Medicare Part D in 2027: the $700 Deductible, the $2,400 Cap and How Your Costs Work

In 2027, a Medicare Part D plan can charge a deductible of up to $700, and your yearly out-of-pocket spending on covered drugs is capped at $2,400. Under the standard benefit, you pay the full cost until you meet the deductible, then 25% coinsurance until you reach the cap, then $0 for covered Part D drugs for the rest of the year. Your monthly premiums are separate and do not count toward the cap.

The 2027 Part D numbers at a glance

The 2027 figures come from the Centers for Medicare & Medicaid Services (CMS) calendar year 2027 Rate Announcement, released April 6, 2026. They set the limits that plans must work within. Individual plans can be more generous, for example with a lower deductible, but they cannot charge more than the standard limits.

The base beneficiary premium is a national benchmark used in Medicare's calculations. It is not what you will necessarily pay: actual plan premiums vary from plan to plan and from place to place.

How your costs build up during the year

Under the standard Part D benefit, your spending moves through three stages. The figures below use "drug costs" to mean the full price of your covered prescriptions, the combined amount paid by you and your plan.

Stage 1: the deductible

At the start of the year, you pay the full cost of covered drugs until you have paid the deductible, up to $700 in 2027. Some plans have a lower deductible or none at all, so check your plan's details.

Stage 2: initial coverage

Once the deductible is met, the standard benefit has you pay 25% of the cost of each covered prescription, with your plan paying the rest. Many plans use set copays for some drugs instead of a percentage, so your actual amount at the pharmacy may differ.

Stage 3: catastrophic coverage

When your out-of-pocket spending on covered drugs reaches $2,400, you pay $0 for covered Part D drugs for the rest of 2027. The count starts over on January 1.

Worked examples using the standard benefit

The formula is simple: out-of-pocket cost = deductible + 25% of drug costs above the deductible, but never more than $2,400. These examples assume a plan with the full $700 deductible and 25% coinsurance. Your own plan may differ, and premiums are not included.

Example: $6,000 in drug costs

Someone whose covered prescriptions total $6,000 over the year pays the first $700 as the deductible. That leaves $5,300 of drug costs. Their 25% share of $5,300 is $1,325. Adding the two gives $700 + $1,325 = $2,025, which is below the cap, so they pay $2,025.

Example: $12,000 in drug costs

With $12,000 in drug costs, the formula gives $700 + 25% × $11,300 = $700 + $2,825 = $3,525. Because that is more than $2,400, the cap applies and they pay $2,400. As the table shows, the cap is reached once total drug costs hit $7,500; after that point, covered drugs cost them nothing for the rest of the year.

Comparing with 2026

Using the 2026 standard benefit, the same $6,000 in drug costs would have meant $615 + 25% × $5,385 = $615 + $1,346.25 = $1,961.25. In 2027 it is $2,025, which is $63.75 more. For someone with $12,000 in drug costs, the cap means paying $2,100 in 2026 and $2,400 in 2027, a difference of $300.

Don't forget the premium

The $2,400 cap covers what you pay for covered drugs, not your monthly plan premium. To estimate your full yearly cost, add both together.

As an illustration only, if a plan's premium were $41.33 a month (the same as the 2027 base beneficiary premium), that would be $41.33 × 12 = $495.96 for the year. Someone who reached the cap would then spend $2,400 + $495.96 = $2,895.96 in total. Your plan's premium may be higher or lower, so use its real figure when you compare.

Spreading costs with the Medicare Prescription Payment Plan

Reaching the cap early in the year can mean large pharmacy bills in the first few months. The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across monthly payments during the year instead. You opt in through your Part D plan.

For example, $2,400 spread evenly over 12 months would be $200 a month. Your actual monthly amounts depend on when you opt in and when your drug costs happen. The program changes when you pay, not how much you pay in total.

Ways to keep your drug costs predictable

The cap protects you from very high bills, but a few habits can help you plan for what you will spend before you reach it:

• Use a network pharmacy. Your plan's prices and the cap work as described only for covered drugs filled at pharmacies in its network.
• Ask about cost at each new prescription. Your doctor or pharmacist can tell you whether a drug is on your plan's list and whether other covered options exist. Never stop or switch a medicine on your own.
• Review your medicines yearly. A medicine review at your Medicare Annual Wellness Visit or with your pharmacist can confirm that every prescription is still needed.
• Keep your receipts or plan statements. Your plan's monthly summary shows how close you are to the $2,400 cap.

Choosing a plan during Open Enrollment

Medicare Open Enrollment runs from October 15 to December 7 each year, and changes take effect January 1. Because premiums, deductibles, copays and the list of covered drugs vary between plans, it is worth comparing options every year, even if you are happy with your current plan.

• Make a complete, current list of your prescriptions and doses before you compare. Our guide to managing multiple medications and our medication schedule planner can help.
• Check that each of your drugs is covered and which pharmacies are in the plan's network.
• Look at the deductible, the copays or coinsurance, and the monthly premium together.
• Ask whether you qualify for the plan's free Medication Therapy Management review if you have several chronic conditions and medicines.
• If you have questions, you can call Medicare at 1-800-633-4227.

Part D also covers recommended adult vaccines such as shingles and RSV at $0 cost-sharing, as explained in our guide to Medicare preventive screenings. Any questions about switching or stopping a medicine because of cost belong with your doctor or pharmacist, who may know of lower-cost options.

This guide is general health information for education. It is not medical advice and does not replace a visit with your doctor or pharmacist. Never start, stop or change a medicine without talking to them. In an emergency call 911. Spotted an error? Let us know.