What's Changing in Medicare for 2027 — and Why You Should Start Reading Mail in May

On April 2, 2026, the Centers for Medicare & Medicaid Services published the final rule for Contract Year 2027. Buried on page 412 was the number that matters most for anyone paying for prescriptions out of pocket: the annual cap on Part D drug spending will be $2,400 in 2027. That is a $300 increase — about 14 percent — over the 2026 cap of $2,100, indexed to the growth in per-capita Part D costs. It sounds like bad news. It is not. The donut hole, which used to send people into a coverage gap that could cost thousands, is now gone for good — written out of the statute by the Inflation Reduction Act of 2022 and codified in this rule.

If you are 65 or older, on Medicare or about to be, the months between now and December 7, 2026 will shape what you pay for healthcare for the entire year of 2027. The mail you receive starting in late September will determine your premiums, your drug coverage, and whether your doctor is still in-network. Most people throw that mail away. I am asking you not to.

This is a long piece. It needs to be. Medicare in 2027 has more moving parts than I have seen in 35 years of doing this work, and I would rather give you the full map than a tidy summary that misses the part that costs you $4,000.

The Part D Cap and the End of the Donut Hole

For most of Medicare's history, Part D had a coverage gap that earned the nickname "the donut hole." You paid your share until your total drug costs hit a threshold, then you fell into a gap where you paid a much higher percentage out of pocket, then you eventually clawed your way into catastrophic coverage. People I worked with hated it. It was confusing on purpose, or at least it felt that way.

The Inflation Reduction Act killed it. As of January 1, 2025, the gap closed and total annual out-of-pocket drug spending was capped at $2,000. For 2026, that cap rose to $2,100. For 2027, it moves to $2,400 — the increase is statutory, tied to growth in Part D per-capita expenditures. CMS spelled this out in the final rule. There is no donut hole, and there will not be one again.

What does this mean for a real person? Take a client I worked with for years, a retired teacher in Fairfield with three brand-name medications including a blood thinner. In 2023, her out-of-pocket drug costs hit $7,400 by November. In 2026, the same prescriptions capped at $2,100. In 2027, $2,400. The $300 difference between this year and next is real money — not nothing — but the end of the gap is still the bigger deal. It just stopped being a story because nobody noticed when it left.

There is also the Medicare Prescription Payment Plan. If you do not want to pay $2,400 in January when an expensive specialty drug fills, you can ask your Part D plan to spread the cost across the year in monthly installments. CMS made this permanent. Plans must offer it. The fine print in your Annual Notice of Change letter will tell you how to enroll.

For more on how the cap works in practice, including the payment plan, see my earlier piece on the $2,100 prescription drug cap.

The Manufacturer Discount Program, Now in the Statute

This one is technical, but bear with me — it matters.

Under the old donut hole rules, drug manufacturers were required to provide a 70% discount on brand-name drugs in the gap. That program is gone. Replacing it is the Manufacturer Discount Program, which the final rule for 2027 codifies in regulation rather than leaving it to sub-regulatory guidance. Manufacturers now provide a 10% discount in the initial coverage phase and a 20% discount in the catastrophic phase. The discounts apply to applicable drugs, which are essentially brand-name and biologic drugs that are not selected for negotiation under the IRA's drug-price provisions.

Why should you care? Because the structure of this program affects which drugs your plan formulary covers and how aggressively plans negotiate. Plans that get larger manufacturer discounts can offer lower premiums or richer coverage. The codification means the rules are now harder to change without going through full notice-and-comment rulemaking. Stability is good for planning. Bad for plans that wanted loopholes.

Drug-Price Negotiation, Round Two

The Inflation Reduction Act gave Medicare authority to negotiate prices on a small number of high-cost drugs. The first 10 negotiated prices took effect January 1, 2026 — Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. I covered those in detail in the 10 Medicare drugs with negotiated prices.

Round 2 takes effect January 1, 2027. CMS selected 15 additional drugs in January 2025, with negotiated maximum fair prices announced in late 2025. These include Ozempic and Wegovy (treated as a single agent for negotiation purposes), Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet, and Otezla. If you take any of these, your 2027 plan formulary should reflect the negotiated price, and your copay structure may shift. Read the formulary. Compare to what you paid in 2026. The savings are real but they vary by plan.

