As Medicare’s open enrollment period for 2027 gets underway, Medicare beneficiaries have an opportunity to examine their coverage options and make changes. For Medicare Part D prescription drug coverage, the average beneficiary has 28 Medicare Advantage prescription drug plans (MA-PDs) and 9 stand-alone prescription drug plans (PDPs) to choose from, with varying costs associated with these different options. This analysis examines premiums and cost-sharing requirements for Part D coverage in 2027 and how these costs have changed over time, based on Medicare plan landscape and benefits data from the Centers for Medicare & Medicaid Services (CMS).

Takeaways

• The estimated average enrollment-weighted monthly premium for Medicare Part D stand-alone PDPs is projected to be $51 in 2027, a 50% increase from $34 in 2026 (based on June 2026 enrollment), assuming current enrollees keep their same plan for 2027. While CMS projected a modest $1 increase in the national average premium, from $35 to $36 (based on September 2026 enrollment), they did not explain the method used in the calculation. It’s possible CMS assumed switching to lower-cost plans, which would produce a lower enrollment-weighted average premium for 2027 than our estimate of $51, and it is likely that the actual average PDP premium for 2027 will be lower than $51 after accounting for plan choices by new enrollees and switching by current enrollees during open enrollment. If PDP enrollees who are not receiving Part D Low-Income Subsidies (LIS) keep their current plan in 2027, more than half (55% or 7.5 million) will pay premiums of less than $20 per month but nearly 30% (3.9 million) will pay at least $100 per month.
• Monthly premiums for drug coverage are estimated to be more than 5 times higher for PDPs compared to MA-PDs in 2027 – $51 versus $9. The average monthly Part D premium is projected to increase by $17 for PDPs but by less than $2 for MA-PDs. MA-PD sponsors can use rebate dollars from Medicare payments to buy down their Part D premiums, as well as provide extra benefits, but these funds are not available to sponsors for PDPs. The MA-PD premium is also heavily weighted by zero premium plans, with nearly 8 in 10 MA-PD enrollees paying no premium for drug coverage in 2026.
• Three-fourths of PDP enrollees without low-income subsidies (76% or 10.4 million) will pay a higher monthly premium in 2027 if they make no changes during open enrollment, compared to 56% of enrollees who faced a higher premium for their plan in 2026. This includes 4.1 million PDP enrollees without LIS who are enrolled in zero premium PDPs in 2026 and who will face higher premiums next year because no zero premium PDPs are available in 2027. Among the 10.4 million PDP enrollees facing a premium increase, 2.4 million will see their monthly premium increase by more than $50 if they stay in their same plan for 2027. By comparison, only 38,000 enrollees faced a premium increase larger than $50 per month in 2026. The Trump administration’s decision to discontinue the Part D Premium Stabilization Demonstration after 2026 ended the additional premium subsidies that were provided to PDP sponsors and the cap on the maximum allowable monthly PDP premium increase, which was set at $50 for 2026. (Monthly premiums could increase by more than $50 in 2026 for PDPs that did not participate in the demonstration.)
• Average monthly premiums for the 8 national PDPs are projected to range from around $6 to $204 in 2027. Among national PDPs, the two lowest-premium plans are Centene’s Wellcare Value Script Rx, an enhanced PDP with an average premium of $6.50 for 2027 (up from $5.80 in 2026) and Wellcare Classic, a basic PDP with an average premium of $10.90 for 2027 (up from $8.60 in 2026). The national PDPs with the highest average monthly premiums are United’s AARP Medicare Rx Preferred ($204.50, up from $126.00 in 2026) and Humana Premier Rx Plan ($137.40, up from $119.60 in 2026).
• Most Part D enrollees will face a deductible for drug coverage in 2027, including 85% of MA-PD enrollees (up from 80% in 2026) and virtually all PDP enrollees (99.8%, up from 96% in 2026), based on current enrollment. The average Part D deductible in 2027 will be $643 for PDP enrollees (up from $540 in 2026) and $489 for MA-PD enrollees (up from $360 in 2026). The standard Part D deductible in 2027 is $700, up from $615 in 2026.
• Most Part D enrollees will face coinsurance rather than copayments for both preferred brands and non-preferred drugs, which can mean less predictable out-of-pocket costs. For preferred brands, most MA-PD enrollees (83%) will face median coinsurance of 20%, and virtually all PDP enrollees (99.8%) will face median coinsurance of 25%. For non-preferred drugs, 89% of MA-PD enrollees will face median coinsurance of 29% and all PDP enrollees will face median coinsurance of 35%. For 2027, the 50% of PDP enrollees enrolled in Centene’s Wellcare PDPs will face coinsurance of 15% for drugs on a new injectable drug tier. For specialty tier drugs (those that cost more than $1,080 per month), median coinsurance will be 25% for PDP enrollees and 26% for MA-PD enrollees.

Premiums

The Average Monthly Premium for Medicare Part D Stand-Alone PDPs Is Projected to Be $51 in 2027, a 50% Increase From $34 in 2026, Based on Current Enrollment

If PDP enrollees keep their current plan, the average monthly PDP premium will increase from $34 in 2026 to $51 in 2027. While CMS projected a modest $1 increase in the national average premium (from $35 to $36, based on September 2026 enrollment), they did not explain the method used in the calculation. It’s possible CMS assumed switching to lower-cost plans, which would produce a lower enrollment-weighted average premium for 2027 than our estimate of $51. After accounting for plan choices by new enrollees and switching by current enrollees during open enrollment, it is likely that the actual average PDP premium for 2027 will be lower than $51 (Figure 1).

For comparison, at the beginning of open enrollment in October 2025, the average monthly premium for PDP coverage was estimated to increase from $37 in 2025 to $44 for 2026, based on enrollment at that time, but after accounting for changes during open enrollment, the actual weighted average premium in 2026 was $34, as existing enrollees switched to and new enrollees joined lower-premium plans.

If the 13.6 million PDP enrollees without Part D Low-Income Subsidies (LIS) in 2026 keep their current plan for 2027, more than half (55% or 7.5 million) will pay premiums of less than $20 per month, but none will pay zero monthly premium and nearly 30% (3.9 million) will pay $100 per month or more. In 2026, 30% of these enrollees are paying zero monthly premium and 20% are paying $100 per month or more (Figure 2).

PDP Enrollees Will Pay Higher Monthly Premiums Than MA-PD Enrollees in 2027 – an Estimated $51 versus $9, on Average

The estimated average monthly PDP premium for 2027 is more than 5 times larger than the average monthly premium for drug coverage in MA-PDs - $51 versus $9 (Figure 3). Between 2026 and 2027, the average monthly premium is increasing by $17 (50%) for PDPs and $2 (20%) for MA-PDs. MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums and offer extra benefits, but there is no equivalent rebate system for PDPs. According to MedPAC, Medicare Advantage monthly rebates per enrollee have more than doubled since 2018, from $95 to $199 in 2026, and of the $199 total monthly rebate amount in 2026, $51 was used to reduce MA-PD Part D premiums. The MA-PD premium is also heavily weighted by zero premium plans, with nearly 8 in 10 MA-PD enrollees paying no premium for drug coverage in 2026.

