Quick answer: For 2027, the Medicare Part D out-of-pocket cap rises to $2,400 from $2,100, and the maximum Part D deductible rises to $700 from $615. CMS is also ending the temporary Part D Premium Stabilization Demonstration after 2026, so stand-alone drug plan premiums may move more than usual. Open Enrollment runs October 15 through December 7, 2026, which is your chance to compare plans.
Here is what is changing, what it means for your costs, and what to check before you decide.
Part D at a Glance: 2026 vs 2027
| Item | 2026 | 2027 |
|---|---|---|
| Maximum Part D deductible | $615 | $700 |
| Annual out-of-pocket cap | $2,100 | $2,400 |
| National base beneficiary premium | $38.99 | $41.33 |
| Average stand-alone drug plan premium (projected) | $35.09 | $36.00 |
| Average Part D premium in Medicare Advantage plans, after rebates (projected) | $11.32 | $7.00 |
| Premium Stabilization Demonstration | Scaled back | Ends after 2026 |
Deductible and cap amounts are from Medicare.gov. Premium figures are from CMS announcements in September 2026 and its Part D bid fact sheet. They are national averages, so your own premium depends on the plan and your county.
How the Part D Cost Stages Work
- Deductible. Many plans have a deductible of up to $700 in 2027, and some plans have none. You pay full price for covered drugs until you meet it.
- Initial coverage. After the deductible, you generally pay a copay or 25% coinsurance, depending on the drug and plan.
- Catastrophic coverage. Once your covered out-of-pocket drug costs reach the annual cap, you pay nothing for covered Part D drugs for the rest of the calendar year. Payments made on your behalf, such as through Extra Help, count toward the cap.
The cap applies to covered drug costs, not to your monthly premium, so you still pay the plan premium all year. Covered insulin is also limited to $35 for a one-month supply.
Example: How Drug Costs Add Up Under the 2027 Rules
This table shows how the standard benefit works for a plan with the maximum $700 deductible and 25% coinsurance. It is an illustration, not a quote. Many plans charge flat copays by tier, some have no deductible, and premiums are not included.
| Covered drug costs in the year | What you would pay |
|---|---|
| $1,500 | $900 ($700 deductible plus 25% of the remaining $800) |
| $5,000 | $1,775 ($700 plus 25% of the next $4,300) |
| $7,500 | $2,400 (you reach the cap) |
| $15,000 | $2,400 (you pay nothing more for covered drugs) |
In this example you reach the cap once covered drug costs total about $7,500: the $700 deductible plus $1,700, which is 25% of the next $6,800.
What the End of the Premium Stabilization Demonstration Means
Since 2025, the federal government has used a temporary demonstration to lower base premiums and limit how much stand-alone drug plan premiums could rise. CMS says it will discontinue the demonstration at the end of 2026 because the market has more experience with the redesigned benefit. CMS projects the average stand-alone premium will rise by less than $1, but the average hides large differences between plans. Some plans may raise premiums more, which is a good reason to compare instead of letting your plan renew automatically.
CMS also reports that 88% of people without Extra Help can find a basic drug plan with a premium of $10.30 or less, and that the average Part D premium in Medicare Advantage plans is projected to fall after rebates.
Negotiated Prices and Payment Options
- Medicare drug price negotiation. Negotiated prices for a second group of 15 drugs begin January 1, 2027.
- Medicare Prescription Payment Plan. This option spreads your out-of-pocket drug costs across the year in monthly payments. It does not lower your total drug costs, but it can smooth large pharmacy bills.
- Extra Help. If your income and resources are limited, Extra Help can lower your premium, deductible and copays. See our guide to Medicare Extra Help eligibility.
Avoid the Late Enrollment Penalty
If you go without Part D or other creditable drug coverage for 63 days or more after you are first eligible, you may owe a late enrollment penalty for as long as you have Part D. The penalty is 1% of the national base beneficiary premium for each full month you went without coverage. As an illustration only, 12 uncovered months at the 2027 base premium of $41.33 would add roughly $5 a month. If you are turning 65, our Medicare timeline guide explains when to enroll.
If You Have Drug Coverage Through an Employer or Union
Employers and other plan sponsors that offer drug coverage to people who are eligible for Part D must send an annual notice, before October 15, saying whether that coverage is creditable. Creditable means it is expected to pay at least as much as standard Medicare drug coverage. If your coverage is creditable, you can generally keep it and delay Part D without a late enrollment penalty. If it is not creditable and you go 63 days or more without creditable coverage, a penalty may apply when you do join. Before you drop employer drug coverage, ask the plan administrator how that would affect your health coverage and your family’s.
Stand-Alone Drug Plan or Medicare Advantage With Drug Coverage?