One caveat I want to flag: the GLP-1 drugs (Ozempic, Wegovy) are the ones most people are watching. CMS published the negotiated price in late 2025, and it represents a meaningful reduction from list price. Whether your specific plan passes those savings through to you in the form of a lower copay depends on the plan's design. I have not seen all the 2027 plan filings yet — they hit the marketplace in October — so on the question of "how much will I personally save," I am telling you to read your plan's formulary when it arrives, not to take my word for it.

The 48-Hour Scope-of-Appointment Rule Is Gone

This is the change most retirees have not heard about, and it will affect how brokers and agents talk to you between October 15 and December 7.

Under the old rule, when you contacted a broker about Medicare Advantage or Part D plans, the broker had to wait at least 48 hours after you signed a Scope-of-Appointment form before discussing any plan with you. The 48-hour window was designed as a cooling-off period — a chance to step back from a sales push. CMS finalized the elimination of that waiting period in the 2027 rule, returning to the pre-2024 standard.

The agency's reasoning, as stated in the rule, is that the waiting period created friction that slowed legitimate enrollments without proportionate consumer protection. I am not entirely sold. In my experience, friction is exactly what some seniors need when a broker is leaning hard. Without that 48-hour gap, a high-pressure broker can get a signature on a Scope-of-Appointment form and immediately walk a client through plan selection in the same meeting.

What to do about it: build the cooling-off period yourself. When a broker calls or visits, sign nothing on the spot. Take the materials home. Read them at your kitchen table when nobody is watching. Then schedule a follow-up if you want one. And remember: SHIP counselors (the State Health Insurance Assistance Program) are free, unbiased, and have no commission incentive. The number is 1-877-839-2675.

For more on how brokers and scammers exploit confusion during enrollment, see how to spot a Medicare scam in 2026.

Eleven Star Rating Measures Removed

CMS removed 11 measures from the Medicare Advantage and Part D Star Ratings program for 2027. Star Ratings are how plans are graded, on a scale of one to five, and they affect both consumer choice and plan bonuses.

The removed measures fall into a few categories. Some were patient-experience measures the agency determined were too easily gamed. Some were process measures that no longer correlate strongly with outcomes. A few were duplicative of measures captured elsewhere. The agency also adjusted weighting on remaining measures and codified rules around the Tukey outlier methodology used to set cut-points.

The practical effect for you: when you compare plans on Medicare.gov this fall, the star ratings you see will reflect a slightly different scoring formula than 2026. A plan that was 4 stars last year might be 3.5 this year without any actual decline in quality, simply because the math changed. Do not assume a star rating drop means the plan got worse. Read the underlying measures.

This is also why I generally tell clients not to choose a plan on stars alone. Stars are useful as a sanity check — anything below 3 stars deserves a hard look — but the right plan for you is the one that covers your specific drugs, your specific doctors, and your specific hospital network. A 5-star plan that does not cover your cardiologist is worse than a 3.5-star plan that does.

IRMAA Brackets for 2027

IRMAA — the Income-Related Monthly Adjustment Amount — is the Medicare surcharge that catches retirees off guard. Our free IRMAA calculator shows you the exact 2026 brackets and what each one costs per month — useful before you finalize a Roth conversion or any big income event. If your modified adjusted gross income from two years prior exceeds certain thresholds, you pay extra for Part B and Part D. The 2027 surcharge will be based on your 2025 tax return.

As of this writing in May 2026, CMS has not yet published the official 2027 IRMAA brackets — those typically come out in the fall when Part B premiums are announced. The 2026 first-tier thresholds are $109,000 for a single filer and $218,000 for joint filers. CMS has not yet published the 2027 brackets; based on the indexing formula in the statute and current inflation trends, my best estimate is that the 2027 thresholds will tick up modestly from there — roughly $112,000 single and $224,000 joint. I want to be clear: those 2027 figures are estimates, not the official numbers. The official 2027 brackets will be in the Federal Register in October or November 2026.