Three-Fourths of PDP Enrollees Without Low-Income Subsidies Will See an Increase in Their Monthly Premium in 2027 if They Make No Changes During Open Enrollment

Out of 13.6 million PDP enrollees without LIS in 2026, 10.4 million (76%) will pay a higher monthly premium in 2027 if they keep their current plan. This includes 4.1 million enrollees in PDPs that charge no monthly premium in 2026, who will pay higher premiums in 2027 because there are no zero premium PDPs available in 2027. Of the 10.4 million non-LIS PDP enrollees facing higher premiums for their current plan, 2.4 million will see their monthly premium increase by more than $50 if they stay in their same plan for 2027. Among the 24% (3.2 million) of non-LIS PDP enrollees facing a premium reduction, most (2.6 million) will see a decrease of $5 or less (Figure 4).

By comparison, 56% of PDP enrollees were facing a premium increase for their same plan for 2026, but less than 1% (38,000 enrollees) faced a premium increase larger than $50 per month. The Trump administration’s decision to discontinue the Part D Premium Stabilization Demonstration after 2026 ended the additional premium subsidies that were provided to PDP sponsors and the cap on the maximum allowable monthly PDP premium increase, which was set at $50 for 2026. (Monthly premiums could increase by more than $50 for PDPs that did not participate in the demonstration.)

Average Monthly Premiums for the 8 National PDPs Are Projected to Range from Around $6 to $204 in 2027

Part D premiums for 2027 vary widely across plans, as well as across regions for the same plan, as in previous years (Figure 5). Among the 8 PDPs that will be available in all 34 PDP regions in 2027, the two lowest-premium plans are Centene’s Wellcare Value Script, an enhanced PDP with an average premium of $6.50 for 2027 and Wellcare Classic, a basic PDP with an average premium of $10.90 for 2027. Both PDPs were available for zero monthly premium in many areas in 2026, but no zero premium PDPs are available in 2027. Among the most expensive national PDPs are United’s AARP Medicare Rx Preferred and Humana Premier Rx Plan, with average monthly premiums for 2027 of $204.50 and $137.40, respectively.

Monthly premiums for several national PDPs vary widely around each plan’s average. For 6 of the 8 national PDPs, there is a difference of $90 or more across the 34 PDP regions between the plan’s lowest and highest premiums. For example, the average monthly premium for AARP Medicare Rx Preferred is $204, but ranges from $136.70 to $264.50 across regions. The monthly premium for AARP Medicare Rx Saver averages $98 but ranges from $10.30 to $235.30 across regions. And for Humana Basic Rx, the average premium is $16 but ranges across regions from $6.30 to $169.60.

Medicare Part D enrollees in national PDPs will face a range of premium changes if they keep their current plan in 2027. Enrollees in United’s AARP branded PDPs face significant premiums increases if they don’t switch plans for 2027 - $78.50 for AARP Medicare Rx Preferred (a 62% increase) and $48.10 for AARP Medicare Rx Saver (a 97% increase) (Figure 6).

Deductibles and Cost Sharing

Most Part D Enrollees Will Pay a Drug Deductible in 2027, Including 85% of MA-PD Enrollees and Virtually All PDP Enrollees

The share of MA-PD enrollees in plans that charge a deductible for Part D coverage will increase from 80% in 2026 to 85% in 2027 if they do not switch plans. Nearly all stand-alone PDP enrollees (99.8%) will also be enrolled in plans that charge a deductible for drug coverage in 2027, up from 96% in 2026 (Figure 7). (Some enrollees in these plans receive low-income subsidies that cover their deductible.)

The weighted average Part D deductible in 2027 will be $643 for PDP enrollees and $489 for MA-PD enrollees (the standard Part D deductible is increasing from $615 in 2026 to $700 in 2027). Although the average Part D deductible is higher for PDP enrollees, MA-PD enrollees are facing a larger increase in the average deductible than PDP enrollees between 2026 and 2027 – an increase of $128 (36%) for MA-PD enrollees versus $103 (19%) for PDP enrollees (Figure 8).

Most Part D Enrollees Will Face Coinsurance Rather Than Copayments for Preferred Brands and Non-Preferred Drugs in 2027

Part D enrollees face much higher cost-sharing amounts for brands and non-preferred drugs (which can include both brands and generics) than for drugs on a generic tier, and most Part D enrollees face coinsurance rather than copayments for drugs on formulary tiers other than generics. Coinsurance can mean less predictable out-of-pocket costs than copayments. The typical five-tier formulary design in Part D includes tiers for preferred generics, generics, preferred brands, non-preferred drugs, and specialty drugs.

Most Part D enrollees now face coinsurance for both preferred brands and non-preferred drugs, with the share of MA-PD enrollees facing coinsurance for preferred brands increasing from 54% in 2026 to 83% in 2027, and 89% of MA-PD enrollees facing coinsurance for non-preferred drugs, similar to 2026. Nearly all PDP enrollees will face coinsurance for preferred brands and non-preferred drugs in 2027, the same as in 2026.

Among all Part D plans, median standard cost sharing in 2027 for different types of drugs is (Figure 9):

• Generics: For preferred generics, enrollees face copayments of $4 in PDPs and $0 in MA-PDs, and for other generics, copayments of $20 in PDPs and $5 in MA-PDs.
• Preferred brands: For preferred brands, virtually all PDP enrollees face a median coinsurance of 25%; 83% of MA-PD enrollees face a coinsurance of 20% and 17% face a median copayment of $47.
• Non-preferred drugs: For non-preferred drugs, which can include both brands and generics, all PDP enrollees face a median coinsurance of 35%; 89% of MA-PD enrollees face a median coinsurance rate of 29% and 11% of MA-PD enrollees face a median copayment of $100.
• Specialty drugs: Median coinsurance for specialty drugs is 25% for PDP enrollees and 26% for MA-PD enrollees.

Part D enrollees in the PDPs that were available on a national basis in 2026 face median copayments ranging from $0 to $5 for preferred generics in 2027, while median copays for drugs on the standard generic tier will range from $1 to $20 (Figure 10). Median coinsurance ranges from 16% to 25% for preferred brands; from 30% to 50% for non-preferred drugs, and from 25% to 30% for specialty drugs. New for 2027, Centene has added an injectable drug tier with coinsurance of 15% and combined the two generics tiers into one for its Part D plans, with a copayment of $20 in its two Wellcare PDPs.

