There will be modest cost sharing changes to the Medicare Part D prescription drug plan design for 2027. However, there will be fewer plans to select from in California and less help to guide Medicare beneficiaries in finding the best plan.
This Part D plan discussion leans toward the stand-alone prescription drug plans outside of Medicare Advantage plans. People who should have a Part D plan are those in Original Medicare with a Medicare Supplement plan.
Part D Deductible and MOOP Increases.
While the 2027 Part D prescription drug plans will have modest cost sharing changes from 2026, we are seeing fewer plan sponsors off the Part D plans. The pharmacy deductible increases to $700. The maximum out-of-pocket amount increases to $2,400.
The standard Medicare Part D benefit design has a higher pharmacy deductible of $700. After the deductible has met from drug purchases from a retail pharmacy, the plan member would go into 25 percent coinsurance. That means the Medicare beneficiary would pay $25 for a 30-day refill on a prescription with a retail price of $100.
The maximum out-of-pocket amount has increased to $2,400. After the plan member has spent $2,400 on prescription medications, they are no longer responsible for any costs for drugs under the plan. This $2,400 maximum out-of-pocket amount will also be applied to the drug portion of Medicare Advantage plans.
However, Medicare allows the Part D plan sponsors to offer alternative plan designs as long as they actuarial equivalent to the standard benefit design. This means that you will see Part D plans with different copayments, deductibles, and coinsurance. The maximum out-of-pocket for the alternative plan designs will still be $2,400.
In this theoretical plan design, there is no pharmacy deductible for drug tiers 1 and 2. The deductible only applies to tiers 3, 4, and 5. In addition. there is a set copayment for tier 2 and a higher coinsurance percentage for tiers 3 through 5. Some plans may have a tier 6 select care category where the drugs are not subject to any deductible and drug costs are $0.
Plans Pulling Out of Market
In California, there will be fewer companies (plan sponsors) offering Part D drug plans. While the number of plan sponsors and plans may be severely reduced, the Medicare population has increased. This means higher call volumes to 2027 plan sponsors from Medicare beneficiaries attempting to learn about the plans. The end result will be potentially longer calling times waiting for assistance.
No Agent Commissions for Enrollments
In an effort to suppress enrollment into Part D drug plans, most of the plan sponsors have made the plans non-commissionable to health insurance agents. In other words, a health insurance agent will receive no commission if they enroll a Medicare beneficiary into the majority of the plans offered. Because assisting Medicare beneficiaries with finding the best Part D drug plan is time intensive for agents, expect fewer agents offering help for the Part D plans.
Medicare.gov still offers a very good Part D plan search. The Medicare Part D drug plan payment plan will still be offered for 2027. This helps plan members spread their drug costs over the twelve-month period of the year. There will still be extra help offered through Medi-Cal and Social Security for beneficiaries with low incomes.
YouTube video on 2027 Part D drug plan changes.
