Medicare Part D 2027: The $2,400 Cap, $700 Deductible and What Else Changes

$2,400. That is the most anyone with Medicare drug coverage will pay out of pocket for covered Part D drugs in 2027, up from $2,100 this year. The standard deductible goes up too, from $615 to $700. Both numbers come from the CMS Calendar Year 2027 Rate Announcement, published April 6, 2026, and both apply whether you get drug coverage through a standalone Part D plan or a Medicare Advantage plan with drug coverage.

Open Enrollment starts Thursday, October 15, and runs through December 7, 2026. If you're in Florida and you take more than a couple of prescriptions, the 2027 changes are worth an hour of your time before you decide to stay put. Here are the government-set numbers, what changed, and what I'd actually check.

Source: CMS, CY 2027 Rate Announcement, Table V-2 (Apr 6, 2026); CMS, Part D 2027 national average monthly bid fact sheet (Jul 28, 2026); Medicare.gov, Insulin.

The 2027 Part D numbers, next to 2025 and 2026

The Inflation Reduction Act redesigned the Part D benefit, and since 2025 there has been a hard annual cap on what you pay out of pocket for covered drugs ($2,000 that first year). Each year CMS moves the deductible and the cap by the growth in Part D spending per enrollee, a figure the statute calls the annual percentage increase. For 2027 that increase is 13.65% (a 9.37% trend combined with a 3.92% correction for earlier years), which is why this year's jump is bigger than last year's.

Source: CMS, CY 2027 Rate Announcement, Table V-2 (Apr 6, 2026); CMS, CY 2026 Rate Announcement, Table V-2 (Apr 7, 2025); Medicare.gov, Costs for Medicare drug coverage; Medicare.gov, Insulin.

• Out-of-pocket cap
• Maximum deductible

$0$1,000$2,000$3,000

202520262027

Source: CMS, CY 2027 Rate Announcement, Table V-2 (Apr 6, 2026); CMS, CY 2026 Rate Announcement, Table V-2 (Apr 7, 2025).

Show the numbers

	Out-of-pocket cap	Maximum deductible
2025	$2,000	$590
2026	$2,100	$615
2027	$2,400	$700

Two things in that table get misread a lot.

The $700 is a ceiling, not what every plan charges. Medicare.gov puts it this way: no Medicare drug plan may have a deductible higher than $700 in 2027, and some plans have no deductible at all. Depending on the drug, your plan may charge a flat copay instead of a percentage. Your plan's own deductible and copays are in its Annual Notice of Change and its Evidence of Coverage.

The $2,400 is per person, per calendar year, for covered Part D drugs. It resets every January 1. It counts only drugs your plan covers. Medicare's 2027 handbook also says drugs bought with a discount card instead of through your Medicare coverage don't count toward the deductible or the cap.

How the $2,400 cap works

Under the standard benefit there are three stages. You pay the full cost of covered drugs until you meet the deductible. Then you pay 25% coinsurance. Once your out-of-pocket spending reaches $2,400 in 2027, you move to catastrophic coverage and pay nothing more for covered Part D drugs for the rest of the year. Payments made on your behalf, such as through Extra Help, count toward the $2,400.

What does that mean in dollars? Here's the arithmetic under the plain standard benefit. This is a hypothetical: real plans use copays and tiers, and some have a lower deductible or none, so your plan's numbers will differ.

$1,000 total drug cost$775$3,000 total drug cost$1,275$5,000 total drug cost$1,775$7,500 total drug cost$2,400$15K total drug cost$2,400

Source: Maru Insurance calculation from the CMS, CY 2027 Rate Announcement, Table V-2 (Apr 6, 2026) and Medicare.gov, Costs for Medicare drug coverage.

Show the numbers

Total cost of covered drugs in 2027	You pay
$1,000 total drug cost	$775
$3,000 total drug cost	$1,275
$5,000 total drug cost	$1,775
$7,500 total drug cost	$2,400
$15K total drug cost	$2,400

Under that design, someone hits the cap once the total cost of their covered drugs for the year reaches about $7,500 ($700 + 25% of $6,800 = $2,400). In 2026 the same point was about $6,555. So if you take one expensive brand-name drug, the cap is the number that matters most. If you take a few low-cost generics, the deductible and the copay tiers matter more, and the cap may never come into play.

For someone who hits the cap every year, 2027 means $300 more out of pocket than 2026. If that's you, budget for it now.

The base beneficiary premium and the end of the stabilization demo

On July 28, 2026, CMS released the 2027 Part D bid figures. Two of them are government-set and worth knowing:

• National average monthly bid amount: $296.05. This is an enrollment-weighted average of plan bids for the basic Part D benefit. CMS uses it to calculate the government subsidy paid to plans. You never pay this number directly.
• Base beneficiary premium: $41.33, up from $38.99 in 2026. That's a 6.0% increase, which is the maximum allowed: the Inflation Reduction Act caps the annual increase at 6% per year from 2024 through 2029.

