In September 2026, CMS released its projections for Medicare Advantage and prescription drug coverage in 2027.

Projected average Medicare Advantage plan premiums

2026 monthly average

2027 monthly average

Source: CMS, September 28, 2026. Weighted national averages.

Source: CMS, September 28, 2026. These are weighted national averages, not quotes for individual plans.

CMS

CMS also projects that the average premium for prescription drug coverage within Medicare Advantage plans will decline, while average stand-alone Part D premiums will rise by less than $1 a month.

CMS

On the surface, that's encouraging.

But averages can be misleading.

The national average doesn't tell you what will happen to your particular plan, in your ZIP code, with your medications and your doctors.

And there's something else.

Many Medicare Advantage plans already advertise a $0 additional monthly premium.

But zero dollars in premiums doesn't mean zero dollars in healthcare expenses.

You may still pay your Medicare Part B premium, along with deductibles, copayments, coinsurance, and other expenses when you receive care.

That's why I believe the most important number in your Medicare plan isn't necessarily its monthly premium.

It's how much the plan could cost you over an entire year.

Let's imagine two retirees comparing Medicare Advantage plans.

One plan advertises a very low monthly premium.

The other charges $35 per month.

At first glance, the cheaper plan looks like the obvious winner.

But let's examine a hypothetical year of healthcare expenses.

Illustrative example only. Not actual 2027 plan quotes. Assumes the same healthcare needs, with Part B premiums excluded because they would be the same for this comparison.

Potential difference in this example

The plan with the $0 additional premium ends up costing more.

Now, I'm not suggesting that plans with $0 premiums are bad.

Many provide valuable coverage and can be an excellent choice.

But here's the point.

A lower monthly premium doesn't automatically mean a better financial deal.

That's why you should never judge a Medicare plan by its advertised price alone.

This is one of the biggest areas I want O55 Report readers to examine.

Suppose you've been taking the same three medications for several years.

Your current Medicare plan covers all three at an affordable price.

Naturally, you assume the situation will remain the same next year.

But drug plans can change their formularies—the lists of medications they cover—along with drug tiers, pharmacy arrangements, and cost-sharing requirements.

A medicine that was inexpensive this year might cost more next year.

Or your preferred pharmacy might no longer offer the most favorable prices under the plan.

Here's a simple example.

Imagine a medication that costs you $12 per month in 2026.

Under a different plan in 2027, your estimated cost becomes $45 per month.

That's an extra $33 monthly.

Or $396 annually.

And that's just one prescription.

Now consider someone taking five or six medications.

You can see how quickly the difference could add up.

There are important protections in 2027.

Medicare says the annual out-of-pocket limit for covered Part D prescription drugs will be $2,400, up from $2,100 in 2026. The maximum permitted Part D deductible will also increase from $615 to $700, although some plans have lower or no deductibles.

Medicare

Those limits can provide protection against especially high drug expenses. But they don't make every prescription free, and the Part D limit doesn't cover all medical spending or every medication.

Your assignment: Gather a complete list of your medications, including dosages, and compare their estimated annual costs under each plan you're considering.

Don't forget to compare pharmacies.

A preferred network pharmacy may offer meaningfully different costs than a standard network pharmacy.

And if you take a particularly expensive medication, ask whether it requires prior authorization, step therapy, or has quantity restrictions.

A few minutes of research now could help prevent a costly surprise in January.

Here's a situation nobody wants to experience.

You've been seeing the same heart specialist for years.

They know your medical history.

You trust them.

You feel comfortable with their recommendations.

Then January arrives, and you discover that the doctor is no longer participating in your Medicare Advantage plan's network.

Depending on the type of plan, you could face higher out-of-network charges or need to find another provider.

That's why checking your doctor network is just as important as reviewing premiums.

And don't stop with your primary care physician.

Think about specialists, hospitals, rehabilitation facilities, and other healthcare providers you use regularly.

Before choosing your 2027 plan, call the doctor's office and ask:

"Will you participate in this exact Medicare Advantage plan in 2027?"

Be specific about the plan name and plan identification number.

Then confirm the information with the insurance company as well. Networks can change, and simply seeing an insurer's name on a doctor's website isn't enough.

If you have Original Medicare instead of Medicare Advantage, the rules are different. Original Medicare generally lets you visit doctors and hospitals throughout the United States that accept Medicare.

The goal is not simply to find the cheapest coverage.