In this JAMA Health Forum post, KFF’s Larry Levitt explains how proposals to create Medicare-for-All promise more generous benefits than the existing Medicare program, with no premiums or cost-sharing, but could end up looking more like Medicare if it became the subject of a serious national debate about the tradeoffs involved to implement it.

As of October 28, 2026, 11 carriers have announced that they will exit the ACA Marketplaces in plan year 2027, either in some or all states that they are currently offering plans; seven carriers have announced they will enter new state Marketplaces. These changes in insurer participation follow the expiration of the enhanced premium tax credits at the end of 2025, which drove sign-ups to fall by over a million from the 2025 to 2026 Open Enrollment Periods—with further membership declines in the ACA Marketplaces expected as the year progresses. ACA Marketplace enrollment declines affect the size of the potential market for insurers, and, potentially, the risk pool—to the extent that healthier than average enrollees are more likely to drop coverage.

As people leave the Marketplace, insurers may reassess the profitability of their Marketplace participation and decide to pull out in the future. Cigna has decided to leave the individual market in 2027 to focus on other segments given the lack of potential to grow their ACA Marketplace business. Cigna, which reported first-quarter on-exchange enrollment of over 350,000 individuals, will exit the 11 states in which it currently participates both on- and off-exchange. In some cases, multiple insurers are announcing exits in the same state. In some states, with fewer insurers participating in the ACA Marketplaces, remaining insurers will have less competition and consumers will be left with fewer choices.

Health insurance is expensive and can be difficult to afford for people with lower or moderate incomes. The Affordable Care Act (ACA) provides sliding-scale subsidies that lower premiums and requires that insurers offer plans with reduced out-of-pocket (OOP) costs for eligible individuals purchasing their own health coverage.

This brief provides an overview of the financial assistance provided under the ACA for people purchasing coverage on their own through health insurance Marketplaces (also called exchanges).

Health Insurance Marketplace Subsidies

There are two types of financial assistance available to Marketplace enrollees. The first type, called the premium tax credit, reduces enrollees’ monthly payments for insurance coverage. The second type of financial assistance, the cost-sharing reduction (CSR), reduces enrollees’ deductibles and other out-of-pocket costs when they go to the doctor or have a hospital stay. To receive either type of financial assistance, qualifying individuals and families must enroll in a plan offered through a health insurance Marketplace.

Premium Tax Credits

Premium tax credits can be applied to Marketplace plans in any of four “metal” levels of coverage: bronze, silver, gold, and platinum. Bronze plans tend to have the lowest premiums but have the highest deductibles and other cost sharing, leaving the enrollee to pay more out-of-pocket when they receive covered health care services, while platinum plans have the highest premiums but very low out-of-pocket costs.

Also offered on the Marketplace are catastrophic health plans, which can have even lower premiums and higher cost sharing compared to bronze plans. Catastrophic plans are generally only available to individuals younger than 30, and premium tax credits cannot be applied to these plans.

Who is eligible for the premium tax credit?

To receive a premium tax credit for 2027 coverage, a Marketplace enrollee must meet the following criteria:

• Have a household income at least equal to 100% of the Federal Poverty Level (FPL) but not more than 400% FPL. Incomes for the 2027 benefit year are determined by 2026 poverty guidelines (Table 1). From 2021 through the end of 2025, the American Rescue Plan Act and the Inflation Reduction Act expanded eligibility for premium tax credits to Marketplace enrollees making above 400% of poverty. This was temporary and expired at the end of 2025.
• Not have access to an employer plan (including a family member’s employer) that both meets minimum value and is considered affordable. For 2027, the threshold that determines if an employer plan is affordable is if the premium is equal to or less than 10.22% of one’s household income.
• Not be eligible for coverage through Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).
• Have U.S. citizenship, lawful permanent resident (LPR or Green Card holder), Cuban or Haitian entrant, or Compact of Free Association (COFA) migrant.
• If married, must file taxes jointly.

Income: For the purposes of the premium tax credit, household income is defined as the Modified Adjusted Gross Income (MAGI) of the taxpayer, spouse, and dependents who are required to file a tax return. The MAGI calculation includes income sources such as wages, salary, foreign income, interest, dividends, and Social Security.

Employer coverage: Employer coverage is considered affordable if the required premium contribution is no more than 10.22% of household income in 2027. The Marketplace will look at both the required employee contribution for self-only and (if applicable) for family coverage. If the required employee contribution for self-only coverage is affordable, but the required employee contribution is more than 10.22% of household income for family coverage, the dependents can purchase subsidized exchange coverage while the employee stays on employer coverage.

The employer’s coverage must also meet a minimum value standard that requires the plan to provide substantial coverage for physician services and for inpatient hospital care with an actuarial value of at least 60% (meaning the plan pays for an average of at least 60% of all enrollees’ combined health spending, similar to a bronze plan). To be ACA-compliant, the plan must also have an annual OOP limit on cost sharing of no more than $12,000 for self-only coverage and $24,000 for family coverage in 2027.

People who are offered employer-sponsored coverage that fails to meet either the affordability threshold or minimum value requirements can qualify for Marketplace subsidies if they meet the other criteria listed above.

Eligibility for Medicaid: In states that have expanded Medicaid under the ACA, adults earning up to 138% FPL are generally eligible for Medicaid and not for Marketplace subsidies. In states that have not adopted Medicaid expansion, adults with income as low as 100% FPL can qualify for Marketplace subsidies. However, those with incomes lower than 100% FPL are generally not eligible for tax credits or Medicaid unless they meet other state eligibility criteria. KFF estimates that 1.2 million Americans living in non-expansion states fall into this coverage gap, where they are eligible for neither Medicaid nor Marketplace subsidies.

Immigration status: As a result of the 2025 budget reconciliation law, lawfully present low-income immigrants who are ineligible for Medicaid, often because they have resided in the U.S. for less than five years, will not qualify for tax credits starting in the 2026 plan year. Beginning in 2027, only people with certain immigration statuses can qualify for Marketplace financial assistance. They include Lawful Permanent Residents (including Green Card holders), Cuban or Haitian entrants, and Compact of Free Association (COFA) migrants. Other immigration statuses may be eligible for Marketplace coverage but not premium tax credits.

Immigrants who do not hold an eligible immigration status, including DACA recipients, cannot enroll in health insurance through the Marketplace, receive tax credits through the Marketplaces, or enroll in non-emergency Medicaid and CHIP.

What amount of premium tax credit is available?

The premium tax credit limits an individual’s contribution toward the premium of the “benchmark” plan, the second-lowest cost silver plan in their Marketplace. This “required individual contribution” is set on a sliding income scale. In 2027, for individuals with income below 133% FPL, the required contribution is 2.15%, while at an income between 300% to 400% FPL, the required contribution is 10.22% of household income (Table 2). People with incomes above 400% FPL are not eligible for premium tax credits.

