Speaker A
The Medicare landscape is changing, and 2027 may be one of the most disruptive years for Medicare that we've seen in some time. In this video, I'm going to explain four major changes that we're watching for Medicare for 2027, who
Major Medicare changes in 2027 include Part D subsidy removal, increased out-of-pocket caps, and Medicare Advantage plan disruptions. Prepare now.
Key Takeaways
- Standalone Medicare Part D plans will likely see premium increases in 2027 due to the end of temporary subsidies.
- The out-of-pocket cap for Part D prescription drugs will rise, increasing potential costs for beneficiaries.
- Medicare Advantage plans may be reduced or canceled, requiring beneficiaries to take proactive steps to maintain coverage.
- Open enrollment starting October 15 is critical for reviewing and selecting appropriate Medicare plans for 2027.
- Understanding plan changes and options early can prevent loss of coverage or unexpected costs.
What the video covers
- Medicare Part D subsidies will end on December 31, 2026, possibly causing higher premiums for standalone Part D plans in 2027.
- The Medicare Part D annual out-of-pocket cap will increase from $2,100 in 2026 to $2,400 in 2027, potentially raising drug costs for beneficiaries.
- Medicare Advantage plans may face disruptions such as benefit reductions, network shrinkage, or plan cancellations due to financial pressures on insurers.
- If a Medicare Advantage plan is canceled, beneficiaries may be crosswalked to a similar plan or default to traditional Medicare without supplemental coverage if no action is taken.
- Beneficiaries should actively review and shop for plans during the open enrollment period from October 15 to December 7, starting research on October 1.
- Changes in premiums, deductibles, formularies, and plan availability will vary by plan, insurer, and region.
- Medicare Advantage plan cancellations provide options including choosing a new Medicare Advantage plan, returning to traditional Medicare with standalone Part D, or purchasing certain Medigap plans with guaranteed issue rights.
- Medigap Plan G is highlighted as the most comprehensive supplement plan currently available.
- Beneficiaries are advised to carefully review annual notices of change and not ignore mailed communications about plan changes.
- Early preparation and understanding of these changes can help beneficiaries avoid being caught off guard during the 2027 enrollment period.
Chapters
- 00:00Introduction to 2027 Medicare Changes
- 00:48Medicare Part D Subsidies Ending
- 01:45Impact of Part D Subsidy Removal on Premiums
- 02:37Advice for Part D Plan Holders in 2027
- 04:21Increase in Part D Out-of-Pocket Cap
- 05:12Medicare Advantage Plan Disruptions
- 06:03Actions if Your Medicare Advantage Plan is Cancelled
- 07:00Options After Medicare Advantage Plan Cancellation
- 08:48Medigap Plans and Enrollment Advice
- 11:37Final Tips and Encouragement to Prepare
Full Transcript — Download SRT & Markdown
Speaker A
could be affected, and what you should do to prepare so that you're not caught off guard this fall. My name is Stephanie Apt. I'm a licensed independent Medicare insurance broker, and I've helped tens of thousands of people with their Medicare enrollment
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over the past 12 years. And every year, there are always some changes that happen to Medicare on the government level. This year, some of the changes will be pretty significant. Now, before we get started, remember that not every
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one of these changes is going to impact every Medicare beneficiary. Some of these changes will be regional or plan specific. So I'm going to give you some actionable items at the end of the video to show you how to figure out whether or
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not you'll be impacted by these plan changes. The first big change for 2027 that you may have seen in the headlines is that Medicare Part D subsidies are going away, or even worse, you may be seeing that Medicare Part D is going away. This
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language is not exactly true. Medicare Part D is alive and well. The program isn't going anywhere. Rather, the temporary subsidies that were put in place to help cap beneficiaries' spending on Part D premiums are ending as of January 1st, 2027. So, what does that
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mean? Well, beginning in 2025, Medicare Part D was redesigned to give beneficiaries much stronger protection against extremely high prescription drug costs. One of the most important changes as of 2025 was the new Medicare Part D annual out-of-
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pocket cap. Once beneficiaries reached a cap of spending on covered Medicare Part D drugs, then the Part D prescription drug plan was going to kick in and pick up 100% of the rest of the Medicare beneficiaries' prescription drug costs. This was a
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major benefit, especially for people taking very expensive medications. But that money had to come from somewhere, right? Under the redesigned system, Medicare Part D insurance companies became responsible for a larger portion of prescription drug costs. And there was concern that the insurance companies
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would respond by dramatically raising the monthly premium cost of the plans or by leaving the Part D market altogether.
