Medicare Part D 2027: $2,400 Drug Cap, $700 Deductible, No $0-Premium Plans and 9 Steps to Avoid Overpaying Before Dec. 7

Older man talking with a pharmacist as she explains his prescription bottle at a U.S. pharmacy counter

An older man reviews a prescription with his pharmacist. For 2027, the Part D out-of-pocket cap rises to $2,400 and the maximum deductible to $700, so it pays to check what your drugs will cost before open enrollment ends on Dec. 7. Photo: Rhoda Baer/National Cancer Institute (public domain).

If you have Medicare drug coverage, the next eight weeks matter more than usual. Medicare Open Enrollment runs from October 15 through December 7, 2026, and the 2027 plan data is now public. The headline from the Centers for Medicare & Medicaid Services (CMS) sounds calm: the average stand-alone Part D premium is projected to rise by less than $1 a month. But a KFF analysis published October 2 found a more mixed picture underneath that average: fewer plans, no $0-premium stand-alone plans for people without Extra Help, and premium jumps of $50 a month or more for some people who simply stay put.

Add a higher out-of-pocket cap, a higher maximum deductible and new negotiated prices on 15 widely used drugs, and 2027 is a year when doing nothing could cost you real money. Here is what is changing, who is most affected, and a step-by-step checklist to compare plans before the deadline.

The 2027 Part D numbers at a glance

These are the official figures from CMS's CY 2027 Rate Announcement (April 6, 2026) and its September 28, 2026 press release on 2027 plan premiums:

Item	2026	2027
Annual out-of-pocket cap (covered Part D drugs)	$2,100	$2,400
Maximum plan deductible	$615	$700
Average stand-alone drug plan (PDP) premium	$35.09/month	$36.00/month (projected)
Average drug premium in Medicare Advantage drug plans (after rebates)	$11.32/month	$7.00/month (projected)
National base beneficiary premium (used for the late penalty)	$38.99	$41.33
Extra Help copays (most enrollees)	Up to $5.10 generic / $12.65 brand	Up to $5.80 generic / $14.40 brand

A key point that many people miss: the $2,400 cap covers what you pay for covered drugs, not your monthly premiums. Premiums are on top. And because the cap and the deductible each rose about 14% (the deductible by 13.8% and the cap by 14.3%), people who take expensive brand-name medications will generally reach the cap a bit later in the year than they did in 2026.

Why 2027 premiums look stable on average but not for everyone

For 2025 and 2026, CMS ran a voluntary Part D Premium Stabilization Demonstration that paid extra subsidies to stand-alone drug plans and limited how much their premiums could rise year over year. In late July, CMS announced it would end that demonstration after 2026, saying plan sponsors now had enough experience with the redesigned Part D benefit. Many observers expected steep premium hikes. On average, they didn't happen: CMS projects the average stand-alone premium rising only from $35.09 to $36.00, and says 88% of beneficiaries without the low-income subsidy will have access to a basic Part D plan costing $10.30 a month or less.

KFF's October 2 analysis of the 2027 plan files found important exceptions:

Fewer choices for the fourth year in a row. The average beneficiary will have 9 stand-alone drug plans in 2027, down from 11 in 2026. Nationwide, the count falls from 360 plans offered by 17 parent companies to 316 plans offered by 15. Health Care Service Corporation is pulling its HealthSpring Extra Rx plan from 22 regions, and CVS Health is pulling SilverScript Choice from 13.
No more $0-premium stand-alone plans for people who don't get Extra Help. About 4 million enrollees who paid nothing in 2026 will pay something in 2027, whether they stay or switch.
Big jumps in some popular plans. Enrollees in AARP Medicare Rx Preferred (UnitedHealthcare) face monthly premium increases of $50 or more in all 50 states and D.C. if they keep the plan, including increases of more than $75 in 37 states. AARP Medicare Rx Saver rises $50 or more in 33 states.
Some plans get cheaper. Centene's Wellcare Value Script will cost $5.30 a month in 45 states, and enrollees in 29 states will see a premium cut if they keep it.

If you're in a Medicare Advantage plan that includes drug coverage, you're in the majority: KFF says 56% of Part D enrollees were in these plans in 2026, and most of them pay no separate drug premium. Still, check your Annual Notice of Change (ANOC), because your plan's drug list, pharmacy network and copays can change even if the premium doesn't.

How the 2027 Part D benefit works, stage by stage

Since 2025, Part D has three stages instead of four. The old "donut hole" coverage gap is gone, and CMS's CY 2027 final rule now writes these changes into regulation permanently.

