Medicare 2026

Medicare Part D in 2027: The $2,400 Out-of-Pocket Cap and What Else to Know

If you take prescription drugs and have Medicare, 2027 brings another step in the rework of Part D that began a couple of years ago. The headline change is the out-of-pocket cap, but a few other details are worth understanding before Annual Enrollment opens next fall. Here's a plain-English guide to what's set, what isn't yet, and how to think about your choices.

The $2,400 out-of-pocket cap

For plan year 2027, the most you'll pay out of pocket for covered Part D drugs is $2,400. Once your own spending reaches that amount, you pay nothing more for covered Part D prescriptions for the rest of the calendar year.

This cap is the latest step in a phased-in change. In 2025 the cap was $2,000, in 2026 it is $2,100, and in 2027 it rises to $2,400. For people who take expensive medications — specialty drugs, cancer therapies, certain injectables — the cap can make a meaningful difference compared with how Part D worked a few years ago, when there was no annual ceiling on what a person could pay at the pharmacy counter.

A few things to keep in mind about the cap:

• It applies only to drugs covered by your Part D plan. If a medication isn't on your plan's formulary, what you pay for it generally doesn't count toward the cap.
• It resets each January 1.
• It doesn't change your Part B drug costs (medications administered in a doctor's office are usually billed under Part B, not Part D).

The Part D deductible and the base premium

In 2027, the maximum deductible a Part D plan is allowed to charge is $700. Plans can choose a lower deductible — some set it at zero — but none may charge more than that ceiling.

On the premium side, the base beneficiary premium for 2027 is $41.33. That's a benchmark figure used in the Part D program's calculations; it is not what any particular plan charges. Actual plan premiums vary from plan to plan and are set by each insurer. Because premiums, formularies and pharmacy networks differ by plan and by where you live, you'll want to look at the specifics of any plan you're considering during Annual Enrollment rather than relying on a general figure.

Spreading costs across the year: the Medicare Prescription Payment Plan

Even with a $2,400 cap, hitting that limit early in the year can be a shock if a single prescription runs into the hundreds or thousands of dollars at the counter. That's where the Medicare Prescription Payment Plan comes in.

This program, which is available through your Part D plan, lets you spread your out-of-pocket drug costs across the calendar year in monthly payments instead of paying the full amount at the pharmacy. It's important to understand what it does and doesn't do:

• It does not lower what you owe. The total is the same.
• It changes the timing: instead of a large pharmacy bill in, say, January, you pay in monthly installments through December.
• You opt in through your plan. If you think it might help your cash flow, ask your plan how to sign up.

For people with steady, predictable drug costs that are modest, this program may not change much. For people facing a large upfront cost early in the year, it can make budgeting easier.

Annual Enrollment and the Annual Notice of Change

If you want your 2027 coverage choices to take effect on January 1, 2027, you make them during Annual Enrollment, which runs October 15 to December 7, 2026. This is the window to:

• Join, switch or drop a stand-alone Part D plan.
• Switch between Original Medicare and Medicare Advantage.
• Change from one Medicare Advantage plan to another.

By September 30, 2026, your current plan is required to send you an Annual Notice of Change (ANOC). Read it. The ANOC spells out what's changing for the coming year — the drug list (formulary), the premium, the deductible, copays and coinsurance, and the pharmacy network. A plan that worked well for you in 2026 may look different in 2027, and the ANOC is where you find out.

A quick, neutral word on coverage pathways

People sometimes ask whether they should get drug coverage through a stand-alone Part D plan paired with Original Medicare (often alongside a Medigap policy) or through a Medicare Advantage plan that includes drug coverage. Both are legitimate paths, and each has trade-offs:

• Original Medicare with a stand-alone Part D plan (and, for many people, a Medigap policy) typically offers broad provider access nationwide and predictable supplemental costs, but it involves separate premiums for the different pieces.
• Medicare Advantage plans bundle hospital, medical and usually drug coverage into one plan, often with extras, but they generally use provider networks and have their own rules.

Neither is universally better. The right fit depends on your medications, your doctors, your budget and how you prefer to manage care. Compare options with your own situation in mind.

What hasn't been announced yet

Some 2027 numbers are not out at this point. The standard Part B premium and deductible for 2027, and the income-related monthly adjustment (IRMAA) thresholds for 2027, have not been announced. CMS announces those figures in the fall. Be cautious with any source that quotes specific 2027 Part B or IRMAA numbers before then.

Where to go next

For official program information, start at Medicare.gov, where you can compare plans available in your area using your own drug list. You can also call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, seven days a week.

A little preparation before Annual Enrollment — reading your ANOC, listing your medications, checking your pharmacy — goes a long way toward making a confident choice for 2027.