Medicare Part D Out-of-Pocket Max 2027: $2,400 Cap Explained

The Medicare Part D out-of-pocket max for 2027 is $2,400, up from $2,100 in 2026. The highest deductible any Part D plan can charge goes up to $700, from $615. Once your covered drug costs reach $2,400, you pay $0 for covered Part D drugs for the rest of 2027 (Medicare.gov). Open Enrollment runs October 15 through December 7, 2026. That is your window to check whether your current plan still makes sense under the new numbers.

Last updated: October 24, 2026 · By Syed Kaja Moinudeen

Key takeaways

• 2027 out-of-pocket cap: $2,400 (2026: $2,100). After that you pay $0 for covered drugs.
• Maximum deductible: $700 (2026: $615). Some plans charge less, or nothing.
• Heavy drug users will pay up to $300 more in 2027. Light users who never reach the deductible may see no change in drug costs.
• The temporary Part D Premium Stabilization Demonstration ends after 2026. The projected average stand-alone plan premium still only goes from $35.09 to $36, but premiums for individual plans can change much more.
• The deadline to switch is December 7, 2026. Coverage under a new plan starts January 1, 2027.

Medicare Part D 2027 at a Glance: The New Numbers ($2,400 Cap, $700 Deductible) vs. 2026

CMS finalized these figures in the 2027 rate announcement. Plan premium projections came from its September 2026 landscape release. Here's how 2027 compares with this year:

Item	2026	2027
Annual out-of-pocket cap	$2,100	$2,400
Maximum deductible	$615	$700
Coinsurance after deductible (standard plan)	25%	25%
Base beneficiary premium	$38.99	$41.33
Projected average stand-alone Part D premium	$35.09	$36
Projected average Part D premium in Medicare Advantage drug plans (after rebates)	$11.32	$7
Extra Help max copay (generic / brand)	$5.10 / $12.65	$5.80 / $14.40
Covered insulin, per month's supply	$35 max	$35 max

Sources for the table: Medicare.gov drug costs, CMS 2027 bid fact sheet (the base premium is $2.34 higher than in 2026), Medicare.gov Extra Help and Medicare.gov insulin coverage. The 2026 Extra Help copays come from Medicare Rights Center.

Another 2027 change: negotiated prices for 15 more Part D drugs take effect January 1, 2027, on top of the first 10 that started in 2026 (Your Medicare in 2027 fact sheet).

How the $2,400 Out-of-Pocket Maximum Works (What Counts Toward It and What Doesn't)

A standard Part D plan has three stages:

1. Deductible: You pay the full negotiated price until you've paid up to $700. Many plans set a lower deductible or skip it for cheap generic tiers.
2. Initial coverage: After the deductible, you pay 25% coinsurance on generic and brand drugs in a standard plan. Many plans use flat copays per tier instead.
3. Catastrophic coverage: Once your out-of-pocket spending hits $2,400, you pay $0 for covered drugs through December 31.

What counts toward the $2,400: Your deductible, copays and coinsurance for covered Part D drugs. It also counts certain payments made on your behalf, such as through Extra Help (Medicare.gov).

What doesn't count:

• Your monthly premium.
• Drugs your plan doesn't cover. Non-formulary drugs generally don't count unless the plan approves them through a coverage determination or appeal (UnitedHealthcare).

Insulin has its own rule. Each month's supply of a covered insulin costs no more than $35, and the deductible doesn't apply to it (Medicare.gov).

In a standard plan with the full $700 deductible, you reach the cap once your covered drugs total $7,500 at the plan's prices. The math: $700 + 25% × $6,800 = $2,400.

What You'll Actually Pay in 2027: 3 Worked Examples (Low, Moderate and High Drug Costs)

These examples use a standard plan with the full deductible and 25% coinsurance. Premiums aren't included. Your plan's copays, tiers and pharmacy network will change the real numbers, so treat these as a rough guide.

Example 1: Low user ($40/month in drugs)

Two generics at $20 each per month cost $480 a year. That's below both the 2026 deductible ($615) and the 2027 deductible ($700), so you pay the full $480 either year. The higher deductible doesn't cost you anything extra. What matters most for you is the premium and whether the plan charges a deductible on generics at all. A low-premium plan with $0 generic copays could beat a cheaper-looking plan.

Example 2: Moderate user ($300/month in drugs)

Your drugs cost $3,600 for the year.

• 2027: $700 deductible + 25% of $2,900 ($725) = $1,425
• 2026: $615 + 25% of $2,985 ($746.25) = $1,361.25

That's about $64 more in 2027, or roughly $5 a month.

