6 Reasons Your Medicare Costs Will Be Increasing in 2027
Medicare beneficiaries are heading into 2027 with a confusing message. Some insurance premiums are projected to remain stable or even decline, yet millions of retirees could still find themselves paying more for healthcare. The reason is that your Medicare cost is much bigger than the number printed next to the word “premium.”
Hospital deductibles, Part B premiums, Medigap rates, drug costs, copayments, disappearing plans, and changes to provider networks can all affect what eventually comes out of your pocket. CMS currently projects the average Medicare Advantage premium to fall from $14.37 in 2026 to $12 in 2027, while the average stand-alone Part D premium is projected to rise by less than $1. That sounds encouraging, but it does not mean every retiree’s total Medicare spending will fall.
Here are six reasons Medicare could become more expensive for you in 2027—and what you should be watching before choosing next year’s coverage.
1. Your Medicare Part B Premium Is Expected to Rise Again
For most Medicare beneficiaries, Part B is one of the first healthcare expenses deducted from Social Security each month. The standard Part B premium jumped from $185 a month in 2025 to $202.90 in 2026, an increase of $17.90. The annual Part B deductible also increased from $257 to $283.
The official 2027 Part B premium has not yet been released by CMS as of November 7, 2026. However, the 2026 Medicare Trustees Report estimated a standard monthly premium of approximately $209.50 for 2027, which would represent another increase if that projection holds.
That increase may not sound dramatic on a monthly basis, but Medicare expenses compound across a household. If both spouses are enrolled in Part B, even a modest premium increase is doubled. Higher-income beneficiaries can pay substantially more because IRMAA surcharges are added to the standard premium.
The Part B premium is also only one piece of the equation. Beneficiaries using Original Medicare generally remain responsible for 20% coinsurance on many Part B services after meeting the deductible unless supplemental insurance covers the difference. Higher medical prices and greater healthcare utilization can therefore affect beneficiaries through both premiums and actual medical bills.
2. Fraud, Waste, and Expensive Billing Continue to Put Pressure on Medicare
Medicare spends hundreds of billions of dollars every year, which makes even relatively small areas of excessive or questionable billing financially significant. One striking recent example involved skin substitutes used to treat certain wounds. Medicare Part B spending on these products surged past $10 billion annually by the end of 2024, prompting concerns from federal regulators about pricing, utilization, fraud, waste, and abuse.
CMS eventually changed how these products are reimbursed. The agency estimated its changes would reduce spending on skin substitutes by roughly 90%, and CMS said the 2026 Part B premium increase would have been about $11 per month higher without the reforms. That illustrates how extraordinary spending in just one category can ultimately affect the wider Medicare program.
Fraud should not be blamed for every Medicare premium increase. Medical inflation, new treatments, greater utilization, an aging population, and provider reimbursement all play important roles. But unnecessary services, improper claims, and abusive billing increase the amount Medicare spends without necessarily improving patient care.
Beneficiaries can help by reviewing Medicare Summary Notices and Explanation of Benefits documents. A claim for equipment you never received, treatment you do not remember, or a provider you have never seen deserves investigation. Protecting your Medicare number and reporting suspicious claims can help prevent the same billing information from being reused.
3. Medigap Premiums Can Keep Rising Even When Your Benefits Stay the Same
People with Original Medicare often purchase Medigap coverage to protect themselves from deductibles and coinsurance. A standardized Plan G purchased from one company generally provides the same basic standardized benefits as Plan G from another company. The premiums, however, can be very different.
Those premiums can also increase from year to year. Insurance companies may adjust rates based on claims experience, medical inflation, pricing method, age, and state regulatory requirements. Someone who entered Medicare with an affordable supplement can therefore discover several years later that the premium has become a much larger portion of the retirement budget.