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So in 2025, the government created a temporary premium stabilization program, provided additional financial support, and gave these insurance companies a lot of extra money with the intention of limiting how quickly participating plan premiums could increase. That temporary program continued into 2026, but CMS has
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now announced that it will end on December 31st, 2026, which was earlier than it was originally planned to end.
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So what does that mean for you? If you have a standalone Part D prescription drug plan, you could see a higher monthly premium on your drug plan for 2027. Now, CMS has said that they expect most beneficiaries to see a monthly
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increase of less than $10 a month. Some people could see little to no change, and some people could see a higher jump in their monthly premium. Your actual premium for 2027 is going to depend on the plan you have, the insurance company
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you have, and where you live. You could also see changes to your plan's deductible, the plan's formulary, the list of drugs that it covers, or you could see just fewer Part D prescription drug plan choices in your area. One
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important thing to note is that this temporary subsidy program applied to standalone Part D prescription drug plans, not to Medicare Advantage plans that included Part D coverage rolled into the plan. The bottom line is this.
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If you have a standalone Part D prescription drug plan, do not set it and forget it for 2027. You should anticipate that there will likely be significant changes to your drug plan, and you want to actively shop your
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coverage starting in October. You can make plan changes from October 15th to December 7th, but you can start looking at the plans starting October 1st. And I'm going to link a video in the description below that shows you how to
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use the government Medicare website to find and enroll in the best Part D plan for you and your specific medications.
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Now, a second big change for 2027 is that the Medicare Part D out-of-pocket cap is increasing. In 2025, when the prescription drug spending cap was first initiated, the cap was set at $2,000 a year. Meaning that for any Medicare
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beneficiary, as long as their prescription was covered by their Part D plan, they would never have to spend more than $2,000 a year on their prescription drug costs. In 2026, that cap increased to $2,100 a year. And now
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in 2027, it's going to increase to $2,400 per year. This means that someone taking expensive medications could potentially have to pay up to $300 more next year for their drugs. Now, once you reach that $2,400 cap, you generally don't pay
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anything else for covered medications for the rest of the calendar year. But there are some extremely important limitations. That $2,400 cap does not include your monthly premium cost for your Part D drug plan. And it also does not include medications that are not
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covered by your Part D plan. Another big change coming for 2027 is that there's more Medicare Advantage plan disruption.
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Over the past few years, Medicare Advantage insurance companies have been facing increasing financial pressures.
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And when a Medicare Advantage insurance company decides that a particular plan in a particular county is not particularly profitable to them, they may reduce benefits. They may cut out agents and brokers from being able to sell that plan. They can shrink the
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network, raise the co-pay, or they can stop offering the plan altogether. We won't know the complete picture until all of the 2027 plan information becomes available, but it's important to know what to do if your Medicare Advantage plan is eliminated. So, if this happens
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to you, first things first, don't panic. You do have options. Second thing, you do need to take action. Your insurance company is required to tell you that your Medicare Advantage plan is being cancelled. They usually will send you
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more than one notice about this. If your Medicare Advantage plan is being cancelled, then typically one of two things happens. Sometimes the Medicare Advantage insurance company will do something called crosswalking, which is where they'll just automatically place you on another similar Medicare
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Advantage plan that they offer. When this happens, you are defaulted into that new plan if you take no action. Of course, you can still use the annual open enrollment period between October 15th and December 7th to choose a
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different Medicare Advantage plan or to return to traditional Medicare if you'd like. But if you do nothing, then you'll be crosswalked to that new Medicare Advantage plan. The alternative is that the plan could be completely terminated and there is no crosswalking, meaning
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that your Medicare Advantage plan is completely cancelled, and if you take no action, you'll just be on traditional Medicare Parts A and B as of January 1st with no supplemental coverage and no prescription drug coverage. So, if the
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latter is happening to you, then you essentially have three main options of what you can do. If your Medicare Advantage plan is being completely cancelled, your first option is that you can choose a new Medicare Advantage plan. This is what most people will do.
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And before you choose a new plan, you really want to look at the plan's doctor networks. You want to look at the plan's co-pays and maximum out-of-pocket limit.