In 2021, enhanced premium tax credits were introduced temporarily by the American Rescue Plan Act, expanding eligibility for premium assistance to people with higher incomes and increasing the amount of financial assistance for lower-income people who were already eligible. These enhanced tax credits were extended by the Inflation Reduction Act but expired at the end of 2025. While in effect, Marketplace enrollees with incomes up to 150% FPL were eligible for a benchmark silver plan with no monthly premium payment. The required premium contribution level was also capped at no more than 8.5% of income for enrollees with household incomes above 400% FPL, gradually phasing out at higher incomes. With the expiration of the enhanced premium tax credits, there is no longer a cap on what enrollees with incomes above 400% FPL pay, so they face the full cost of an unsubsidized premium. Between 2025 and 2026, average premium payments increased by 58% and average deductible increased by 37% (about $1,000) as many enrollees moved to higher-deductible plans to offset steep premium payments.

The amount of tax credit is calculated by subtracting the individual’s required contribution from the actual cost of the “benchmark” plan. So, for example, if the benchmark plan costs $6,000 annually, the required contribution for someone with an income of 133% of FPL ($21,227 in 2027), is 3.23% of $21,227 or $686, resulting in an annual premium tax credit of $5,314. If that same person’s income equals 250% FPL (or $39,900 in 2027), the individual contribution is 8.66% of $39,900 or $3,455 per year, resulting in an annual premium tax credit of $2,545.

The premium tax credit can then be applied toward any other plan sold through the Marketplace (except Catastrophic coverage). The amount of the tax credit remains the same, so a person who chooses to purchase a plan that is more expensive than the benchmark plan will have to pay the difference in cost. Conversely, if a person chooses a less expensive plan, such as the lowest-cost silver plan or a bronze plan, the tax credit will cover a greater share of that plan’s premium, and possibly even cover the entire cost, leaving the consumer with a zero-premium plan. When the tax credit exceeds the cost of a plan, it lowers the premium to zero, and any remaining tax credit amount is unused.

For certain components of a Marketplace plan premium, the premium tax credit will not apply. First, the tax credit cannot be applied to the portion of a person’s premium attributable to covered benefits that are not essential health benefits (EHB). For example, a plan may offer adult dental benefits, which are not currently included in the definition of EHB. In that case, the person would have to pay the portion of the premium attributable to adult dental benefits without financial assistance. In addition, the ACA prohibits applying premium tax credits to the portion of premiums covering “non-Hyde” abortion benefits. Marketplace plans that cover abortion are required to charge a separate $1 monthly premium to cover the cost of this benefit; this means a consumer who is otherwise eligible for a fully subsidized, zero-premium policy would still need to pay $1 per month for a policy that covers abortion benefits. Finally, if the person smokes cigarettes and is charged a higher premium for smoking, the premium tax credit is not applied to the portion of the premium that is the tobacco surcharge.

How do people receive the premium tax credit?

To receive the premium tax credit, people must apply for coverage through the Marketplace and provide information about their age, address, household size, citizenship status, and estimated income for the coming year. After submitting the application, people will receive a determination letting them know the amount of premium tax credit for which they qualify. The consumer then has the option to have the tax credit paid in advance, claim it later when they file their tax return, or some combination of the two options.

The advance premium tax credit (APTC) option allows consumers to have 1/12 of their tax credit paid directly to their Marketplace plan insurer each month, reducing the monthly amount the consumer owes. However, because the APTC eligibility determination is based on estimated income, the enrollee is required to reconcile their APTC at tax time the following year, once they know what their actual income was. For people receiving an advance payment of the premium tax credit in 2027, the reconciliation would occur when they file their 2027 tax return in 2028. If the consumer overestimated their income when they applied, they can receive the unclaimed premium tax credit as a refundable tax credit when they file.

Previously, lower-income consumers who underestimated their income at the time of application and excess APTC was paid on their behalf during the year would repay some of the excess tax credit when they file, while consumers over 400% FPL were required to repay the entire amount of excess tax credit. Beginning in tax year 2026, all consumers who underestimate their income are required to repay all excess APTC that was paid on their behalf, as repayment caps were eliminated by the 2025 federal budget reconciliation law (“The One Big Beautiful Bill Act”).

Alternatively, people can opt to pay their entire premium costs each month and wait to receive their tax credit until they file their annual income tax return the following year, although most Marketplace participants cannot afford this option. The premium tax credit is refundable, meaning it is available to qualifying enrollees regardless of whether they otherwise owe any federal income tax. Everyone who receives an APTC in a tax year is required to file a tax return for that year in order to continue receiving financial assistance in the future.

Cost-Sharing Reductions

The second form of financial assistance available to Marketplace enrollees is a cost-sharing reduction. Cost-sharing reductions lower enrollees’ out-of-pocket cost due to deductibles, copayments, and coinsurance when they use covered health care services.

Who is eligible for cost-sharing reductions?

People eligible for premium tax credits and have household incomes between 100 to 250% of poverty are eligible for cost-sharing reductions.

How are cost-sharing reductions provided?

Unlike the premium tax credit (which can be applied toward any metal level of coverage), cost-sharing reductions (CSR) are only offered through silver plans. For eligible individuals, cost-sharing reductions are applied to a silver plan, which, for people receiving the more generous CSRs, essentially makes deductibles and other cost sharing under that plan more like that under a gold or platinum plan. Individuals with income between 100 and 250% FPL can continue to apply their premium tax credit to any metal level plan, but they can only receive plans with reduced cost sharing if they pick a silver-level plan.

What amount of cost-sharing reductions are available to people?

Cost-sharing reductions are determined on a sliding scale based on income. The most generous cost-sharing reductions are available for people with income between 100 and 150% FPL. For these enrollees, silver plans that otherwise typically have higher cost sharing are modified to be more similar to a platinum plan by substantially reducing the silver plan deductibles, copays, and other cost sharing. For example, in 2026, the average annual deductible under a silver plan was just over $5,300, while the average annual deductible under a platinum plan was $92. Silver plans with the most generous level of cost-sharing reductions are sometimes called CSR 94 silver plans (with 94% actuarial value, which represents the average share of health spending paid by the health plan, compared to 70% actuarial value for a silver plan with no cost-sharing reductions).

Somewhat less generous cost-sharing reductions are available for people with incomes above 150 and up to 200% FPL. These reduce cost sharing under silver plans to 87% actuarial value (CSR 87 plans). In 2026, the average annual deductible under a CSR 87 silver plan was about $800.

For people with incomes above 200 and up to 250% FPL, cost-sharing reductions are available to modestly reduce deductibles and copays to 73% actuarial value (sometimes called CSR 73 plans). In 2026, the average annual deductible under a CSR 73 silver plan was about $3,700.

