Medicare open enrollment runs from October 15 to December 7, and whatever is chosen in that window takes effect on January 1. Doing nothing is a choice too: an enrollee who ignores it is automatically renewed into next year's version of a plan whose terms may have changed considerably.

Three costs are moving for 2027, and together they point the same way. The Part D out of pocket cap rises to $2,400 from $2,100, the Part D deductible ceiling rises to $700 from $615, and a temporary federal subsidy that has been holding down stand-alone drug plan premiums expires at the end of this year.

The cap is the number that governs a bad year

The out of pocket cap is the most consequential change for anyone with significant prescription costs, because it is the ceiling on what a bad year can cost. Moving from $2,100 to $2,400 adds $300 of exposure for an enrollee who reaches it, and the deductible ceiling adds up to another $85 before the coverage begins.

The expiring subsidy is less visible and may be larger. The Part D Premium Stabilization Demonstration has been reducing premiums by an estimated $16 a month per enrollee this year across roughly 24.9 million people on stand-alone drug plans. When a temporary subsidy ends, the premium does not rise; it simply stops being held down, and the increase appears as an ordinary rate change.

The standard Part B premium is also expected to rise, with a figure near $209.50 a month circulating against $202.90 this year. The official Part B premium and the Part A and B deductibles are published in late October or early November, so treat that as a projection until it is confirmed.

How this interacts with the Social Security raise

Whitmore's Watchlist:
UNH (UnitedHealth Group Incorporated): The largest Medicare Advantage insurer, geared directly to this enrollment season.
HUM (Humana Inc.): More concentrated in Medicare than any of its peers.
CVS (CVS Health Corporation): Insurance plus the pharmacy benefit layer where the Part D economics are set.

The 2027 cost of living adjustment for Social Security is announced on October 14, the day before enrollment opens, and estimates have been running near 3.6%.

The sequence matters. The Part B premium is deducted from the Social Security payment before it reaches the bank account, so the two announcements together determine the deposit rather than either one alone. On the figures above, a benefit rising 3.6% against a Part B premium rising about 3.3% leaves the raise mostly intact, which is a better outcome than several recent years when the premium rose by a larger percentage than the adjustment.

Prescription costs sit outside that netting. An enrollee who reaches both the deductible and the cap could pay up to $300 more for drugs next year, which is a meaningful share of a typical raise for a typical benefit.

What the window is actually for

The useful work in these eight weeks is narrow and specific.

The Annual Notice of Change arrived in late September and states exactly what is changing in the current plan: the premium, the deductible, the drug tiers, and whether particular medicines moved or were dropped. Most of the real cost differences for an individual come from the formulary rather than from the headline premium, because a drug moving up a tier or off the list entirely can cost more than the premium difference between two plans.

The two checks worth making are whether each prescription is still covered at the same tier, and whether the doctors used are still in network, which matters for Medicare Advantage rather than for original Medicare. Both can be confirmed through the plan finder tool using an actual list of medicines and pharmacies rather than estimates.

For an investor, the same window is the sector's whole commercial year. Medicare Advantage enrollment decided in these eight weeks determines membership and revenue for the following twelve months, which is why the insurers' guidance tends to move in January rather than when they report.

Whitmore's Take: Doing nothing renews a plan whose terms have changed, which is the one choice that guarantees a surprise. Worth spending an hour on the notice that arrived last month before the December 7 deadline closes the option.

Written by Daniel Whitmore
Millionaire Insiders