If you sold a house in 2025, did a Roth conversion, took a large IRA withdrawal, or had a one-time bump in income, your 2025 tax return is what determines your 2027 IRMAA. You may qualify for a Life-Changing Event appeal — Form SSA-44 — if you retired, lost a pension, or had another qualifying event. The appeal works. I have helped clients win them. For the full breakdown of strategies, see the Medicare surcharge that catches retirees off guard.

The Annual Notice of Change Letter — Don't Throw It Away

Every September, your Medicare Advantage or Part D plan is required to send you an Annual Notice of Change (ANOC) letter. It arrives in late September. It is usually 20 to 40 pages. It is dense, it is in tiny type, and it gets thrown away or filed unopened more often than any other piece of mail in the senior household.

Do not do that this year. The 2027 ANOC will tell you:

• Whether your monthly premium is changing
• Whether your deductible is changing
• Which drugs are being added to or removed from the formulary
• Which doctors and hospitals are entering or leaving the network
• How copays for your specific tier of drugs are changing
• Whether the plan is being terminated entirely (which happened to nearly 3 million seniors in 2026 — see your Medicare Advantage plan is ending)

My recommendation: when the ANOC arrives, sit down at your kitchen table with a highlighter and your current medication list. Look up each drug on the new formulary. Confirm your primary care doctor and any specialists are still in-network. If anything has changed in a way that costs you money or access, you have until December 7 to switch.

A client of mine — retired engineer from Sikorsky, careful man, kept a binder for every important document — almost missed that his Part D plan dropped his cholesterol medication from Tier 2 to Tier 4 in 2024. The letter said it. He did not read past page three. The 2025 cost difference would have been $1,820 over the year. He caught it in November during a routine check-in, switched plans, and saved the money. He still keeps that ANOC letter in his binder as a reminder.

Why Start Reading Mail in May

You are reading this in May 2026. Open Enrollment for 2027 coverage runs from October 15, 2026 to December 7, 2026. That is five months away. Why am I telling you to pay attention now?

A few reasons. First, your Annual Wellness Visit with your primary care doctor is free under Medicare and resets every 12 months. If yours is due, schedule it for the summer so you have a clean record of your conditions, medications, and care needs going into enrollment. Second, plans start telegraphing 2027 changes through trade publications and broker meetings in May and June — by July, you can usually find leaked summaries of major plan exits or formulary changes. Third, Special Enrollment Periods (SEPs) for things like moving, losing other coverage, or qualifying for Extra Help can be used now without waiting for fall enrollment.

There is also a quieter reason. The mail you start receiving in May — from AARP, from your current plan, from brokers fishing for appointments — is the leading edge of the marketing wave that peaks in October. The earlier you train yourself to read it carefully, the less likely you are to be steamrolled in the fall when six brokers are calling and three different mailers arrive each day.

What You Actually Need to Do, by Month

This is the section to bookmark. Print it if you have to.

May 2026 (now)

• Schedule your Annual Wellness Visit with your primary care doctor if you are due
• Pull last year's ANOC letter and your current Part D plan summary; put them in a folder labeled "Medicare 2027"
• Make a list of every prescription you take, including dosage and frequency
• If you sold a house, did a Roth conversion, or had a big income event in 2025, run the IRMAA numbers — you may want to file Form SSA-44

June 2026

• Review your 2025 tax return for any Medicare-relevant items (large capital gains, Roth conversions, IRA withdrawals)
• Confirm your primary care doctor and specialists are still accepting your plan for the rest of the year
• If you take any of the 25 drugs subject to negotiation (the original 10 from 2026 plus the 15 for 2027), check your current copay

July 2026

• Watch for early plan exit announcements (these usually leak in trade press in late summer)
• Update your medication list if anything changed during the spring
• If you have unused Extra Help eligibility, apply now — Social Security Form SSA-1020

August 2026

• CMS publishes preliminary 2027 plan landscape data; review on Medicare.gov
• Confirm your contact information with Social Security and your current plan — undeliverable ANOCs cause real problems