Insurers have flexibility in how they set deductibles and copays to achieve actuarial value benchmarks set by the ACA for Marketplace plans, including CSR plans, so actual deductibles may vary from these averages.

The ACA also requires maximum annual out-of-pocket spending limits on cost sharing under Marketplace plans, with reduced limits for CSR plans. In 2027, the maximum OOP limit will be $12,000 ($24,000 family) for all QHPs with lower maximum OOP limits permitted under cost-sharing reduction plans (Table 3). Insurers can set lower out-of-pocket maximums.

The Health Policy Agenda and Where Chronic Illness Fits

A long time ago in government, I was described in a major newspaper as “a nice guy trapped in a deadly serious face.” So, I hope it shines through the mask what a special privilege it is to be the first Victor Dzau Keynote speaker this year. Victor has always led with science, values, transparency and tremendous honor.

He led through a transition from IOM to NAM that I was on the other side of, feeling it was a mistake for IOM to lose control of so many of its substantive programs, even co-authoring a dissenting report when I was on the Governing Council, but I have nothing but admiration for how Victor has guided us through the changes, and now we have superb new leadership at the Academy, which we just witnessed in action.

I have transitions on my mind, making my own after 37 years since founding KFF.

A million years ago, when I received a PhD in political science at MIT, I received a note from my 96-year-old grandmother which simply said: “Congratulations, so what are you going to do, open a political science store?” Those of you who know KFF know I sort of did. I started what is now KFF back in the early 1990s based on a simple idea: Health was becoming a bigger issue and the country would need a trusted independent source for health policy information. We do that by doing lots of policy analysis, polling and survey research, and through our newsroom, now the largest health newsroom in the country, with bureaus across the U.S. We are not a policy research shop, although we do tons of policy research. We are not a polling organization, although we are well known for that. Nor are we a news organization. We are a “unicornish” combination of all three, and it’s the combination of all three, coordinated and focused on the same issues, that gives us the power and presence to play our national role and reach the different audiences we want to reach. For those of you who may remain confused about this: We do not have and never have had any connection to Kaiser Permanente, and we are not a foundation. We are a public charity – or endowed nonprofit – based in San Francisco.

One important thing about us is that we never take positions or make recommendations, but I certainly understand that data and analysis are not neutral in national health policy. In fact, we are built to annoy all sides at one time or another, and we do.

Big health policy debates come in cycles and health policy is heating up again, driven by voter concern about cost of living and health care costs, the midterms, wins by progressive Democrats pushing more expansive reform ideas again (whether they go anywhere or not), controversial administration policies, and much more. They will continue to grow through 2028 and a potentially big legislative agenda beyond. Today, I want to talk about a few of the biggest challenges we face in health policy, and how your topic today –  chronic illness – is central to them, obviously viewed through the lens of a hard-core health policy organization. I recognize that there are lots of different folks here with different perspectives and NAM has its own priorities, and I have no quarrel with that. There will be overlap, but we are a different animal in health policy.  

There are three problems I want to talk about:

• Rebuilding Medicaid and Affordable Care Act (ACA) coverage after almost a trillion dollars in cuts in federal spending in the two programs over the next 10 years, the largest cuts in coverage and federal health spending in our history.
• Reconstructing federal agencies – a task which is receiving inadequate attention and will mean daunting decisions about funding, staffing, and most challenging of all – redesigning what agency missions should be. Lest we forget, nobody was happy with the primary Health and Human Services (HHS) agencies before, but we are so unhappy with the state of affairs now we forget that.
• And third, there is a new zeal to take on health care costs. But what do we even mean by that? Have we discovered the courage we never had before to do it, and, in particular, to take on underlying costs driven mostly by hospital spending and high prices?
• Finally, a bonus theme: we can’t deal effectively with any of this unless we make some progress restoring trust in evidence and facts, and the people and institutions that convey them, especially government scientific agencies. I am more optimistic than many people about this big challenge based on our survey data, and I will touch on that.

Two points weave in and out: 1) these challenges will compete for space on the agenda and funding. No president, secretary, or new Congress will take them all on simultaneously in a meaningful way and 2) I have written often, there is an invisible crisis of costs and affordability affecting the chronically ill and people with major diseases. And I don’t use the over-used word “crisis” lightly. It’s why I am so pleased with your focus today.

To start…

The One Big Beautiful Bill (OBBB) included almost a trillion dollars in cuts in federal health spending over ten years. Then, following on the heels of that, was the failure to extend the ACA enhanced premium tax credits, which our widely cited analysis showed, on average, doubled premiums for almost 24 million enrollees, leading millions to drop coverage and driving many more into plans with big deductibles averaging 7k a year. Effectively that’s not insurance if you drive an Uber or work in hair salon or work on a farm and make, say, 35k a year. (Fun KFF fact: 1/3 of farmers and ranchers get their coverage through the Marketplaces.)

All told, estimates are that these cuts will result in about 14 million more uninsured people over the decade, reversing progress made in recent years and bringing the number of uninsured back up to close to 40 million. But that’s not the only effect.

As a former state Human Services Secretary, I can tell you that states will try to replace some but far from all of these cuts, especially blue states. When they do, something else in the state budget will have to give. It may be education or higher education or environmental protection or corrections. Few to none will raise taxes.

The single biggest cut—330 billion over 10 years—comes from the Medicaid work requirements, a popular but highly questionable policy.

• It’s popular because Americans love the idea of work and personal responsibility. Medicaid work also draws on a conservative view of Medicaid dominating current policy as a “welfare program,” a dividing line between Rs and Ds. Seventy-four percent of Democrats see Medicaid as a “government insurance program for low-income people.” By contrast, more than half or Republicans see it as “a welfare program.” If you view it as welfare, like cash assistance, you are likely to want to impose requirements to get it and cut it if you can. If you view it as “insurance,” you want to protect it and expand it if you can. The difference in underlying views is fundamental.  
• I was a leader in the welfare reform movement many years ago as state human services secretary, actually for a Republican governor. I can’t stress enough how different this is from what I thought I was doing then. Welfare reform then was built on what Bill Clinton called a “reciprocal obligation.” Beneficiaries were asked to take steps towards self-sufficiency and government committed new resources to help them do that, for job training and childcare, job search and more. In my state, that meant historic new commitments to childcare and other employment-related supports. In “Medicaid work,” only the beneficiary has an obligation. That’s one reason why CBO says it produces no new work. Let me repeat that, NO new employment gains – only red tape that forces people off the rolls (5 million more uninsured says CBO). It’s a popular policy that’s a huge administrative lift for any governor, which doesn’t produce work but is popular because it sounds like it promotes work and personal responsibility.

