By Qamar S, 15 years in US medical billing · Last reviewed September 28, 2026
In 2027, Medicare Part D drug plans cap what you pay for covered drugs at $2,400 a year, and plans can charge a deductible of up to $700. After the deductible, the standard plan design has you pay about 25% of the drug’s cost until you reach the cap. Your premium doesn’t count toward the cap.
Estimate your own costs: try our free Medicare Part D cost estimator. Then check your exact drugs in the Medicare Plan Finder before December 7.
How a 2027 Part D plan works
| Stage | What you pay | 2027 amount |
|---|---|---|
| Deductible | Full negotiated price of your drugs | Up to $700 (many plans charge less or $0) |
| Initial coverage | About 25% of the cost (copays or coinsurance, set by your plan) | Until your share reaches the cap |
| Catastrophic | $0 for covered drugs | After you’ve paid $2,400 |
Your monthly premium is separate. It’s not counted toward the deductible or the $2,400 cap.
What’s new for 2027
- Higher cap: $2,400, up from $2,100 in 2026.
- Higher maximum deductible: $700, up from $615.
- 15 more negotiated drugs, including Ozempic, Wegovy, Rybelsus, Trelegy Ellipta and Janumet.
- Fewer stand-alone plans in many areas, so check that your plan still exists and still covers your drugs.
See the full list in Medicare changes for 2027.
The Medicare Prescription Payment Plan
If you expect big drug costs early in the year, you can ask your plan to spread your out-of-pocket costs into monthly bills instead of paying at the pharmacy. You still pay the same total. It’s most helpful if you’d hit the cap in the first few months. Ask your plan to enroll you, and you’ll be automatically re-enrolled each year unless you opt out.
How to choose a drug plan for 2027
- List every drug with the exact name, dose and how often you take it.
- Use the Plan Finder at Medicare.gov and sort by total estimated yearly cost (premium plus drug costs).
- Check each drug’s tier and whether it needs prior authorization or step therapy.
- Check your pharmacy. Preferred pharmacies can charge much lower copays.
- Look at the deductible, including whether it applies to cheap generic drugs.
- Enroll by December 7 for coverage that starts January 1.
Don’t get a late enrollment penalty
If you go 63 days or more in a row without Part D or other creditable drug coverage after you first become eligible, you’ll pay a penalty for as long as you have Part D. It’s 1% of the national base premium ($38.99 in 2026) for each month you were without coverage. Covered by a job plan? Look for your employer’s creditable coverage notice, due by October 15.
From 15 years in billing: the most common January surprise is a drug that moved to a higher tier or now needs prior authorization. If that happens, ask your doctor to request a formulary exception or a transition fill. Plans must usually give a one-time transition supply early in the year.
If your income is limited, Extra Help can lower your premiums and copays. Apply through Social Security. Free help: SHIP at shiphelp.org or 1-877-839-2675.
Frequently asked questions
How much will Medicare Part D cost in 2027?
It depends on your plan and drugs. You pay the deductible (up to $700), then about 25% of drug costs, and your yearly costs for covered drugs are capped at $2,400. Premiums are extra.
Does the Part D premium count toward the $2,400 cap?
No. Only what you pay for covered drugs counts: your deductible, copays and coinsurance.
What is the Medicare Prescription Payment Plan?
An option to spread your drug costs into monthly bills across the year instead of paying at the pharmacy. It does not lower your total cost.
What is the Part D late enrollment penalty?
If you go 63 days or more without Part D or other creditable drug coverage after you become eligible, you pay 1% of the national base premium for each month without coverage, for as long as you have Part D.
Sources: Medicare.gov: Drug coverage (Part D) · Medicare.gov: Avoid late enrollment penalties · Kiplinger: 2027 Medicare changes
This guide is educational and is not legal, financial or insurance advice. MedBillGuide is not connected to Medicare, CMS or any government agency, and we do not sell insurance. See our Disclaimer.