Managed Care: Part D National Average Bids +24% Y/Y, Standalone PDP Demo Ended

Research evidence excerpt

Managed Care: Part D National Average Bids +24% Y/Y, Standalone PDP Demo Ended

J P M O R G A N North America Equity Research

28 July 2026

Managed Care

Part D National Average Bids +24% Y/Y, Standalone

PDP Demo Ended

This evening, CMS announced that the 2027 Part D national average monthly bid Managed Care and Facilities

ACamount is $296.05, up +24% y/y, while the Part D base beneficiary premium Lisa C. Gill

increased +6% y/y (the maximum allowed by the IRA) to $41.33. This increase is (1-212) 622-6466

below the +33% y/y increase for 2026 announced last July, but continues the trend lisa.c.gill@jpmorgan.com

of increases to Part D bids in recent years following the IRA redesign of the Part John Stansel, CFA AC

D plan structure. At the same time, CMS ended the Standalone Part D demo, (1-212) 622-0083

following the reduction in support in 2026. Taking a step back, we don’t think it john.stansel@jpmorgan.com

is a significant surprise that Part D bids stepped up again in 2027 (recall that, during Benjamin Rossi

1Q26 earnings, CNC indicated that the CMS risk model remains calibrated on pre- (1-212) 622-9603

benjamin.rossi@jpmorgan.com

IRA data and “still insufficient to address non–low-income trend,” hinting at

Cole Harrisfurther premium increases), particularly for Standalone Part D plans, which had to

(1-212) 622-9068

price for limited-to-no demo support in 2027. One factor to remember is that the cole.harris@jpmorgan.com

mix shift from increasing Part D premiums (and higher MLR) as part of each J.P. Morgan Securities LLC

MCO’s premium mix could mechanically shift consolidated MLRs (although we

don’t view this as a profitability headwind) and impact seasonality (incrementally

2H-weighted), similar to 2025/2026. In its announcement, CMS indicated that it