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And you want to make sure that it has the extra supplemental benefits that you are used to. So, if your current Medicare Advantage plan included dental, you'll probably want another Medicare Advantage plan that includes a similar benefit. But don't focus on the extra
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benefits only. The much more important things are the meat of your plan, li
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Option two is you can choose to return to traditional Medicare and add on a standalone Part D prescription drug plan. If your Advantage plan is being cancelled and you elect a standalone Part D prescription drug plan for January 1st, then you'll be on
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traditional Medicare A and B as of January 1st with your Part D drug plan as well. Option three kind of goes off of option two, going onto a traditional Medicare, adding a standalone drug plan, and then also including a Medicare
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supplement, also known as a metag gap plan. Now, if your Medicare Advantage plan is canceled, you have a guaranteed issue right to buy certain metagap plans without any medical underwriting, meaning without any medical questions.
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See, in most parts of the country, Medicare supplement companies can ask you medical questions on your application. And depending on how you answer the questions or what's in your health history, you could be denied coverage. But if your Medicare Advantage
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plan is being cancelled, you get a special guaranteed issue right to purchase certain metagap plans without any medical underwriting. Now, there are some Medigapat plans like plan N, a very popular one that you can't use that guaranteed issue right to purchase. So,
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if you're in relatively good health and you can pass through those health questions and that medical underwriting, then you can really choose any metagap plan that you want pending medical underwriting. If you think that you may want to go this route, don't wait
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several months after your Medicare Advantage coverage ends to do this. you get a short window to use that guaranteed issue, right? And you want to make sure you don't miss it. Generally, you have to make that choice within 63
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days of your coverage ending. Now, another big change that I anticipate for 2027 that I'm already seeing starting to happen now is a shift towards more interest in a high deductible plan G for metagap. This isn't really a new
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Medicare rule, more a trend that I'm seeing as someone that works in the Medicare market. Now, traditional Medicare Supplement Plan G is the most comprehensive metagap coverage that any Medicare beneficiary can purchase today.
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Essentially, it gives you 100% coverage after a pretty small annual deductible of $283 a year. In many parts of the country, Medicare Supplement Plan G is seeing significant rate increases, higher really than we've ever seen on Medicare supplement plans before. This
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is causing a lot more people to consider alternative plans like plan N or even a highdeductible plan G combo. And what I mean by that is people choosing to take a high deductible metagap plan like the high deductible plan G and pairing it
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with a couple ancillary medical products. Most people choosing this highdeductible plan G combo will also want to pair their highdeductible plan with a cancer plan and or a hospital indemnity plan. plans that pay you a cash benefit so that you really don't
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feel it if you are getting close to hitting that higher deductible on the high deductible plan G. But doing a combo like this can really protect you against these high high rate increases that we're seeing on Medicare supplement
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plan nationwide. Doing a high deductible plan G combo like this won't be for everyone, but it's something that a few years ago really wasn't even being talked about. And now more and more people are looking at this as kind of a
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way to hack the system when it comes to high metagap rate increases. So knowing what we know about the future changes to Medicare in 2027, what should you be doing now to prepare? Well, the most important thing to do is to keep a close
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close eye out for your annual notice of change document. You would be shocked at how many people throw this away every year or tell me I never got it because you get so much junk mail. I get it. I
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get so much junk mail as well. And it's very easy to just throw that into the trash or recycling bin without paying it a second look. But the annual notice of change document must be sent out to you
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if you have a Medicare Advantage plan or a part D prescription drug plan. And it's one of the most important notices that you'll get this year about your Medicare plan. It's going to tell you every single change happening to your
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plan for 2027 and what your options are. If you want to shop your plan, which many people will, you should make a very complete list of your prescriptions and your doctors, want to have this information handy so that you can choose
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a plan that's going to give you the best coverage for your specific needs for the next year. Now, of course, this is what my team and I do every day, every year, is we help seniors that are on Medicare
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to shop for, find, and enroll in the best plans for their needs. And during that busy annual enrollment period window, our calendars fill up very quickly and very far in advance. So now is the time to really start thinking
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about whether or not you're going to want to make changes for 2027. And if you have any questions, concerns, or you're looking for other ways to prepare, please reach out to us directly. You can email me, you can call
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my team. We're licensed in 48 states, and our service is completely free of charge. So we would love the opportunity to assist you. Thank you so much for watching.
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[music] Please share this video with someone who may find this information useful. Subscribe if you haven't done so yet and leave any questions or comments that you have for [music] me in the comment section below. Thanks so much for
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watching and we'll see you soon.
Topics:Medicare 2027Medicare Part DMedicare AdvantageMedicare changesPart D subsidiesout-of-pocket capMedicare enrollmentMedigap Plan Ginsurance premiumsMedicare open enrollment
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