A Second Big Challenge Is Rebuilding the Federal Agencies

I was a young academic at MIT when I got a job working for the head of what is now CMS, an agency I was later asked to run. It changed my career and my life, which became all about public service, whether in the public or nonprofit sectors. Can that happen anymore? How do we revitalize rather than demonize public service? What does it mean that 60% of the graduates of the Kennedy School go to big consulting firms (the last time I looked)?

I don’t need to tell this audience about the staffing cuts in the federal agencies, the dismantling of agencies of special relevance to this audience such as AHRQ, the warping of missions and science, including jarring recent reports from research arms of HHS asserting that enrollees dropping coverage all did so because they were there fraudulently. I have had hundreds of calls from expats from HHS looking for help and so have many of you.

Interestingly, by far the largest of the agencies in terms of budget, CMS, protected by Dr. Oz, has been largely immune from the storms that have swept through other agencies caught up in the science and culture wars.

I don’t want to present a lot of data about staffing cuts, and a lot of it is fluid and unreliable or from advocacy groups. To me, these are the critical points:

• It will take a Marshall Plan to rebuild the HHS agencies
• No secretary will be able to do it and do everything else he or she needs to do. (I know how daunting it will be. I have been offered that job too and looked it in the eye.)
• If plans are not made ahead of time, it will be two years into an administration before much is done, and that could be too late; likewise if it is done agency head and agency by agency over time
• For those reasons, it would be timely for some distinguished nonpartisan group (KFF, NAM, a new commission funded by foundations) to take this on now. If I were a Secretary, I would appoint, in effect, a reconstruction czar, who would focus solely on plans and proposals for the reconstruction of CDC, FDA, the PHS agencies and NIH, including mission, staffing and funding.
• How to formulate an updated commitment to equity across HHS will by itself be a daunting challenge, but it must be done.  

This is a tough one because no candidate will run on restoring federal agencies, but this audience understands how essential it is.  

Third, there is a new zeal to take on health care costs. But what do we even mean by that? At all the conferences I speak at, I find that we are often talking past each other as if we operate in a Venn Diagram with sets that only somewhat overlap and often conflict. Often in my world, we are talking about federal health spending. Cutting that often puts pressure on a different problem we sometimes talk about, state health spending. Employers are entirely concerned about their annual premium increases, and they should be. Our annual survey shows the average cost of a family policy is now almost $28,000 a year, the equivalent of buying a Toyota Corolla each year. Then there is “value” – a concept which encompasses at one and the same time the most forward-looking reforms in payment and delivery and the most backward rear-guard actions to forestall either real market competition or government regulation that might address underlying costs. In general, beware of any idea that is popular with everyone.

Then there are the two really big cost problems.

There is the one experts have always cared about most, national health care spending, measured as the share of GDP we spend on health care or per capita health spending. For reasons we debate endlessly in my world, health care as a share of GDP, long predicted to blow through 20% of GDP, has been pretty stable for a long time at about 18%. That’s much higher than other wealthy nations but reasonably stable. It’s predicted to rise more sharply again, and the main culprit as always is our high prices, which we don’t deal with much, focusing more on volume and utilization in bits and pieces.

And then there is the cost problem, which is driving the rising concern about health care nationally and has made health care a political issue. It’s none of the above; its “affordability” – the cost of health care to people. That—and only that—is what has made health care a voting issue.

• If you look at the polls, the economy always emerges as the voters’ top concern. So, in our monthly tracking poll, we asked voters and I paraphrase: You said the economy was your top worry, what about the economy worries you the most? Health care costs were at the top of the list, ahead of the cost of food, housing, and even gas prices.
• Assuming gas prices would eventually eclipse health care, we continue to ask every month and health care costs have remained number one, just ahead of gas prices, until tying with them recently.
• But they are all closely clumped together, and it makes sense that health care costs are a top “worry” since they are less predictable than some other costs. The uncertainty makes people worry about it more.
• The best way to understand this: voters see health care costs as one dimension of a set of inter-related cost-of-living concerns they are concerned about. It’s not number one, two or three…it’s all one concern.
• While I am talking about the midterms, it’s also useful to always remember that issues are only one factor that drive votes. Think about your own vote. Partisan affiliation matters. The candidates and voters’ feeling about them matter a lot. Their feelings about the mood and direction of the nation and about President Trump matter (especially for turnout).  All these things matter more than issues and a lot more than candidates’ policy plans to address issues. Polling assesses these factors as well, but issue rankings tend to get featured the most.  

So, there are six different cost problems – national spending, people’s health costs, federal spending, state spending, employer premiums and value – and often we talk past each other as if they are the same. Often, they conflict: cut federal spending, for example, and you drive up state spending. The real challenge is to take on underlying costs but there is little evidence that the country has the stomach for that, nor do Democrats and Republicans have anything resembling agreement on how to do it except for some incremental measures that will have impact only at the margin. It means aggressively taking on hospital spending either through market forces (tough in a very consolidated industry) or government regulation, which is off the table with Republicans in charge and industry strongly opposed. For at least the next two years we are destined for “small ball” on costs, typically dressed up to sound more impactful than it is. A bright spot now is the action in several states to take on hospital costs.

It Turns Out that Chronic Illness Is at the Heart of the Affordability and the Complexity Problems

• When we do surveys, we generally find that about 25% of the American people have trouble paying their health care bills and skipped or delayed care as a result.
• Partly for this talk, we did a survey of 20,000 people looking at people with chronic conditions and serious illnesses such as asthma, cancer, heart disease, diabetes, and mental health conditions.
• I am not going to give you a lot of numbers without slides, but for people with those conditions, the shares having problems paying their medical bills approach 40%; as many as 59% say they skipped or delayed needed care in the past year; around a quarter said their health got worse as a result; and, around a quarter said they had to cut back on other basic household needs as a result.
• They also get caught in the health care maze more often: between 40 and 50% say their insurance company denied or delayed their care.

You could simply say, sure, of course they have the most problems; they use the most care. You could also say that the most basic obligation of any health system is to take care of people who are sick and we are not doing that. If I leave you with any big message today it is this: the chronically ill are the heart of the health care affordability crisis in the country.

But wait there’s more…

• Again, not surprisingly, but tellingly, the worst thing you can be in our health system is chronically ill AND UNINSURED.
• Among uninsured adults with multiple chronic conditions, 72% had problems paying or were unable to pay their medical bills. Seventy-one percent skipped or delayed needed care.
• Forty-three percent said they got sicker as a result, and half said they had to cut back on other household needs.

To use a technical term, the chronically ill and uninsured are probably the most screwed group of all in our health system, and now with all the cuts, their ranks will grow.

Finally, I don’t believe we can make real progress without dealing with declining trust; in government agencies, the news media, medicine and science.  

We have to have shared trust in information and science. A shared belief that government can make a difference, even if we disagree over how. And a shared understanding that access to affordable health care, and health coverage, make a difference in people’s lives. 