It's to find coverage that allows you to receive the care you actually need.

If there's one number I want you to write down while comparing Medicare Advantage plans, it's this:

Your annual maximum out-of-pocket limit.

This is the most you would generally have to pay in a year for covered Part A and Part B medical services under your Medicare Advantage plan, subject to the plan's rules.

It can be thousands of dollars.

Let's say you're comparing two hypothetical plans.

One has a $0 additional monthly premium and a $7,500 in-network out-of-pocket maximum.

Another has a $40 monthly premium and a $4,000 in-network maximum.

If you remain relatively healthy and need little care, the first plan might cost less.

But if you experience a serious illness, require surgery, or need extensive medical treatment, that second plan could provide substantially more financial protection.

Remember, that maximum doesn't include every healthcare cost. Premiums, prescription drug costs, noncovered services, and certain other expenses generally fall outside the Medicare Advantage medical out-of-pocket limit.

And if you have a PPO, examine the separate combined in-network and out-of-network limit.

For someone living on a fixed retirement income, these numbers matter.

Because while we all hope to stay healthy, we also need to prepare financially for the unexpected.

My advice: When comparing two plans, don't just ask which one costs less when you're healthy.

Ask which one would leave you in a better financial position if you had an expensive medical year.

There is one more thing many Medicare beneficiaries overlook.

Every fall, Medicare plans send an important document called the Annual Notice of Change.

You may have received yours in September.

It explains changes coming to your existing plan in January.

And it deserves more attention than most advertising you'll see during open enrollment.

This document can reveal changes to premiums, cost sharing, coverage, and other benefits.

The problem?

It's easy to put it in a stack of mail and forget about it.

But if you don't read it, you may miss an increase in a cost you depend on remaining affordable.

Medicare recommends reviewing this notice every year to determine whether your existing plan still meets your needs.

Medicare

There's also an important warning for readers thinking about switching from Medicare Advantage to Original Medicare.

You may want a Medicare Supplement policy, commonly called Medigap, to help cover certain out-of-pocket expenses.

But depending on your circumstances and state, you may not have a guaranteed right to purchase one. Outside certain enrollment protections, an insurer may be allowed to consider your medical history or decline coverage.

Check your Medigap eligibility before making a switch that could leave you without the supplemental coverage you expected.

Medicare

You don't have to become a Medicare expert.

But you do need to ask the right questions.

Before making your decision, take about 30 minutes to review these five things.

Your 2027 Medicare plan checklist

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Compare total annual costs, not just premiums.

Include estimated medical and prescription expenses.

Check every prescription medication.

Verify coverage, dosage, restrictions, and pharmacy prices.

Confirm your doctors and hospitals.

Check the exact 2027 plan network with both provider and insurer.

Compare deductibles and annual out-of-pocket limits.

Consider both a typical year and an expensive medical year.

Read your Annual Notice of Change.

Identify what will be different starting January 1.

Copy the checklist

When you're ready, visit the official Medicare Plan Finder.

Enter your ZIP code, medications, pharmacies, and other necessary information to compare 2027 plan options.

If you need help, call 1-800-MEDICARE (1-800-633-4227) or contact your state's State Health Insurance Assistance Program (SHIP), which offers free, unbiased Medicare counseling.

Medicare

And remember this important deadline:

MEDICARE ANNUAL OPEN ENROLLMENT ENDS

Changes made during this enrollment period generally take effect January 1, 2027.

Some people qualify for other enrollment periods, but don't assume you'll be able to make every change later.

Medicare

Here's something I've learned about protecting money in retirement.

Sometimes the smartest financial decision isn't choosing the lowest price.

It's choosing the best value.

And nowhere is that more important than healthcare.

A Medicare plan that saves you $20 a month might sound attractive.

But if that same plan leaves you paying hundreds more for prescriptions, specialists, or hospital care, was it really a bargain?

That's the question I want every O55 Report reader to ask before December 7.

You worked too hard to build your retirement savings to let an overlooked insurance detail quietly take a bite out of them.

And you deserve to know what you're buying before you need to use it.

So don't allow a lower advertised premium to make the decision for you.

Compare the numbers.

Read the details.

Ask questions.

And choose the coverage that makes sense for your health, your budget, and your peace of mind.

Because when it comes to Medicare, the goal isn't to pay the least every month. It's to avoid paying more than you need to over the entire year.

Until next time, keep protecting your health, your savings, and the retirement you've worked so hard to enjoy.