On July 28, 2026, the Centers for Medicare & Medicaid Services (CMS) published preliminary Medicare Part D bid information for contract year 2027.
This information not only helps prescription drug plan (PDP) sponsors finalize their offerings for the upcoming plan year but also allows insurance agents to get a feel for what they and their clients may see.
The 2027 national average monthly bid amount (NAMBA), the 2027 base beneficiary premium, and the end of the Part D Premium Stabilization Demonstration Program tell us there may be continued disruption in the stand-alone prescription drug plan market this fall. Here’s why.
The 2027 Medicare Part D NAMBA
According to the fact sheet, the 2027 national average monthly bid amount (NAMBA) is $296.05.
The NAMBA represents the average estimated cost for Part D sponsors to provide basic prescription drug coverage. Plans with larger enrollment have a greater impact on the calculation than plans with smaller enrollment.
The 2027 NAMBA is $56.78 higher compared to 2026, representing nearly a 24 percent increase.
The 2027 NAMBA is $56.78 higher compared to 2026, representing nearly a 24 percent increase in what Part D sponsors can expect their coverage to cost them.
Notably, it’s approximately 65 percent higher than in 2025 and 361 percent higher than in 2024, both key years in regard to Inflation Reduction Act Part D changes taking effect. It is also the smallest year-over-year increase we’ve seen since the 2022 to 2023 plan years.
Medicare Part D NAMBA, 2023-2027
The NAMBA is not the average Part D premium policyholders pay. Instead, it factors into both the government subsidy paid to plans and the premiums beneficiaries ultimately see.
The 2027 Base Beneficiary Premium for Medicare Part D
CMS announced that the 2027 national base beneficiary premium will be $41.33.
The national base beneficiary premium serves as the starting point for calculating plan-specific premiums. CMS calculates this figure using a formula that incorporates plan bids and estimates of reinsurance costs associated with the standard Part D benefit.
The 2027 base beneficiary premium is $2.34 higher compared to 2026, an increase of 6 percent.
The 2027 base beneficiary premium is $2.34 higher compared to 2026, a 6 percent increase. Remember, the Inflation Reduction Act (IRA) started limiting annual increases in the base beneficiary premium to no more than 6 percent in 2024 and will continue to do so through 2029.
Medicare Part D Base Beneficiary Premium Trend, 2023-2027
Like the NAMBA, the national base beneficiary premium is not the average premium beneficiaries pay. It is a benchmark used in premium and subsidy calculations.
Medicare Part D Direct Subsidy, 2023-2027
CMS Ending the Part D Premium Stabilization Demonstration
In addition to releasing 2027 bid information, CMS announced that the Part D Premium Stabilization Demonstration will end after contract year 2026.
Originally set to run through contract year 2027, the demonstration aimed to help stand-alone PDPs navigate cost pressure changes resulting from the IRA’s Part D redesign and help keep premiums and Part D options more stable for Medicare enrollees. Participating plan sponsors that received additional federal support through the demonstration in 2025 ($15/month) and 2026 ($10/month) will no longer have access to that support in 2027.
After analyzing 2027 bids, CMS believes that carriers now have enough experience operating under the redesigned Part D benefit to develop accurate bids
After analyzing 2027 bids, CMS believes that carriers now have enough experience operating under the redesigned Part D benefit to develop accurate bids and no longer need additional support.
Why We Expect Continued Premium Pressure & PDP Market Changes for 2027
Both the NAMBA and base beneficiary premium are increasing again for 2027. At the same time, CMS is ending the Part D Premium Stabilization Demonstration that helped support stand-alone PDPs. In other words:
- Providing Part D benefits is generally costing plan sponsors more next year
- By accepting the stabilization funds, Part D sponsors also agreed to cap the year-to-year increase in the member’s premium. In 2027, there will be no such caps.
- The starting point for plans’ Part D premiums will be higher
- PDP sponsors will lose the additional government support they expected to receive through the demonstration program
Keep in mind, plan sponsors did not know about the conclusion of the Premium Stabilization Demonstration Program when they submitted their bids.
With higher costs and less support from the government, we can speculate that PDP sponsors may, in turn:
- Increase beneficiaries’ premiums
- Tighten plan offerings and formularies
- Reevaluate distribution and compensation strategies
Keep in mind, plan sponsors did not know about the conclusion of the Premium Stabilization Demonstration Program when they submitted their bids.
CMS has not yet released final 2027 premiums or plan offerings. Those details will become available in September, when they publish the Medicare Advantage and Part D landscape information.
While we’ll have to wait for final plan details to be certain, CMS’ Part D Bid Announcement gives us a look at what may be in store for the upcoming AEP.
Together, the NAMBA and the base beneficiary premium indicate that coverage will cost plans and beneficiaries more. And the end of the Premium Stabilization Demonstration? Well, that’s going to create more cost pressure behind the scenes. Whether that pressure shows up as higher premiums, plan changes, or both remains to be seen…
All that to say, it’s going to be another busy enrollment season. What are you doing to prepare?
Not affiliated with or endorsed by Medicare or any government agency.
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