We have polled extensively on this and it has made me somewhat more optimistic. The polling doesn’t show a country drowning in health misinformation and mistrust on social media.

• It shows a small group of hard-core disbelievers, but smallish; just 1% believe all of the vaccine myths, for example.  
• It shows another group who trust the science. Let’s call them the NAM Americans.
• But most Americans are stuck in the middle, uncertain about what is true and who to believe on almost every key question. They have heard the lies, but they don’t necessarily believe them. They say they don’t believe what they see on social media.

They are “up for grabs.” The situation is far from hopeless. A few hundred thousand or even a million posts on social media are NOT the whole country. Usually, its folks reinforcing views they already hold. And the most trusted messengers are still physicians and nurses and pharmacists – MANY OF YOU. It’s up to us to reach the vast majority in the middle and turn this around. Many of us seek discovery or to fill knowledge gaps in our work. We also need to keep people and relevance centered in everything we do.

Thank you very much for having me and for honoring Victor.

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Immigration restrictions and enforcement are central to the Trump administration’s domestic agenda and a focus of debate in the 2026 midterm elections. These policies have ripple effects on health care: immigration-related fears are leading some immigrant families to avoid medical care and drop coverage, including for U.S. citizen children, and visa restrictions could strain a health care workforce that relies on immigrants. Federal law has also narrowed eligibility for health coverage among lawfully present immigrants, and states are responding in different ways.

Overview  

The Trump administration’s immigration policies have several implications for health care. About 50 million immigrants lived in the U.S. in 2024, though that number has since been declining. One in 4 (26%) children has an immigrant parent, and immigrants make up 17% of the health care workforce, including significant shares of physicians and long-term care workers.

Noncitizen immigrants have more limited access to health coverage than citizens. Undocumented immigrants have long been ineligible for federally funded coverage, and the 2025 reconciliation law narrows eligibility for many lawfully present immigrants.

Key Developments  

Immigration Enforcement and Access to Care

The administration has expanded immigration enforcement in communities across the country, not just at the border. In 2025, it rolled back longstanding limits on enforcement in “sensitive locations” like hospitals, schools, and churches. It also began sharing Medicaid data on noncitizen enrollees with the Department of Homeland Security (DHS) for enforcement purposes, a departure from prior policy.

A KFF/New York Times Survey of Immigrants last year found that immigration-related fears are widespread and are affecting immigrants’ health and use of health care, especially among those who are likely undocumented. Fourteen percent of immigrant adults, including nearly half (48%) of likely undocumented adults, say they have avoided seeking medical care since January 2025 because of immigration concerns. About 4 in 10 immigrant adults (41%) say they worry that they or a family member could be detained or deported, up from 26% in 2023. Four in 10 immigrant adults, and nearly 8 in 10 likely undocumented adults, say immigration-related worries have had negative effects on their health.

Public Charge Policy

A new public charge rule, which took effect September 18, 2026, gives immigration officials broad discretion to deny a green card to people they deem likely at any time to depend on income-based government assistance programs, and allows them to consider use of programs previously excluded, including Medicaid and CHIP. The rule will likely increase fears about participating in programs among immigrant families (beyond those directly affected, including U.S. citizen children). KFF estimates that if 10% to 30% of Medicaid and CHIP enrollees in households with a noncitizen disenroll, 1.4 to 4.1 million people could drop coverage, including up to 1.7 million U.S. citizen children.

Immigration Policy and the Health Care Workforce

Visa restrictions could also affect the health care workforce. In September 2025, President Trump raised the H-1B visa fee, which allows workers with specialized skills to work temporarily in the U.S., to $100,000. After a federal court blocked the increase in June 2026, DHS proposed a $103,265 fee per petition, with some exceptions. KFF analysis found new H-1B approvals in health care and social assistance rose about 18% between FY2022 and FY2025. The fee could curb that trend and worsen health care worker shortages.

Health Coverage Restrictions

The 2025 reconciliation law limits Medicaid, CHIP, subsidized ACA Marketplace coverage, and Medicare to a narrower group of lawfully present immigrants, making many others, including refugees and asylees, ineligible. The Medicaid and CHIP restrictions fully took effect on October 1, 2026, and the Marketplace and Medicare restrictions take effect in January 2027. The Congressional Budget Office estimates 1.4 million lawfully present immigrants will become uninsured by 2034 as a result. Some states, including California, New Mexico, New York, and Oregon, are using state funds to cover lawfully present immigrants losing federal eligibility. At the same time, some states, including California, Colorado, DC, Illinois, Minnesota, and Washington, have scaled back or eliminated broader state-funded coverage for immigrants regardless of status due to budget pressures.

Recent Issues and Looking Ahead  

The midterm election outcome could impact immigration policy and the future of the 2025 reconciliation law’s Medicaid and ACA changes; many Democrats have campaigned on reversing those restrictions and reductions more broadly.

Several developments with health care implications are unfolding:

• Enforcement funding: The 2025 reconciliation law provided $170 billion in additional funding for immigration enforcement, including new detention facilities for immigrant children and families.
• Coverage and enrollment: The public charge rule and new Medicaid and CHIP restrictions are likely to lead to drops in coverage among immigrant families because of fear, confusion, or difficulty completing verification requirements.
• Health care workforce: DHS’s proposed $103,265 H-1B fee has not yet been finalized, but its outcome could have ramifications for the health care workforce.

• Census: The administration has proposed excluding many noncitizen immigrants from the 2030 Census count, which could reduce federal funding and shift political representation for states with large immigrant populations.

The Public’s Views  

As voters make their final assessments before they cast their ballots in the midterm election, KFF asked them what issues they want 2026 midterm candidates to prioritize. About a third (35%) of voters said immigration was “extremely important” for candidates to talk about, behind issues like cost of living (62%), health care costs (47%), and fraud in government programs (44%). Voters are divided on which party they think would do a better job on immigration (38% Republicans, 34% Democrats). One in 5 voters overall, including about 3 in 10 independent voters (32%), say they trust neither party to handle immigration.

Meanwhile, a majority of the public (56%) say they are concerned about the Trump administration’s tactics and immigration enforcement activities in or around health care settings. There are stark divides by partisanship on this tactic. Nearly 9 in 10 (86%) Democrats and about 6 in 10 (59%) independents say immigration enforcement activity should not be allowed in or around health care facilities, whereas 6 in 10 Republicans say it should be allowed. Among Republicans on this question, MAGA supporters are much more likely than non-MAGA supporters to say this tactic should be allowed (71% vs. 32%), and 4 in 10 (41%) non-MAGA Republicans say it should not be allowed.

