per person in October to assist over 20 million Medicare enrollees, which will cost approximately $2 billion. However, this payment will not be available to around 35 million Medicare Advantage enrollees, other individuals with disabilities, and low-income Medicare recipients.
According to the CMS website, eligible beneficiaries will receive a $90 rebate this month, with most receiving a direct deposit, while others will receive a paper check from the Treasury Department later in October. Trump also announced that approximately 1 million individuals would receive rebate checks of $500 for Affordable Care Act premiums.