Example 3: High user ($2,000/month brand-name drug)

Here's how 2027 plays out month by month:

• January: $700 deductible + 25% of the remaining $1,300 = $1,025
• February: 25% of $2,000 = $500 (running total $1,525)
• March: $500 (running total $2,025)
• April: $375 brings you to the $2,400 cap
• May–December: $0

In 2026, the same drug would have cost $2,100. That's $300 more in 2027, all paid in the first four months. That's why the payment plan below matters.

Why Part D Premiums May Rise in 2027: The Federal Premium Subsidy Is Ending

In 2025 and 2026, CMS ran a voluntary Part D Premium Stabilization Demonstration for stand-alone drug plans. It gave plans extra federal money and limited how much they could raise premiums. CMS said it will end the demonstration after 2026 and return stand-alone plans to normal market pricing in 2027.

The national average monthly bid jumped to $296.05 for 2027. The base beneficiary premium rose 6% to $41.33, which is the most the law allows in one year between 2024 and 2029 (CMS). Even so, CMS projects the average stand-alone premium will rise by less than $1, to $36.

That average is weighted by enrollment, so it can hide big moves in individual plans. A plan with few members could jump sharply, and your plan could raise its premium by far more than $1. Check your plan's Annual Notice of Change for its actual 2027 premium.

Higher earners pay an extra monthly amount on top of the plan premium. For 2027, that starts above $111,000 of income for individual filers and $222,000 for joint filers (Medicare & You 2027). If you're still working and managing taxable income, see our guide to the Roth catch-up rule for 2027, since how you save can affect your reported income.

Spreading Your Costs: How the Medicare Prescription Payment Plan Fits With the 2027 Cap

The Medicare Prescription Payment Plan lets you pay your plan in monthly installments instead of paying the pharmacy at the counter. Every Part D plan offers it, and it's free to join. It doesn't lower your total cost. It just spreads it out. Your monthly bill is what you'd have paid at the pharmacy plus any unpaid balance, divided by the months left in the year.

For the high user in Example 3 who joins in January, the bills work out to about:

• January: $85
• February: $131
• March: $181
• April through December: $223 a month

That totals the same $2,400. Without the payment plan, the pharmacy bill in January alone would be $1,025.

Things to know:

• It works best if you join early in the year, ideally before September. Joining later leaves fewer months to spread the cost.
• Your enrollment renews automatically each year, unless you change plans. If you switch plans during Open Enrollment, you have to sign up again with the new plan.
• Premiums are billed separately. Pay your premium first so you don't lose coverage. If you're removed from the payment plan for not paying, you stay enrolled in your drug plan (Medicare.gov).

If medical bills are already stretching your budget, our 7-step plan for getting out of debt covers how to sort which bills to pay first.

Stand-Alone Part D vs. Medicare Advantage Drug Coverage: What Changes for Each in 2027

The same rules apply to both. The $2,400 cap, the $700 maximum deductible and the $35 insulin limit cover everyone with Part D coverage. That includes people in stand-alone plans and in Medicare Advantage plans that include drug coverage (Medicare.gov fact sheet).

Premiums are where they differ.

• Stand-alone drug plans: These were the plans covered by the stabilization demonstration. With it ending, they're the ones most likely to see premium changes. The projected average is $36.
• Medicare Advantage plans with drug coverage: Plans can use federal rebates to lower the drug part of the premium. CMS projects that average will fall from $11.32 to $7 (CMS).

A low drug premium doesn't make a Medicare Advantage plan cheaper overall. Those plans also change networks, medical copays and out-of-pocket limits. Compare the whole plan, not just the drug premium.

If you miss Open Enrollment and you're in a Medicare Advantage plan, you can switch to a different Medicare Advantage plan from January 1 to March 31 (Medicare & You 2027).

Open Enrollment Deadline Checklist: 7 Steps to Compare Plans on Medicare.gov Before December 7, 2026

1. List every drug you take. Include the exact name, dose, how many you take a month and your pharmacy. Leaving out one expensive drug can make the comparison wrong.
2. Read your Annual Notice of Change. Look for your plan's 2027 premium, deductible, tier changes and any drugs it's dropping.
3. Log in to the Medicare Plan Finder. Logging in lets it pull your saved drug list. For 2027, Medicare added ID.me, Login.gov and CLEAR as sign-in options (Medicare.gov).
4. Sort by total estimated cost. Use drug costs plus premiums, not the premium alone. In Example 3, a plan that costs $20 a month more in premium but has a $0 deductible could still come out ahead.
5. Check restrictions. Look for prior authorization, step therapy, quantity limits and preferred pharmacies for each drug.
6. Check star ratings. The 2027 star ratings went up on Plan Finder on October 8, 2026.
7. Enroll by December 7 and save your confirmation number. New coverage starts January 1, 2027. If you use the Prescription Payment Plan, sign up again with your new plan.

