Medicare Open Enrollment 2027 Brings Prescription Drug Coverage Changes Worth a Closer Look

Medicare open enrollment runs from Oct. 15 through Dec. 7, and for many beneficiaries, it’s tempting to let their current plan renew without a second look. However, prescription drug coverage is shifting quickly, and a plan that worked well this year may not work the same way in 2027.

“Just as beneficiaries’ needs change, Medicare coverage can also change from year to year,” said Gavin Clingham, director of public policy for the Alliance for Patient Access (AfPA). Prescription drug plans have been updating coverage and costs “at a rapid pace, meaning what was once covered at an affordable cost might now cost more or be more difficult to access.”

Part D changes bring savings and new trade-offs

Recent changes to Medicare Part D are designed to lower costs for beneficiaries. In 2027, annual out-of-pocket spending on covered prescription drugs will be capped at $2,400. The Medicare Prescription Payment Plan also lets beneficiaries spread those costs into monthly payments over the year instead of paying large amounts at the pharmacy.

“In many cases, these changes are helping,” Clingham said.

At the same time, he said, the changes have left insurers carrying more cost and uncertainty, and some are passing that on.

“Some insurers are reacting to this exposure by changing the list of covered drugs, known as the formulary, adding new layers to access such as prior authorization or step therapy and changing the cost-sharing to put more expense on beneficiaries,” he said.

Auto-renewal isn’t always the safest choice

Letting a plan renew is the simplest option, but Clingham cautioned that it may not be the best one.

“Automatic renewal is certainly the easiest path, but changes to the benefit mean that your plan may not offer the same coverage from year to year,” he said.

The number of Part D plans is also shrinking, he added, which makes it more important for beneficiaries to check whether their plan still meets their needs.

Look beyond the monthly premium

A low premium doesn’t guarantee good coverage, especially for people who take medications for chronic conditions. Clingham recommends checking whether each medication is on the plan’s formulary, what approvals might be needed to get it and how much the copay or coinsurance will be.

“Prescription drug plans are only as good as the coverage they provide, and not all are the same,” he said.

Watch for prior authorization and step therapy

Two common insurer requirements can make it harder to get prescribed medications. With prior authorization, a clinician must complete paperwork to get the plan’s approval before a medication is covered. With step therapy, a patient must first try and fail on medications the insurer prefers before the plan will cover a newer or more costly treatment.

“Both add cost to the system and slow access to treatment,” Clingham said.

When reviewing a plan, beneficiaries should look for those terms, as well as whether a medication is listed as “preferred” or on a higher tier, which can affect how easy it is to get and how much it costs.

Open enrollment is the time to act

If a current medication will no longer be covered or will cost much more next year, open enrollment is the time to make a change.

“Open enrollment is the best, and sometimes only, time during the year when a beneficiary can make a change in their plan,” Clingham said. Those facing coverage gaps “should be looking for an alternative plan that meets their needs.”

Free help is available

For people who feel overwhelmed, Clingham pointed to tool kits from patient advocacy groups, including AfPA and the MAPRx Coalition. Medicare also offers a plan finder tool on Medicare.gov and free one-on-one help at 1-800-MEDICARE.

Before the Dec. 7 deadline, his advice comes down to two steps. First, make sure your plan offers the best, most affordable coverage for the medications you take now, since “they are the medicines you are most likely to need in the next year.” Second, if you have several prescriptions with high copays, consider enrolling in the Medicare Prescription Payment Plan “to spread your out-of-pocket prescription drug costs into manageable monthly installments.”