Plan G and Plan N illustrate the trade-off. Plan G generally provides broader cost-sharing protection, while Plan N can require certain office and emergency-room copayments and does not cover Part B excess charges. Plan N may therefore carry a lower monthly premium, but a lower premium does not necessarily mean a lower total annual cost for someone using substantial healthcare.
This is especially important because changing Medigap policies later may not always be as easy as shopping for a cheaper auto policy. Federal law provides a six-month Medigap Open Enrollment Period beginning when someone is 65 or older and enrolled in Part B. Outside that window and other guaranteed-issue situations, medical underwriting may apply depending on the state and circumstances.
4. Millions of Medicare Advantage and Part D Members Are Losing Their Current Plans
One of the biggest Medicare developments for 2027 is not simply a premium increase. It is that millions of people will have to find entirely new coverage. KFF’s analysis of CMS data found that approximately 4.3 million Medicare beneficiaries are enrolled in Medicare Advantage or stand-alone prescription drug plans scheduled to terminate at the end of 2026.
That includes approximately 3.1 million people in Medicare Advantage drug plans and 1.2 million people in stand-alone Part D plans. Among people in individual Medicare Advantage prescription-drug plans being terminated, about 2.8 million are affected—roughly 14% of enrollment in those plans.
Losing a plan does not necessarily mean someone will pay more. Another plan may have a similar or even lower premium. The risk is that the replacement plan can have different doctor networks, hospital participation, copayments, maximum out-of-pocket limits, drug formularies, and prior-authorization requirements.
That is why the advertised premium can be misleading. A retiree could move from a $20 plan to a $0-premium plan and still spend more if specialist copays rise, an expensive medication changes tiers, or a preferred hospital is no longer in network. The correct comparison is total expected healthcare spending, not just monthly premiums.
5. Prescription Drug Coverage Is Changing Again in 2027
Medicare Part D has become much more protective against catastrophic prescription costs, but that does not mean every beneficiary’s pharmacy bill will decline. The redesigned Part D program eliminated cost sharing in the catastrophic phase and introduced a much lower annual out-of-pocket ceiling. Those are major improvements for people taking expensive medications.
At the same time, insurers are adapting to taking on more financial responsibility under the redesigned benefit. For 2027, the national Part D base beneficiary premium rises to $41.33, although an individual’s actual plan premium can be higher or lower. CMS projects the average stand-alone Part D premium at about $36 a month, less than $1 higher than 2026.
The larger concern is plan availability. The average Medicare beneficiary will have about nine stand-alone Part D plans available in 2027, down from 11 in 2026. KFF found that roughly 1.2 million existing stand-alone Part D members are in plans being terminated at the end of 2026.
That makes prescription review essential. A plan with a similar premium can become much more expensive if one of your medications moves to a more expensive tier, receives a new authorization requirement, or is no longer covered. Entering every prescription and preferred pharmacy into Medicare’s Plan Compare tool can reveal differences that are impossible to see from the monthly premium alone.
6. Lower Medicare Advantage Premiums Can Hide Higher Costs When You Actually Need Care
There is an important fact that should not be ignored: average Medicare Advantage premiums are projected to fall in 2027. CMS expects the weighted average premium across Medicare Advantage plans to decline by about 16.5%, from $14.37 in 2026 to $12 in 2027.
But premium is only one way Medicare Advantage members pay for healthcare. Plans can charge copayments and coinsurance for specialists, imaging, outpatient surgery, hospital stays, rehabilitation, and other services. They can also change provider networks and supplemental benefits from one year to the next.
That means someone who remains healthy may indeed spend less in 2027. Someone who develops cancer, needs surgery, sees multiple specialists, or requires extensive rehabilitation could experience a very different year financially. Medicare Advantage does provide an annual out-of-pocket maximum for covered Part A and Part B services, which is an important protection, but beneficiaries still need to know what their individual plan’s maximum is.