You can get Part D coverage two ways, and the right one depends on how you get the rest of your Medicare.
| Feature | Stand-alone drug plan (PDP) | Medicare Advantage with drug coverage (MA-PD) |
|---|---|---|
| Works with | Original Medicare, with or without a Medigap plan | Replaces Original Medicare with one private plan |
| What it covers | Prescription drugs only | Hospital and medical coverage plus drugs |
| Premium | A separate drug plan premium | Often one plan premium, which varies by plan |
| Rules to check | Pharmacy network and formulary | Provider network, pharmacy network and formulary |
One rule trips people up. If you are in a Medicare Advantage HMO Point-of-Service or PPO plan and you join a separate drug plan, Medicare.gov explains that you will be disenrolled from your Medicare Advantage plan and switched to Original Medicare. A few plan types, such as Private Fee-for-Service plans without drug coverage, Medical Savings Account plans and Cost plans, can be paired with a stand-alone drug plan. Our guide to Medicare Advantage vs Medigap explains how the two paths differ.
Higher Income and Part D: The IRMAA Surcharge
If your income is above certain levels, you pay an extra monthly amount on top of your plan premium. This is the income-related monthly adjustment amount, or IRMAA. For 2026 it applies above $109,000 for single filers and $218,000 for married couples filing jointly, and it is based on your tax return from two years earlier.
| Single | Married filing jointly | Monthly add-on (2026) |
|---|---|---|
| $109,000 or less | $218,000 or less | $0 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $14.50 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $37.50 |
| Above $171,000 to $205,000 | Above $342,000 to $410,000 | $60.40 |
| Above $205,000 to under $500,000 | Above $410,000 to under $750,000 | $83.30 |
| $500,000 or more | $750,000 or more | $91.00 |
If your premiums are deducted from your Social Security or Railroad Retirement benefit, the surcharge is deducted the same way. Otherwise you receive a bill. These brackets are as summarized by NerdWallet. CMS usually announces the next year’s amounts alongside the Part B premium, which had not been published as of early October 2026.
What to Check During Open Enrollment
- Read your Annual Notice of Change. Look for changes to your premium, deductible, drug tiers and pharmacy network.
- Check each prescription on the 2027 formulary. Note its tier, cost and any prior authorization or quantity limits.
- Confirm your pharmacy. Preferred pharmacies usually have lower copays than other network pharmacies.
- Estimate your total yearly cost. Add the premium, the deductible and what you would pay across the year, remembering the $2,400 cap.
- Compare plans. Use the Medicare Plan Finder or ask a licensed agent to run the comparison. Our Annual Enrollment Period guide covers the dates and deadlines.
Get Help Comparing Part D and Medicare Advantage Plans
Drug coverage is one of the most plan-specific parts of Medicare. All Solution Plus can check your prescriptions against plans available where you live, including Medicare Advantage plans that include drug coverage, at no cost to you.
Talk to a licensed agent about your 2027 drug coverage →
Frequently Asked Questions
What is the Medicare Part D out-of-pocket cap for 2027?
The annual out-of-pocket cap for covered Part D drugs is $2,400 in 2027, up from $2,100 in 2026. After you reach it, you pay nothing for covered Part D drugs for the rest of the calendar year.
What is the maximum Part D deductible in 2027?
No Part D plan may charge a deductible above $700 in 2027, up from $615 in 2026. Some plans have a lower deductible or none, so compare plans.
Will Part D premiums go up in 2027?
CMS projects the average stand-alone drug plan premium will rise from $35.09 to $36.00, but individual plans can differ because the Premium Stabilization Demonstration ends after 2026. Compare your plan with other options during Open Enrollment.
Does the Part D cap include my monthly premium?
No. The cap applies to your out-of-pocket costs for covered drugs. You still pay your monthly plan premium throughout the year.
What is the Medicare Prescription Payment Plan?
It lets you spread your out-of-pocket drug costs over the calendar year in monthly payments instead of paying at the pharmacy counter. It does not reduce what you owe in total.
Can I change my Part D plan after December 7?
Usually only with a special enrollment period, such as moving to a new area or losing other drug coverage. If you are in a Medicare Advantage plan, the Medicare Advantage Open Enrollment Period from January 1 to March 31 lets you switch Medicare Advantage plans or return to Original Medicare and join a stand-alone drug plan. People with Medicaid or Extra Help can change stand-alone drug plans once a month.
Can I have a stand-alone drug plan with a Medicare Advantage plan?
Generally no. If you are in a Medicare Advantage HMO Point-of-Service or PPO plan and join a separate drug plan, you are disenrolled from the Medicare Advantage plan and moved to Original Medicare. A few plan types, such as Private Fee-for-Service plans without drug coverage, can be paired with a stand-alone drug plan.
Do I need Part D if I do not take any medications?
Not everyone joins right away. But if you go 63 days or more without creditable drug coverage after you are first eligible, you may owe a late enrollment penalty for as long as you have Part D. Some people choose a low-premium plan to avoid the penalty and protect against future drug costs.
Does a higher income raise my Part D premium?
Yes. In 2026, people with income above $109,000 (single) or $218,000 (married filing jointly) pay an added monthly amount called IRMAA, based on their tax return from two years earlier. The 2027 amounts have not been announced.
This article is general educational information, not personalized advice. Plan availability, costs and benefits vary by location, and figures are from CMS and Medicare.gov as of October 2026. All Solution Plus is not connected with or endorsed by the U.S. government or the federal Medicare program. See our Medicare disclaimer.
