Out-of-pocket spending on covered Medicare Part D drugs is capped at $2,400 for 2027, up from $2,100 in 2026. The most a drug plan can charge as a deductible rises to $700 from $615. CMS set both figures in the CY 2027 Rate Announcement on April 6, 2026, and they apply to standalone drug plans and to Medicare Advantage plans that include drug coverage.
The Part B premium and deductible for 2027 would have been the more obvious topic, but CMS hadn’t announced them as of late October. The 2026 numbers came out on November 14, 2025. The Part D figures are final, and they’re the ones people need while open enrollment runs from October 15 to December 7.
What counts toward the 2027 Part D out-of-pocket cap
The cap counts what you pay at the pharmacy for drugs your plan covers: the deductible, then the coinsurance or copays. Payments made on your behalf by Extra Help count too, and so can help from a State Pharmaceutical Assistance Program, per the Medicare.gov page on Part D costs. Once the total reaches $2,400, you move into catastrophic coverage and pay nothing for covered Part D drugs for the rest of the calendar year.
Monthly premiums sit outside the cap, and so does anything you spend on drugs your plan doesn’t cover.
The counter resets every January 1.
Why the cap went up $300
The Inflation Reduction Act set the cap at $2,000 for 2025 and tied later years to Part D spending growth. Each year the prior amount is multiplied by the annual percentage increase, and the result is rounded to the nearest $50. CMS put the 2027 increase at 13.65%. I checked the arithmetic. $2,100 times 1.1365 is $2,386.65, which rounds to $2,400. The deductible follows the same index but rounds to the nearest $5, so $615 becomes $698.95 and then $700.
A 13.65% jump in one year is large, and the same index will set the 2028 cap.
A $1,000 a month drug in 2026 and 2027
Picture one brand name drug with a negotiated price of $1,000 a month, on a plan that uses the standard design: full price until the deductible is met, then 25% coinsurance. In January 2027 you pay the $700 deductible plus 25% of the remaining $300, or $775. From February on, each fill costs $250. By the end of July you’ve paid $2,275. The August fill would cost $250, but only $125 is left under the cap, so that’s what you pay, and September through December cost nothing.
Under 2026 rules the same drug costs $711.25 in January and hits the $2,100 cap in July. The difference for this person is $300 a year, all of it from the higher cap.
Insulin is handled separately. Covered insulin costs no more than $35 for a one month supply of each product, and the deductible doesn’t apply to it, according to Medicare’s insulin coverage page.
Spreading the cost over the year
A $775 pharmacy bill in January is hard on a fixed income, which is what the Medicare Prescription Payment Plan is for. Every drug plan offers it at no charge. You stop paying the pharmacy and get a monthly bill from the plan instead. It doesn’t lower the total.
The first month’s bill can’t exceed the cap minus what you’ve already spent, divided by the months left in the year. Join in January 2027 and that’s $2,400 divided by 12, or $200, so the person in the example above would owe $200 for January instead of $775. Later bills add each new month’s costs to the unpaid balance and spread it over the remaining months. The Medicare fact sheet on the payment plan walks through three examples using 2027 figures.
Your enrollment renews automatically each year unless you opt out or switch plans. Switching to a different plan during open enrollment ends it, and you’d have to sign up again with the new plan. The fact sheet also says it may not suit you if you get Extra Help or a Medicare Savings Program, if your drug costs are low or level, or if you’d be joining after September.
Extra Help copays in 2027
People who qualify for Extra Help pay no deductible and a small fixed copay instead of 25%. The Rate Announcement’s Table V-2 lists the 2027 maximums. For Extra Help enrollees who don’t have full Medicaid, and for those who do and have income between 100% and 150% of the federal poverty level, the copay is up to $5.80 for a generic or preferred multi-source drug and $14.40 for other drugs, up from $5.10 and $12.65 in 2026.
People who have full Medicaid as well as Medicare and income at or below 100% of the poverty level pay even less in 2027: $1.65 and $5.00. Those living in a nursing home or another institution, or getting certain home and community based services under Medicaid, pay nothing. What Extra Help pays on your behalf still counts toward the same $2,400 cap.
Part D premiums and the late enrollment penalty for 2027
The base beneficiary premium, a national figure used in several formulas, is $41.33 for 2027, according to the CMS bid fact sheet of July 28, 2026. It’s the most the law allows, since increases are capped at 6% a year from 2024 through 2029, and $38.99 times 1.06 comes to $41.33. CMS also said it will end the Part D Premium Stabilization Demonstration after 2026.
Your own premium depends on the plan. In a September 28 press release, CMS projected the average standalone drug plan premium at $36 a month for 2027, up from $35.09.
The base premium matters most if you owe a late enrollment penalty. It’s 1% of the base premium for each full month you were eligible but went without Part D or other creditable drug coverage, rounded to the nearest 10 cents and added to your premium every month. Someone with a 20 month gap pays 20% of $41.33, which is $8.27, rounded to $8.30 a month in 2027. The penalty follows you to any plan, though people who get Extra Help don’t pay it.
Where Part B stands
For 2026, CMS set the standard Part B premium at $202.90 a month and the deductible at $283 in its November 2025 fact sheet. The 2027 amounts will come in a similar release. Until then, any 2027 Part B number you see is a projection.
Comparing plans before December 7
Changes you make during open enrollment take effect January 1, 2027, and the plan has to receive your request by December 7. In Original Medicare, switching from one drug plan to another during this window leaves your Part A and Part B coverage alone. Your current plan’s Annual Notice of Change lists its 2027 deductible, premium and drug list changes, and the Plan Finder on Medicare.gov already has 2027 plans loaded. Enter every prescription you take with its dose, because a plan with a $0 deductible can still cost more over a year if your main drug sits on a high tier.
If you expect to reach the cap next year, the premium and the month you’d hit $2,400 matter more than the deductible. Two plans that both take you to the cap end up costing the same at the pharmacy, so the cheaper premium wins unless one of them leaves a drug off its list.
Related reading
- Social Security COLA for 2027 Is 3.6%, or $72 More on a $2,000 Check
- Social Security at 62 vs 67: How Much Smaller Is the Check?
- Government Money Programs for Low-Income Households
Every Part D plan picks its own deductible up to $700, its own copays and its own drug list for 2027, so your plan’s Annual Notice of Change or a call to 1-800-MEDICARE will show what your prescriptions will actually cost.
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