Local health insurance broker highlights changes coming to Medicare, healthcare policies in 2027

As over a million Coloradans review their healthcare plans for Medicare's open enrollment period — running from Oct. 15 to Dec. 7 — a local health insurance broker is preparing for some sweeping changes to the program that take effect Jan. 1, 2027.

Some of the most prominent changes to Medicare include rising prescription drug costs and the discontinuation of several Medicare Advantage plans, according to Donald Allen, who works for AIS Medicare & More, an organization that helps clients along the Front Range enroll in healthcare.

"People should be double-checking their annual notice of change," Allen said, referring to the mandatory notifications delivered by mail or electronically, according to the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicare. "Their notice of change will tell them immediately if their plan is still available to them or if it's going away, and if not, they need to ask themselves if they are okay with the changes to their existing policy."

Allen added that separate letters outline updates to prescription coverage or notify policyholders if their primary provider has been removed from the network.

However, there is a catch.

Policyholders typically only receive these provider network notices if they actively see that doctor and have them listed as their primary care physician.

"They may not get a notification that their doctor is no longer covered and then they don't find out until it's time to make an appointment," Allen said. "That's a big reason why I have people come into my office to go over what's changing in their policy — not just coverage-wise but usage-wise."

Changing plans and higher costs

Prescription drug coverage under Medicare Part D will see significant cost adjustments.

Allen said maximum out-of-pocket costs for prescriptions — which are covered under Medicare Part D — are increasing from $2,100 to $2,400, while deductibles are rising from $615 to $700. Monthly premiums for prescription plans will also fluctuate, varying from $5 to $260 compared to the current $0 to $151 range.

Additionally, some insurers are shifting from flat copays to percentage-based coinsurance for brand-name medications.

"Formularies are becoming a little more restrictive, so they're covering fewer medications and increasing the costs," Allen added.

A Medicare formulary is the official list of generic and brand-name drugs covered by a Part D plan, which generally mandates coverage for certain critical diagnoses like cancer, HIV/AIDS, and depression.

Some major insurance carriers like UnitedHealth, Humana, and Aetna are scaling back their Medicare Advantage offerings across the country, while Cigna is exiting the Colorado market entirely.

In Colorado, rural areas are facing the most disruption, according to Allen.

According to CMS data, 12 Colorado counties will have zero general Medicare Advantage plans with prescription coverage in 2027, up from eight counties this year.

Additionally, UnitedHealthcare pulled many of its AARP Medicare Advantage PPO plans from Logan, Phillips, and Yuma counties and completely removed them from Eagle County. Beneficiaries losing their plans have until Dec. 31 to select a new one.

"A lot of the reason for some of the price changes is the subsidization that the government was providing that was planned to go away after two years," Allen said.

The Part D Premium Stabilization Demonstration is a federal subsidy that was created by the Biden administration in 2024 to keep premiums low and stable while insurance companies adjusted to new rules under the Inflation Reduction Act.

In July, CMS announced it would not be extending the subsidy into 2027.

Other looming adjustments to Medicare Advantage policies include a reduction or complete elimination of over-the-counter, fitness, dental, and vision allowances, alongside steep increases in hospital and surgery copays.

"Medicare Advantage has a per-day copay for a hospital visit, and with a lot of the policies, we saw drastic increases," Allen said. "With some of them, it's 200 more dollars a day for a hospital stay."

On top of that, some health services organizations like Optum are limiting which policies they accept.

"Optum will not be accepting the Humana Preferred Provider Organization (PPO) policies. They'll only accept the Humana Health Maintenance Organization (HMO) policies," Allen said. "That's something a lot of people need to be aware of — they may have benefits and coverage in place this year that's not going to be in place next year."

For Medicare Supplement plans, also known as Medigap, Allen reported premium increases of roughly 8% to 30% in some cases.

These plans fill in the gaps that original Medicare doesn't pay — or about 20% of health care costs.

"For someone turning 65, the Supplement premiums start at about $200 a month and as their age increases, their premiums increase," he said.

Medicare Advantage and Supplement plans work differently, so people should compare the coverage, costs and provider access that matter to them rather than choosing based on one benefit or premium alone, Allen said.

GLP-1 Bridge program

In July, CMS launched a new program, Medicare GLP-1 Bridge. A temporary initiative that is valid until 2028. The program offers GLP-1 medications to Medicare beneficiaries using them exclusively for weight loss for $50 per month.

GLP-1 prescriptions include popular brands Mounjaro, Ozempic, Wegovy and Zepbound.

"To be eligible, patients have to have a prescription drug plan active, whether that's a standalone prescription drug plan or a Medicare Advantage prescription plan," Allen said.

Although these medications were originally made to treat Type 2 diabetes, GLP-1s have skyrocketed in demand due to their ability to successfully support weight loss without a costly and invasive procedure like gastric bypass.

Medicare recipients can only participate in the bridge program if they have been using GLP-1s or are newly prescribed them for the purpose of losing weight, meaning diabetes patients that are prescribed the drug cannot enroll in the initiative.

"In that case, you have to use your prescription plan and the cost is much higher because it's going towards your max out-of-pocket of $2,100 or heading to $2,400 next year, versus someone who's specifically using it for weight loss and only paying $50 a month," Allen said.

Affordable Care Act changes

Medicare isn't the only system shifting as the new year approaches; Coloradans under 65 utilizing commercial plans will also see changes. Statewide, Affordable Care Act (ACA) premiums are projected to rise by roughly 10%, alongside higher deductibles and out-of-pocket limits.

Plus, the Colorado Premium Assistance Program is decreasing its offerings in 2027.

In 2025, Gov. Jared Polis signed the Colorado Assistance Program into law, known as House Bill 25B-1006. It established a state-funded program that offered savings on monthly premiums for eligible customers who bought a health plan through Connect for Health Colorado, the state's health insurance marketplace created under the ACA

In 2026, Colorado Premium Assistance offered $80 per month off monthly premiums for the primary household member and $29 per month for each additional family member covered under the same policy.

"Next year, that'll be decreasing to $70 for the primary household member and $25 per month for the additional family members," Allen said.

Connect For Health Colorado's enrollment period opens Nov. 1 and closes Jan. 15. Marketplace customers can explore potential options early with the marketplace's online estimate and explore tool at prd.connectforhealthco.com/EstimateAndExplorePortal/landingOverview.

Faced with a highly volatile healthcare landscape, Allen advises all beneficiaries to take three concrete steps before making a final decision on their 2027 coverage:

Thoroughly review Annual Notice of Change letters to confirm whether a current plan is continuing and how benefits or costs will fluctuate. If a plan remains available and still covers the person's doctors, prescriptions, and other needs at an acceptable cost, staying put may make sense.Separately verify that preferred doctors, specialists, and hospitals remain in-network for the upcoming year.Cross-reference current medications against the plan's new formulary to determine what out-of-pocket pharmacy costs will be.

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