Costs and premiums
What is the Medicare Part D out-of-pocket limit for 2027?
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Short answer
The Medicare Part D out-of-pocket limit is $2,400 in 2027, up from $2,100 in 2026: once your out-of-pocket spending on covered Part D drugs reaches the limit, you pay nothing for covered Part D drugs for the rest of the calendar year.
Certain payments made on your behalf, like through the Extra Help program, count toward the Medicare Part D out-of-pocket limit, and no Medicare drug plan may have a deductible above $700 in 2027 ($615 in 2026).
The Medicare Prescription Payment Plan can spread your Part D out-of-pocket costs across the calendar year, but Medicare.gov says it doesn't save you money or lower your drug costs.
| Fact | Figure | Source |
|---|---|---|
| Out-of-pocket limit, 2027 | $2,400 | Medicare.gov; CMS |
| Out-of-pocket limit, 2026 | $2,100 | Medicare.gov |
| Highest deductible a plan may have, 2027 | $700 | Medicare.gov; CMS |
| Highest deductible a plan may have, 2026 | $615 | Medicare.gov |
| After you reach the limit | You pay nothing for covered Part D drugs for the rest of the calendar year | Medicare.gov |
| What counts toward it | Your out-of-pocket spending on covered Part D drugs, including certain payments made on your behalf, like through Extra Help | Medicare.gov |
How does the Part D out-of-pocket limit work?
Medicare drug plans and Medicare Advantage plans with drug coverage generally have 3 stages:
- Deductible. If your plan has a deductible, you pay all out-of-pocket costs until you reach it. No Medicare drug plan may have a deductible above $615 in 2026 or $700 in 2027, and some plans have no deductible.
- Initial coverage. After the deductible, you pay 25% of the cost as coinsurance for generic and brand-name drugs until your out-of-pocket spending on covered Part D drugs reaches the limit: $2,100 in 2026, $2,400 in 2027.
- Catastrophic coverage. You automatically move to this stage and don't have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.
What counts toward the limit?
Your out-of-pocket spending on covered Part D drugs counts, including certain payments made on your behalf, like through the Extra Help program. Contributions from a State Pharmaceutical Assistance Program may also count, depending on the program. Each month you fill a prescription, your plan sends an Explanation of Benefits that shows your coverage stage and what counts toward your out-of-pocket costs.
Why is the limit higher in 2027?
CMS updates the Part D out-of-pocket threshold and the highest allowed deductible each year. It set them at $2,400 and $700 for 2027, up from $2,100 and $615 in 2026. The 2027 amounts apply from January 1, 2027.
Can I spread my drug costs over the year?
Yes. The Medicare Prescription Payment Plan is a payment option that works with your current Medicare drug coverage to spread your out-of-pocket costs for covered drugs across the calendar year (January to December). Medicare.gov says it may help you manage monthly expenses but doesn't save you money or lower your drug costs. How the Medicare Prescription Payment Plan works.
Who can get help paying before the limit?
Extra Help, a Medicare program, helps pay drug costs for people with limited income and resources, and you qualify automatically if you have Medicaid, a Medicare Savings Program or Supplemental Security Income. See help paying for Medicare.
Good to know
More questions people ask
Is the 2027 Part D out-of-pocket limit the same in every plan?
Does the limit apply to Medicare Advantage plans with drug coverage?
Does the limit reset every year?
Related questions
In depth
- Medicare.gov: Part D costs and coverage stages
- CMS: Announcement of CY 2027 Medicare Advantage and Part D payment policies
- Medicare.gov: Medicare Prescription Payment Plan
- Medicare.gov: Help with drug costs (Extra Help)
Figures are Medicare’s, set nationally, and were checked against these pages on October 2026. For your own situation, contact Medicare.gov or 1-800-MEDICARE (TTY 1-877-486-2048).
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This page was last updated: October 2026.