Plans are disappearing, drug costs are rising. What NC Medicare enrollees need to  know this year

By Ashley Fredde

An estimated 40,000 North Carolinians on Medicare will lose their existing plans at the end of the year, adding another layer of uncertainty to an open enrollment period marked by changing prescription drug costs, shrinking coverage options and rising out-of-pocket expenses. 

Those beneficiaries are among more than 4 million Medicare plan members across the country who will see their Medicare Advantage or standalone prescription drug plans discontinued in 2027, according to an analysis by KFF. Seniors whose plans do remain available could face higher premiums, different deductibles or changes to the medications and health care providers that are covered. 

The consequences of overlooking those changes could extend beyond paying more for care, advocates warn. Some could lose prescription drug coverage or face restrictions when trying to switch between Medicare Advantage and traditional Medicare. 

Medicare’s annual open enrollment period runs through Dec. 7. Beneficiaries have until then to review their coverage and make changes that take effect Jan. 1. 

Advocates say the number and complexity of changes this year make that review particularly important, even for people who have been satisfied with their plans. 

“I would definitely say this is the year not to just say ‘Everything is fine, and I’m going to stick with what I have,’” said Melinda Munden of North Carolina’s Seniors’ Health Insurance Information Program, or SHIIP.

When Medicare plans disappear

Insurers may have chosen to discontinue plans or limit where they offer them. While the changes are occurring statewide, the impact varies county by county because Medicare Advantage plans are offered locally.

Beneficiaries whose Medicare Advantage plans are being discontinued and who do not select another plan will generally be returned to traditional Medicare. That transition comes with an important caveat — they will not automatically receive standalone prescription drug coverage and must enroll in a separate Part D pharmacy plan, if they want one.

Insurers are required to notify beneficiaries of changes to their coverage through an Annual Notice of Change, which is typically sent through the mail in September. The notice outlines changes to premiums, deductibles, copayments, provider networks and whether a plan will still offer coverage the following year.

But not every disappearing plan is considered a termination, said Gina Upchurch, a Medicare expert and executive director of Durham-based Senior PharmAssist. Insurers can also consolidate plans, she said. When that happens, beneficiaries are automatically moved into another plan offered by the same company.

That can affect whether beneficiaries qualify for special enrollment protections, including the right to purchase some Medigap supplemental insurance policies without being denied coverage or charged more because of their health history. Those protections usually only apply to  specific circumstances, such as when a Medicare Advantage plan stops serving a beneficiary’s area. 

Since the rules depend on how a plan is changing and the beneficiary’s circumstances, Upchurch encouraged people to reach out to SHIIP counselors for explanations about their coverage changes — as well as what enrollment options and protections they may have.

Prescription drug costs and fewer choices

For people on traditional Medicare, the options for standalone prescription drug coverage are narrowing, even as premiums and other out-of-pocket costs are changing. 

North Carolina enrollees will have 11 standalone Medicare Part D plans to choose from in 2027, down from 12 this year, Munden said, because HealthSpring is consolidating two existing plans into one.

Nationally, the average monthly premium for standalone Part D coverage is projected to rise from $34 to $51 for beneficiaries who remain in their current plans, a 50 percent increase, according to an October analysis by KFF. Some low-income beneficiaries can get subsidies to offset those costs, but the KFF analysis also found that more than three-quarters of standalone Part D enrollees who do not receive low-income subsidies could pay more if they keep their existing coverage.

These changes have come after the early termination of a federal premium stabilization program that gave participating insurers more subsidies to limit premium increases. The program, initially scheduled to run through 2027, will instead end after 2026.

But Part D premiums are only part of the equation.

The maximum deductible for Part D plans is increasing from $615 to $700, according to the Centers for Medicare & Medicaid Services. 

Beneficiaries may also face higher costs before their prescription coverage begins paying for certain medications. Plans can change which medications they cover, how those drugs are classified into pricing tiers and which pharmacies offer preferred pricing. 

That’s why it’s so critical to read the fine print. 

Upchurch, whose nonprofit has helped counsel Durham Medicare enrollees for 20 years, said the changes are particularly concerning for beneficiaries who depend on several medications or have limited incomes. Some standalone drug plans have substantially increased their premiums, and others carry deductibles that can be difficult for beneficiaries to afford.

At the same time, the annual out-of-pocket spending cap for covered Part D prescriptions will increase from $2,100 to $2,400 in 2027. The cap limits qualifying prescription drug expenses, but that doesn’t include monthly premiums or medications that are not covered by a beneficiary’s plan.

For beneficiaries weighing their options, SHIIP’s Munden said it’s important to compare total prescription costs rather than selecting a plan based solely on its monthly premium.