The same principle applies to benefits marketed as “free.” Dental, vision, hearing, fitness, transportation, and over-the-counter allowances can be valuable, but they should not outweigh the medical fundamentals. Your doctors, hospitals, prescriptions, prior-authorization rules, copayments, and maximum out-of-pocket exposure matter far more during a serious illness.
The Premium Is Not the Number You Should Be Comparing
Imagine two plans. The first costs $100 per month but produces very little additional medical cost when you use healthcare. The second has a $0 premium but exposes you to several thousand dollars of copayments during a difficult health year.
Neither is automatically better. The first requires you to pay more whether you use healthcare or not, while the second allows you to keep more money during healthy years but shifts more financial risk into the years when you need care. Your health, savings, doctors, and tolerance for unpredictable bills should determine which arrangement fits better.
This is also why retirees should consider both a normal year and a bad year when comparing plans. Ask what you would pay if you had several specialist visits, an MRI, outpatient surgery, a hospital admission, and rehabilitation. The plan that looks cheapest while you are healthy may not remain the cheapest under that scenario.
Do Not Confuse the December 7 Deadline With Medigap Enrollment
The current Medicare Annual Open Enrollment Period runs from October 15 through December 7, 2026 for coverage beginning in 2027. During this period, beneficiaries can make changes involving Medicare Advantage and Part D coverage.
That deadline does not create a universal Medigap open enrollment period. Your federal Medigap Open Enrollment Period generally lasts six months beginning when you are both 65 or older and enrolled in Part B. Outside that window, switching into Medigap can involve additional rules and potentially medical underwriting unless a guaranteed-issue right or state protection applies.
This distinction matters particularly for the millions losing Medicare Advantage plans. People whose Medicare Advantage plans are terminated can qualify for special enrollment protections, including certain federal guaranteed-issue rights for Medigap. KFF notes that beneficiaries losing their Advantage plan because it is terminated can obtain Medigap without being denied or charged more because of a pre-existing condition, provided the applicable requirements and deadlines are followed.
That can create an unusual opportunity for someone who previously wanted to move to Original Medicare with Medigap but was worried about underwriting. Anyone receiving a plan termination notice should investigate those rights before automatically enrolling in another Advantage plan.
Your Annual Notice of Change Matters More Than Ever
One of the easiest ways to make a costly Medicare mistake is to assume that because a plan worked in 2026, it will work the same way in 2027. Medicare Advantage and Part D plans can change premiums, formularies, copayments, benefits, networks, and service areas each year.
The Annual Notice of Change explains what will be different. It may not be exciting reading, but it deserves more attention than almost any advertisement arriving during Medicare enrollment season. A few pages can reveal that a $0 premium remained unchanged while specialist copays, drug coverage, or other expenses moved significantly.
Your comparison should then be personalized. Check every important physician, your preferred hospitals, each prescription, your pharmacy, the plan’s out-of-pocket maximum, and the benefits you genuinely use. Do not assume a plan remains competitive simply because the company name has not changed.
The Most Important Medicare Number in 2027 May Not Be the Premium
Medicare is becoming more complicated because costs are moving around rather than simply rising in one obvious place. Average Medicare Advantage premiums are projected to fall. Average stand-alone drug premiums are expected to move only slightly higher. Yet Part B costs are expected to increase, Medigap premiums can continue rising, millions of private Medicare plans are disappearing, and cost-sharing rules can change underneath apparently inexpensive coverage.
That means the headline premium tells only a fraction of the story. A $0-premium Medicare Advantage plan can be a good value for the right beneficiary, just as paying considerably more for Original Medicare plus Medigap can make sense for someone who prioritizes broad provider access and predictable medical expenses. The decision depends on what you receive for the total amount you could potentially spend.
You cannot control healthcare inflation, Medicare fraud, insurance-company decisions, or future government policy. You can control whether you review your coverage before December 7, understand your total potential costs, verify doctors and prescriptions, and compare alternatives before allowing a plan to automatically renew. In 2027, that annual review may be more valuable than ever.