The KFF/AP Rural Voters Survey found that immigration may play a larger role for voters living in rural areas, with nearly half (45%) of rural voters, including 56% of rural Republicans, saying it’s an “extremely important” issue for candidates to discuss. Rural voters largely view legal immigrants and seasonal agricultural workers as important to their local economies, a finding that echoes concerns about rural areas’ reliance on immigrant health care workers, but voters divided in their views of the Trump administration’s immigration policies, with about one-third each saying these policies have had a negative (36%) or a positive (35%) impact on their area, with an additional 3 in 10 (29%) saying it had no impact on their area.

The market for private Medicare plans, including Medicare Advantage and Part D stand-alone prescription drug plans, is dynamic, with plan offerings changing every year. Leading up to the Medicare annual open enrollment period, which began on October 15^th, some insurers announced that they would be reducing the Medicare Advantage plans offered for coverage in 2027. There was also uncertainty about premiums and plan availability in the stand-alone prescription drug plan (PDP) market for 2027 following the Trump administration’s decision to end the Part D Premium Stabilization Demonstration one year early. Using plan data from the Centers for Medicare & Medicaid Services (CMS), we find that 4.3 million Medicare beneficiaries, including 3.1 million Medicare Advantage drug plan enrollees and 1.2 million PDP enrollees, will have their plan terminated at the end of 2026.

Private insurers will terminate the Medicare Advantage prescription drug plans (MA-PDs) of about 3.1 million people on December 31. Most affected beneficiaries – 2.8 million – are in MA-PDs available for general enrollment, while about 300,000 are in Medicare Advantage special needs plan (SNPs), which restrict enrollment to people who are dually eligible for Medicare and Medicaid or who have specific health needs (Figure 1).

MA-PD enrollees in plans that are being terminated must proactively enroll in another Medicare Advantage plan if one is available in their area or they will be switched automatically to traditional Medicare. The 2.8 million individual MA-PD enrollees in terminating plans translates to 14% of all enrollees in MA-PDs available for general enrollment, similar to the share affected by terminations for 2026 (13%), but substantially larger than in the previous year. Among enrollees in SNPs, about 4% will be affected by a plan termination for 2027. KFF has not examined terminations among SNP enrollees in previous years.

Four parent organizations are terminating plans that account for 50% of enrollees who are losing their individual MA-PD plan. Those parent organizations are Humana, Inc. (19% or 530,000 enrollees), UnitedHealth Group (13% or 367,000 enrollees), CVS Health Corporation (9% or 254,000 enrollees), and Aware Integrated, Inc., which sold Blue Cross branded plans in Minnesota (9% or 249,000 enrollees).

People who have their Medicare Advantage coverage terminated will qualify for a special enrollment period for Medigap with guaranteed issue rights, meaning they cannot be denied a Medigap policy or charged more due to a pre-existing condition. Medigap is supplemental coverage that helps beneficiaries pay out-of-pocket costs not covered by traditional Medicare.

About 1.2 million PDP enrollees are in plans that will also be terminated at the end of this year (Figure 1). That translates to 6% of enrollees in PDPs, double the share impacted last year (3%). Most of these enrollees – 81% or 950,000 – are in the SilverScript Choice PDP sponsored by CVS Health that is being terminated in 13 PDP regions for 2027. Another 190,000 enrollees (16%) are in HealthSpring Extra Rx, sponsored by Health Care Service Corporation, which is being terminated in 16 regions. For the remaining 3% of enrollees in terminated PDPs, about 14,000 are in BlueCross Rx Value in South Carolina, while 7,000 are in Blue Rx PDP Complete and 7,000 in Blue Rx PDP Plus, both in Pennsylvania and West Virginia.

These PDP terminations are reflected in a reduction in the number of PDPs available to the average Medicare beneficiary, down to 9 in 2027 from 11 in 2026. More concentrated enrollment in a smaller number of PDPs potentially exposes more PDP enrollees to annual enrollment disruptions as plan availability and premiums change from one year to the next. Enrollees in plans that are being terminated will need to select a new stand-alone PDP to supplement their traditional Medicare or switch to a MA-PD if they want to continue having prescription drug coverage under Medicare Part D.

About 1.4 million Medicare Advantage enrollees are in a plan that is consolidating with another plan offered by the same insurer. These enrollees, who will be moved automatically to the other Medicare Advantage plan, include 500,000 Medicare Advantage enrollees in plans available for general enrollment and about 900,000 enrollees in special needs plans (Figure 1).

Starting in January 2027, private insurers that offer a dual eligible special needs plan (D-SNP) and an affiliated Medicaid managed care plan in the same county may generally only offer one D-SNP for full-benefit dual-eligible individuals. As a result of this new requirement, private insurers have made a large number of changes to their D-SNP offerings for 2027.

Enrollees who are moved to another Medicare Advantage plan because of a consolidation can select a different Medicare Advantage plan during open enrollment (dual-eligible individuals are also permitted to switch plans at other times during the year under certain circumstances). They may also opt to switch to traditional Medicare but would not have federal guaranteed issue rights if they wanted to purchase a Medigap policy. The lack of federal guaranteed issue rights for Medigap is less consequential for dual-eligible individuals than for other Medicare beneficiaries, because state Medicaid programs cover Medicare premiums, and in many cases cost sharing, for dual-eligible individuals, so they generally do not need additional supplemental coverage. 

The annual open enrollment period offers Medicare beneficiaries the opportunity to review their coverage options and make changes. Aside from Medicare beneficiaries who are affected by plan terminations, the millions of Medicare beneficiaries in private plans that will continue to be offered next year are also likely to see changes to costs, benefits, provider networks, or drug formularies, among other plan characteristics. For PDP enrollees, some who stay in their current plan could face sizeable premium increases in 2027, making it worthwhile to compare their plan options. With the average Medicare beneficiary having 28 MA-PDs and 9 PDPs to choose from, however, comparing coverage options remains a challenge.

Methods

The plans in this analysis include Medicare Advantage prescription drug (MA-PD) plans available for general enrollment and special needs plans, but exclude employer- and union sponsored plans, Medicare Advantage plans open for general enrollment without prescription drug coverage, cost plans, PACE plans, and HCPPs. The analysis also includes stand-alone prescription drug plans (PDPs) available to beneficiaries in traditional Medicare. The plan terminations included in this analysis capture county-level plan offerings that had at least 11 enrollees in June 2026 and are not available for enrollment for the 2027 plan year. Those include plans that were not renewed, as well as plans that reduced their service area to no longer serve a subset of counties (including consolidations that simultaneously reduced the service area). These are identified using the 2027 Part C and Part D plan crosswalk. 

People enrolled in plans that are identified as a “renewal” plan in the 2027 Part C and D plan crosswalk but have a different plan ID for 2027 are not included in our count of people affected by terminations. People who are enrolled in a plan that is being consolidated with another plan are also not considered to be in “terminated” plans because they will continue to be covered by Medicare Advantage unless they proactively choose to switch to traditional Medicare. These enrollees also do not have a federal guaranteed issue right for Medigap.