“Even if it’s a small increase in the premium, there could be a significant increase in the copayments at the pharmacy,” Munden said. “It’s worth taking 30 minutes to an hour of your time to do the comparison to see what’s going to work best for somebody.”

Read the small print

Rising prescription drug costs are not the only financial consideration for enrollees weighing their 2027 Medicare coverage options. Medigap policies, which help cover expenses such as deductibles and coinsurances under traditional Medicare, are also getting more expensive. 

Upchurch said Senior PharmAssist has encountered beneficiaries whose monthly Medigap premiums have climbed from roughly $150 or $200 to $300 or even $400 over the past year.

Nationally, Medigap policyholders paid an average of $244 per month in 2025, according to KFF, with premiums increasing an average of 7 percent from the previous year.

Those rising costs, coupled with higher premiums and deductibles for standalone prescription drug plans, can make Medicare Advantage plans appear more affordable.

Medicare Advantage plans are offered by private insurers and often combine hospital, medical and prescription drug coverage into one plan. Many advertise low or no additional monthly premiums, along with benefits such as dental, vision or hearing coverage.

But those savings can come with trade-offs.

Medicare Advantage plans typically use narrower provider networks and may require prior authorization for some services. That’s why it’s important for beneficiaries to check to see if their preferred health care provider is in a plan’s network. 

Beneficiaries can also face varying copayments, deductibles and other out-of-pocket expenses depending on the care they need.

Upchurch said some beneficiaries are drawn to benefits they see plans touting in advertisements and commercials, such as assistance paying their Medicare Part B premium. They don’t realize, however, that other costs or benefits may have changed. Those differences can be particularly important for people who regularly see specialists, need hospital care or depend on certain medications.

And while beneficiaries can generally switch from Medicare Advantage to traditional Medicare during open enrollment, purchasing a Medigap policy to help cover traditional Medicare’s out-of-pocket costs may be more complicated. Insurers can consider an applicant’s medical history when deciding whether to issue a Medigap policy — and how much to charge — if it’s not a certain enrollment period or there are no special protections.

That makes it important to understand not only what a new plan offers, but also what coverage and protections a beneficiary could lose by switching.

When a small premium leads to lost coverage

For some Medicare beneficiaries, even a few dollars in unexpected costs can have lasting consequences. Earlier this year, approximately 140,000 people nationwide lost their prescription  Wellcare Value Script drug coverage after failing to pay a new $3.60 monthly premium, according to reporting by KFF Health News.

The plan hadn’t charged premiums before, and some beneficiaries had relied on automatic deductions from their Social Security benefits to pay for Medicare coverage. When the plan did begin charging a premium, those deductions did not automatically begin. 

Upchurch said some Durham residents had dismissed notices and phone calls from Wellcare about unpaid premiums because they thought the communications were scams. By the time they realized what had happened, they had lost their coverage. Some beneficiaries were unable to reenroll immediately and could face late-enrollment penalties when they sign up for prescription drug coverage again. 

It’s challenging to keep it all straight, because during open enrollment, beneficiaries are inundated with insurance advertisements, unsolicited calls, emails and text messages.

“It’s all over the place,” Upchurch said. “They’re going to call you. They’re going to email you. And so now it’s hard for people to discern: Is this real? Is this really from the government? Or is this a scam?” 

The confusion has left some older adults reluctant to answer their phones or open unfamiliar mail, she added, even when the messages could contain important information about their benefits.

The consequences can extend beyond missed enrollment notices. At a recent participant advisory meeting, Upchurch said one older adult described feeling increasingly isolated because of the constant pressure to avoid potential scams.

Munden recommended that beneficiaries not give any personal information to unsolicited callers. People should instead call their insurer directly — using the telephone number printed on their insurance card — to verify whether a notice or payment request is legitimate.

What beneficiaries should do before Dec. 7

Medicare’s annual open enrollment period ends Dec. 7, and advocates are encouraging beneficiaries to review their coverage even if they don’t think they need to make any changes.

A starting point is the Annual Notice of Change sent by insurers, which outlines how a plan’s premiums, deductibles, covered medications and other benefits will change in 2027. Beneficiaries can also use the Medicare Plan Finder to compare available plans based on their prescriptions, preferred pharmacies and estimated annual costs.

For those considering Medicare Advantage, Munden recommended contacting doctors’ offices, specialists and hospitals to confirm which plans they will accept in the coming year.

Beneficiaries should also verify how their monthly premiums will be paid.

While the number of options and annual changes can make the process feel overwhelming, Munden emphasized that taking time to compare coverage can help beneficiaries avoid unexpected costs and disruptions in care.

The post Plans are disappearing, drug costs are rising. What NC Medicare enrollees need to  know this year appeared first on North Carolina Health News.