If you pair Original Medicare with a Medicare Supplement (Medigap) policy, you already enjoy predictable coverage for doctor visits and hospital stays. However, because Medigap plans do not include outpatient prescription drug coverage, you rely on a standalone Medicare Part D plan (PDP) for your medications.
As 2027 approaches, federal funding updates will directly impact standalone prescription drug plans. Here is what Medigap policyholders need to know to protect their budget without disturbing their core medical coverage.
Part D 2027 costs at a glance
| Stabilization | 2026 | 2027 Projection |
| Federal subsidy | $16/month stabilization | Expired (Dec 31, 2026) |
| Base Beneficiary PDP Premium | $38.99 | $41.33 |
| Out-of-Pocket Cap | $2,100 | $2,400 |
Why Medigap policyholders feel the change to Part D costs first
For 2025 and 2026, the federal government ran a temporary $9.8 billion stabilization program that offset standalone drug plan premiums by up to $16 per month. That temporary federal support officially expires on December 31, 2026.
Unlike Medicare Advantage plans—which can use medical rebates to absorb prescription costs and maintain $0 drug premiums—standalone Part D plans must price their policies based strictly on market drug spending. As a result, CMS projects that the national Part D base beneficiary premium will rise to $41.33 for 2027, and approximately 75% of standalone drug plan enrollees may see monthly rate adjustments.
Key Part D protections that remain locked in for 2027
While monthly premiums for standalone drug plans may adjust, your underlying Medicare rights and benefits remain fully protected:
- Medigap Policy Safety: Your Medigap policy (Plan G, Plan N, etc.) is completely separate and untouched by Part D changes.
- $2,400 Annual Spending Ceiling: The Inflation Reduction Act’s out-of-pocket prescription drug spending cap expands to $2,400 for 2027. Once you reach this limit, you pay $0 for covered drugs for the rest of the year.
- $35 Insulin Cap: Copays for covered insulin products remain capped at $35 per monthly supply.
- Payment Flexibility: You can still opt into the Medicare Prescription Payment Plan to spread drug costs into monthly payments.
- Low-Income Subsidy (Extra Help): Assistance for qualifying low-income beneficiaries remains entirely unaffected.
Your 2027 Medigap-PDP Open Enrollment plan
You do not need to change your Medigap policy to fix your prescription drug coverage. During Annual Open Enrollment (October 15 – December 7):
- Keep Your Medigap Policy Intact: Never drop or change a quality Medigap policy simply because your drug plan premium shifts.
- Audit Total Drug Costs: Compare standalone PDP options based on monthly premiums plus annual deductibles and copays for your specific medications.
- Verify Prescription Formularies: Ensure your brand-name and specialty drugs remain on your standalone plan’s covered drug list for 2027.
- Consult a Licensed Advisor: Work with our specialized advisors to evaluate 2027 standalone Part D options starting October 1.