If you're happy with your plan and it's still offered in 2027, you don't need to do anything. Your enrollment carries over. Still check the numbers, because a plan that was right this year may not be next year. For a broader look at checking insurance before it's too late, see why waiting on insurance can cost thousands.

Extra Help (LIS) and Other Ways to Lower 2027 Drug Costs if You Have Limited Income

Extra Help is the federal program that pays most Part D costs for people with limited income and savings. In 2027, enrollees pay:

• $0 premium in many plans
• $0 deductible
• No more than $5.80 per generic and $14.40 per brand-name drug at participating pharmacies
• $0 for covered drugs once total drug costs reach $2,400

People with full Medicaid in the QMB program pay no more than $4.90 per covered drug.

The current limits listed by Medicare.gov and the Social Security Administration are:

• Annual income: $23,940 single or $32,460 married
• Resources: $18,090 single or $36,100 married

SSA notes you may still qualify for some help even if your income is higher. You can apply through Social Security.

Other options:

• Ask your doctor about lower-tier generics.
• Check whether your drug is one of the newly negotiated drugs for 2027.
• Use a 90-day supply at a preferred pharmacy if your plan offers lower copays for it.

Frequently Asked Questions About Medicare Part D in 2027

What is the Medicare Part D out-of-pocket max for 2027?

It's $2,400, up from $2,100 in 2026. Once your out-of-pocket costs for covered Part D drugs reach $2,400, you pay $0 for covered drugs for the rest of the year.

What is the Part D deductible in 2027?

No Part D plan can charge a deductible above $700 in 2027, up from $615 in 2026. Some plans charge a lower deductible or none at all, and the deductible doesn't apply to covered insulin.

Do my monthly premiums count toward the $2,400 cap?

No. Only your out-of-pocket costs for covered Part D drugs count, plus certain payments made for you, such as through Extra Help. Premiums and drugs your plan doesn't cover don't count.

Will my Part D premium go up in 2027?

It might. CMS projects the average stand-alone plan premium will rise from $35.09 to $36 as the premium stabilization demonstration ends. Individual plans can change by much more, so check your plan's Annual Notice of Change and compare plans on Medicare.gov.

Does the $35 insulin cap still apply in 2027?

Yes. A one-month supply of each covered insulin costs no more than $35, and you don't pay a deductible for it. This applies even if you get Extra Help.

If I switch drug plans, does my Medicare Prescription Payment Plan carry over?

No. Your enrollment renews automatically only if you stay in the same plan. If you change plans, contact the new plan to sign up again.

What happens if I miss the December 7 deadline?

If your plan is still offered, you stay in it for 2027 under its new costs. If you're in a Medicare Advantage plan, you can switch to a different Medicare Advantage plan from January 1 to March 31, 2027.

How much will Extra Help enrollees pay in 2027?

No more than $5.80 per generic and $14.40 per brand-name drug at participating pharmacies, with a $0 deductible. Once total drug costs reach $2,400, they pay $0 for covered drugs.

Sources

• Medicare.gov – How much does Medicare drug coverage cost?
• CMS – Medicare Advantage and Part D Expected to Remain Stable in 2027
• CMS – Part D 2027 National Average Monthly Bid Amount
• CMS – July 28, 2026 Parts C & D Announcement (PDF)
• Medicare.gov – Medicare Prescription Payment Plan
• Medicare.gov – Prescription Payment Plan fact sheet (PDF)
• Medicare.gov – Help with drug costs (Extra Help)
• SSA – Understanding the Extra Help (PDF)
• Medicare.gov – Insulin coverage
• Medicare.gov – Your Medicare in 2027: What's New & Changing (PDF)
• Medicare & You 2027 (PDF)
• CMS – 2027 Medicare Advantage and Part D Star Ratings
• Medicare Rights Center – Drug costs under Extra Help (2026 copays)
• UnitedHealthcare – Part D changes

This article is for educational purposes only and is not financial, legal or insurance advice. Confirm plan details with Medicare.gov, 1-800-MEDICARE or a licensed SHIP counselor before enrolling.