Deductible stage. You pay the full negotiated price of covered drugs until you meet your plan's deductible, which cannot be more than $700 in 2027. Some plans have a lower deductible or none, and many apply it only to certain tiers.
Initial coverage stage. You pay copays or coinsurance (under the standard benefit, 25% of the drug's cost) until your out-of-pocket spending on covered drugs reaches $2,400.
Catastrophic stage. Once you hit $2,400, you pay $0 for covered Part D drugs for the rest of the calendar year.

Two protections continue: covered insulin costs no more than $35 for a month's supply, and adult vaccines recommended by the CDC's advisory committee (like shingles and RSV) have $0 cost sharing under Part D.

Quick math: what's the most you could pay in 2027?

Say you take a costly brand-name drug and choose a stand-alone plan with a $36 monthly premium, the national average. Your worst-case total for the year would be about $2,832: $2,400 in out-of-pocket drug costs plus $432 in premiums (12 × $36). In 2026, the same math with the $2,100 cap and a $35.09 premium came to about $2,521. If your plan's premium is $90 a month instead, your premium alone is $1,080 a year, which is why the premium matters as much as the cap for heavy drug users.

Weekly pill organizer with Sunday through Saturday compartments and assorted tablets and capsules, representing a Medicare Part D drug list

Make a list of every prescription you take, with the dose and how often, before you open Medicare's Plan Finder. Your exact drug list is what makes the cost comparison accurate. Photo: Stevepb via Pixabay/Wikimedia Commons (CC0).

New negotiated drug prices start January 1, 2027

The second round of Medicare drug price negotiation covers 15 Part D drugs, and the negotiated prices (called "maximum fair prices") take effect January 1, 2027. CMS says the list includes the semaglutide drugs Ozempic, Rybelsus and Wegovy, whose negotiated price for a 30-day supply is $274, compared with a 2024 list price of $959. Other drugs on the list include Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo, Breo Ellipta, Xifaxan, Vraylar, Tradjenta, Janumet and Otezla.

CMS estimates people with Part D will save about $685 million in out-of-pocket costs in 2027 under the standard benefit. The savings show up mainly if you pay coinsurance (a percentage of the price), since a lower price means a smaller percentage. If you pay a flat copay, your cost may not change much. By law, all Part D plans must include the negotiated drugs on their formularies, but your plan still decides which tier they go on. Check the tier in the plan's 2027 drug list.

Step-by-step: how to compare Part D plans for 2027

Read your Annual Notice of Change. Your plan should have sent it in late September. Look at the 2027 premium, deductible, drug tiers and pharmacy network, and whether your plan is being discontinued in your area.
Write down your exact drug list. Include the name, dose, form and how many you take per month. Include drugs you expect to start soon, if you know.
Log in to Medicare.gov and use the Plan Finder. Enter your drugs and preferred pharmacies, then sort by "lowest drug + premium cost." This annual estimate is far more useful than the premium alone. CMS says the 2027 Plan Finder will flag changes affecting your current plan more clearly.
Check restrictions. For each drug, look for prior authorization, step therapy or quantity limits. A cheap plan that requires prior approval for your main drug may not be the bargain it looks like.
Compare preferred pharmacies and mail order. Many plans charge lower copays at "preferred" pharmacies. If your local pharmacy is standard network only, your costs may be higher.
Look beyond the big brands. KFF found the lowest-premium stand-alone plans for 2027 come from Centene's Wellcare line in many states, while some AARP-branded plans got much more expensive. The name on the card doesn't matter; your total yearly cost does.
Decide on the Medicare Prescription Payment Plan. This free option spreads your out-of-pocket drug costs into monthly bills through the year. It doesn't lower your costs, but it can smooth them if you have big pharmacy bills early in the year. Medicare says participation renews automatically each year unless you change plans or opt out, so if you switch, you'll need to sign up again with your new plan.
Enroll by December 7. Joining a new plan automatically ends your old Part D plan, and new coverage starts January 1, 2027. Keep your confirmation number.
Get free help if you need it. Your State Health Insurance Assistance Program (SHIP) offers free, unbiased counseling, and 1-800-MEDICARE (1-800-633-4227) is open 24/7.

Chart comparing Medicare Part D 2026 and 2027: deductible $615 to $700, out-of-pocket cap $2,100 to $2,400, average stand-alone premium $35.09 to $36.00, Medicare Advantage drug premium $11.32 to $7.00

Chart: Dollar Lane, based on CMS's CY 2027 Rate Announcement and its Sept. 28, 2026 premium projections. Your plan's actual premium may be much higher or lower than the average.

