Are You Bracing for Higher Medicare Costs in 2027?
Many seniors opening their Annual Notice of Change (ANOC) letters are finding double-digit rate hikes on Part D prescription drug plans and Medigap supplemental coverage.
In this episode, Robert Powell, CFP®, sits down with Jae Oh, CFP®, author of “Maximize Your Medicare,” to unpack why healthcare costs are surging and how you can protect your retirement budget during the Annual Enrollment Period.
In This Video, We Cover:
- Introduction: The 2027 Medicare Rate Shock
- Why Part D & Medicare Advantage Premiums Are Surging (The $2,400 Cap)
- The Formulary Risk: Will Your Prescriptions Still Be Covered?
- The Expiration of the CMS Premium Stabilization Demonstration
- The “Preferred Pharmacy” Trap on Medicare Plan Finder
- Why Medigap (Plan G & Plan N) Premiums Are Rising 25%+
- Can You Switch Medigap Plans? Medical Underwriting & The Birthday Rule
- Key Takeaways for Open Enrollment
Key Insights:
- Part D Premiums: Plans that once cost $60/month are rising by 50% or more, while many $0 premium plans are disappearing entirely.
- The IRA Effect: The Inflation Reduction Act caps out-of-pocket drug costs at $2,400 in 2027, forcing carriers to shift costs into upfront premiums and narrower drug formularies.
- Medigap Medical Underwriting: Downgrading from Plan G to Plan N isn’t automatic; in most states, you must pass medical underwriting unless your state has a “birthday rule”.
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