The inflation report out today will almost certainly repeat one of the stranger facts of this year: prescription drug prices are falling, and falling at a pace not seen in decades. Over the twelve months to September the prescription drug index was down about 4.5%, in a month when everything else was up 3.7%. That is real. It is also not the number that determines what you pay, and the number that does is going the other way. The standard Part D deductible rises about 14% on January 1.

Two Different Measurements

The inflation index tracks prices. What a Medicare beneficiary pays is set by plan design: the deductible, the copays, the formulary tier a drug sits on and the out of pocket cap.

Those are decided plan by plan, once a year, and they do not follow the index. For 2027 the standard Part D deductible goes to $700 from $615, a rise of about 13.8%. The annual out of pocket cap goes to $2,400 from $2,100, about 14.3% higher.

So the cap that protects you and the deductible you pay before anything else happens both rose by roughly a seventh, in a year when drug prices fell.

Why Prices Fell At All

Mostly because of a handful of drugs rather than a broad change. Competition and discounting among the newer weight and diabetes drugs, a batch of expensive medicines going generic or biosimilar, and pressure on pharmacy middlemen account for most of it. Analysts looking at the decline attribute very little to any single policy.

That matters for a household because an index driven by a few large categories tells you almost nothing about your own prescriptions. If the drugs that got cheaper are not the drugs you take, your share of the bill is simply rising.

What Is Moving In Your Direction

Not everything is worse. The average premium on a standalone Part D plan is roughly flat, going from about $35.09 to about $36, and the average drug plan premium inside Medicare Advantage is forecast to fall from about $11.32 to about $7. The base beneficiary premium that drives some surcharges rises to $41.33 from $38.99.

The pattern is consistent: premiums steady or down, cost sharing up. Which is to say the plan looks cheaper on the shelf and costs more when you use it.

Final Take

Open enrollment closes on December 7, and the single most valuable half hour available to anyone on Medicare is spent before then.

Put your actual prescriptions, by name and dose, into the plan finder on the Medicare site and sort by total annual cost rather than by premium. A plan that is $15 a month cheaper and puts one of your drugs on a higher tier is not cheaper.

Check whether each of your drugs is still on the formulary for 2027. Plans drop and reclassify drugs every year, and the notice telling you so is in the packet most people recycle.

And if your total drug spending is anywhere near the new $2,400 cap, look at whether your plan offers the payment smoothing option that spreads that cost across the twelve months. It does not reduce the total. It removes the February bill that otherwise arrives all at once.

Written by Deniss Slinkins
Millionaire Core