September 2026

• ANOC letters arrive (late September). Read yours within 7 days of receipt
• Highlight every change. Compare drug formulary line by line against your medication list
• Schedule a free SHIP counseling appointment for early October if anything looks off (1-877-839-2675)

October 15, 2026 — Open Enrollment Opens

• Compare plans on Medicare.gov using the Plan Finder tool — enter your specific drugs and pharmacies
• Do not enroll on the first day. Brokers will pressure you. Resist
• If a broker visits, sign nothing during the first meeting. Take materials home. Read them. Schedule a follow-up only if you want one

November 2026

• Make your decision by mid-November if possible
• Confirm enrollment confirmation arrives in writing — keep the confirmation number
• Verify your new plan's effective date and any premium auto-deduction setup

December 7, 2026 — Enrollment Closes

• Last day to change plans for 2027 coverage
• After this date, you are generally locked in until the next enrollment unless you qualify for a Special Enrollment Period
• The Medicare Advantage Open Enrollment Period (January 1 – March 31, 2027) lets you switch from one MA plan to another or back to Original Medicare, but with limited options — do not rely on it as a backup

Common Scam Tactics in 2026 Enrollment

A short sidebar, because this matters and the elimination of the 48-hour rule makes it more important.

The scams I am seeing this year:

1. The "Medicare flex card" robocall. A friendly recorded voice tells you your plan includes a $2,800 flex card for groceries and utilities. It does not. The card is bait to harvest your Medicare number
2. The "plan is ending" scare call. Caller claims your current plan is ending and you need to switch immediately or lose coverage. Real plan terminations come by mail with a 90-day notice
3. The free dinner seminar. Often legitimate-ish — a licensed broker hosts dinner and pitches plans. The food is free, the advice is commission-driven. Eat the steak if you want, sign nothing
4. The "door-knocker" broker. With the 48-hour rule eliminated, expect more in-person broker visits. Federal rules still prohibit unsolicited door-to-door Medicare sales — if someone shows up uninvited, close the door
5. The fake CMS caller. "Hello, this is Medicare calling." Medicare does not call you. CMS does not call you. Hang up

Full breakdown of scam tactics and how to protect yourself: how to spot a Medicare scam in 2026.

A Personal Note on Why This Matters

My father lived through the original Medicare in the 1960s and the prescription drug benefit in 2006. He was wary of both. Not for political reasons — he just did not trust mail from the government to be telling him the whole story. When he was 78 and finally let me sit down with his Medicare paperwork, I found that he had been on the wrong Part D plan for three years. He had been paying about $1,400 a year more than he needed to. Three years. He could have funded a new water heater with what he overpaid.

He was not careless. He was tired. The mail was confusing, the choices felt like a trap, and he did what most people do — he let it ride. By the time we fixed it he was apologetic, like he had let himself down. I told him what I am telling you now: nobody designed this system to be easy to navigate. Reading your mail in May, June, and September is not optional homework. It is self-defense.

What I'd Do If I Were You

Let me be direct. If you are 65 or older and on Medicare, here is the short version of what I would do this year:

• Open every piece of mail from your plan, CMS, or Social Security within 48 hours of receiving it
• Keep a single "Medicare 2027" folder for everything you receive between now and December
• Read your ANOC letter cover to cover when it arrives in late September
• Use Medicare.gov's Plan Finder during Open Enrollment, not a broker's recommendation, as your starting point
• Call SHIP at 1-877-839-2675 if anything is unclear. They are free. They are not selling you anything
• Do not let the elimination of the 48-hour rule pressure you into same-day enrollment decisions

The 2027 changes are mostly good news. The donut hole is gone. The cap is intact. Drug prices for 25 commonly used medications are negotiated. The system is, in genuine ways, better than it was three years ago.

But it is also more complex, and the marketing is more aggressive, and the 48-hour cooling-off period that used to slow brokers down is gone. Your best protection is your own attention.

You have done harder things than read a 30-page letter. Start in May. Finish by December 7. And if something does not make sense, call somebody who is not selling you anything before you sign.