Who should look hardest at their plan this year

You paid a $0 premium in a stand-alone plan in 2026

KFF says those plans won't exist in 2027 for anyone without Extra Help. Examples: Humana Basic Rx enrollees face increases of $6.30 to $30.60 a month in 28 states if they keep the plan, and Wellcare Value Script and Wellcare Classic enrollees in 16 states face increases of $5.30 and $7.30 a month.

You're in an AARP-branded stand-alone plan

With increases of $50 or more a month in many states, the difference could be $600 or more a year in premiums alone. Compare it against at least two or three alternatives in Plan Finder.

Your plan is leaving your area

If your plan won't be offered in 2027, you should get a notice. You can choose a new plan during open enrollment, and you also get a special enrollment period. Don't let it lapse: going 63 days or more in a row without Part D or other "creditable" drug coverage can trigger a lifetime penalty.

You have limited income

Extra Help lowers Part D premiums, deductibles and copays. In 2027, people who qualify pay a $0 plan premium and a $0 deductible, and no more than $5.80 per generic and $14.40 per brand-name drug at network pharmacies. Medicare's 2026 limits were $23,940 in income and $18,090 in resources for an individual, and $32,460 and $36,100 for a married couple; these limits may go up each year. You automatically qualify if you have full Medicaid, a Medicare Savings Program, or SSI. Otherwise, apply through Social Security. People with Extra Help can also change drug plans once per month and don't pay the late enrollment penalty.

Don't forget the Part D late enrollment penalty

If you went without creditable drug coverage for 63 days or more after your initial enrollment period, Medicare adds a permanent penalty to your premium: 1% of the national base beneficiary premium for each full month you were uncovered. For 2027, the base premium is $41.33. Someone who waited 14 months would owe 14% of $41.33, or about $5.80 a month (rounded to the nearest 10 cents), added for as long as they have Part D. Medicare.gov suggests that even people who take few drugs consider a low-premium plan to avoid the penalty.

If you have drug coverage from an employer, union or retiree plan, check its notice saying whether the coverage is "creditable." Keep that letter; it's your proof if you later join Part D.

Common mistakes to avoid

Choosing by premium alone. A $5 premium plan that puts your main drug on a high tier can cost hundreds more per year.
Assuming your plan stays the same. Formularies, tiers and pharmacy networks change every January 1.
Using a discount card instead of your plan without thinking. Medicare notes that drugs bought with discount cards (including through TrumpRx.gov offers) don't count toward your Part D deductible or out-of-pocket cap.
Ignoring income-based surcharges. Higher-income beneficiaries pay an extra Part D amount (IRMAA) on top of their plan premium, based on tax returns from two years earlier. CMS typically announces next year's amounts in the fall.
Missing December 7. After that, most people are locked in for 2027, apart from limited exceptions such as the Medicare Advantage Open Enrollment Period (January 1 to March 31) for those already in Medicare Advantage.

FAQ

Does the $2,400 cap include my monthly premium?

No. The cap applies to what you pay for covered Part D drugs (deductible, copays and coinsurance). Premiums are separate.

Do I have to re-enroll if I like my plan?

No. If your plan is still offered in 2027, you stay in it automatically. CMS notes that people who want to keep their current coverage generally don't need to re-enroll. But compare anyway, because your plan's costs may have changed.

Will Medicare's negotiated price for Ozempic or Wegovy lower my copay?

It depends on your plan. The negotiated price applies starting January 1, 2027, and helps most if you pay coinsurance. Coverage still depends on the drug being covered for your condition and on your plan's tier and rules.

Is a Medicare Advantage plan with drug coverage cheaper than a stand-alone plan?

Its drug premium is often lower ($7 a month on average for 2027, versus $36 for stand-alone plans, according to CMS). But Medicare Advantage changes your medical coverage too, with networks and prior authorization, so compare the whole package, not just the drug premium.

Bottom line

The average Part D premium barely moves in 2027, but averages hide winners and losers. With the cap rising to $2,400, the maximum deductible to $700, no $0-premium stand-alone plans for most people, and steep hikes in some well-known plans, the 30 minutes you spend in Medicare's Plan Finder between October 15 and December 7 could save you hundreds of dollars. Bring your drug list, compare total yearly cost, and get free SHIP help if you're unsure.

This article is for general educational purposes and is not financial, medical or insurance advice. Plan costs and rules vary by location and plan; confirm details with Medicare.gov, your plan, or a SHIP counselor before you enroll.

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