The base beneficiary premium is a starting point for a statutory formula, not what your plan charges. Your plan's actual premium can be higher or lower. Where you'll feel it directly is the late enrollment penalty (below), which is calculated from this figure.

The other news in that release: CMS is ending the Part D Premium Stabilization Demonstration. It was a voluntary program for standalone drug plans that started in 2025 to soften premium swings after the benefit redesign. CMS said its bid analysis showed plans had enough experience under the new benefit, so the demonstration stops at the end of 2026 and does not apply in 2027. If you're in a standalone drug plan, that's one more reason to read your plan's 2027 Annual Notice of Change instead of assuming the premium carried over.

Insulin: still $35

The insulin rule doesn't change in 2027. Per Medicare.gov, you pay no more than $35 for a one-month supply of each Part D-covered insulin product, and you don't pay a deductible for insulin. A three-month supply generally costs no more than $105. The same $35 limit applies to insulin covered under Part B through a pump that counts as durable medical equipment. The 2027 Rate Announcement notes that the 2027 Part D parameters already reflect the extra plan coverage required for covered insulin.

Two practical points. The limit is per product, so two different insulins can mean two $35 copays. And it applies only to insulin your plan covers, so check that your specific insulin is on the 2027 formulary.

15 negotiated drug prices start January 1

The second round of Medicare drug price negotiation covered 15 Part D drugs, and the prices CMS agreed with the manufacturers take effect on January 1, 2027. These are government-negotiated prices for the drugs themselves, not anything tied to a particular plan. According to the CMS fact sheet, about 5.3 million of the 53 million people with Part D used at least one of these drugs in 2024, and they paid $1.7 billion out of pocket for them.

Source: CMS, Negotiated Prices for Initial Price Applicability Year 2027 fact sheet. List prices are 2024 wholesale acquisition costs for a 30-day supply. Names separated by semicolons are counted by CMS as one selected drug.

Read that table carefully. The negotiated price is the price of the drug itself, not your copay. What you pay still depends on your plan's tier and cost-sharing for that drug. Where the drug is under coinsurance, a lower price usually means a lower coinsurance amount; under a flat copay it may not change at all. CMS estimates people with Part D would pay about $685 million less out of pocket in 2027 under the standard benefit design because of these prices. That is CMS's estimate across all enrollees, not a promise for any one person.

Every Medicare drug plan, standalone or Medicare Advantage, must include these selected drugs on its formulary. Being on the formulary doesn't tell you the tier or whether prior authorization applies, so look up your drug in the plan finder.

One more change for 2027: the CMS selected-drugs page lists four first-round drugs removed from the negotiation program effective January 1, 2027 (a drug leaves the program in situations such as a generic or biosimilar version being approved and marketed): Stelara, Entresto, Xarelto, and the NovoLog/Fiasp insulin products. If you take one of them, check how your plan covers it, and any generic or biosimilar version, for 2027. The third round of negotiation is happening during 2026, with any new prices taking effect starting in 2028.

The Medicare Prescription Payment Plan in 2027

The Medicare Prescription Payment Plan lets you pay your out-of-pocket drug costs in monthly installments across the calendar year, instead of paying at the pharmacy counter. Every Part D plan and Medicare Advantage plan with drug coverage has to offer it, it's voluntary, and there's no charge to use it. It does not lower what you owe. It only changes when you pay it.

The bill follows one formula for every plan: what you would have paid for the prescriptions you filled, plus any balance from the previous month, divided by the months left in the year. Example (hypothetical): you opt in before January 1 and fill a prescription in January that would have cost you $1,200 at the pharmacy. Your January bill is $100 ($1,200 ÷ 12). If you fill nothing else, February is also $100 ($1,100 ÷ 11). In 2027 you'll never pay more in total than the $2,400 cap.

Source: 42 CFR 423.137(d); Medicare.gov, Before using this payment option; 2027 cap from CMS, CY 2027 Rate Announcement, Table V-2 (Apr 6, 2026).

The switching rule is the trap. If you used the payment plan in 2026 and change drug plans during Open Enrollment, you're starting over: contact the new plan and opt in, or you'll be paying at the pharmacy again in January. Medicare.gov says you're most likely to benefit if your drug costs are high early in the calendar year.

The late enrollment penalty, worked out

If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, Medicare adds a penalty to your Part D premium when you do join. The formula is 1% of the national base beneficiary premium, times the number of full months you went without coverage, rounded to the nearest 10 cents. You generally pay it for as long as you have Medicare drug coverage, and because the base premium can rise each year, so can the penalty. People who get Extra Help don't pay it.

Source: formula from Medicare.gov, Costs for Medicare drug coverage; base beneficiary premium from CMS, Part D 2027 national average monthly bid fact sheet (Jul 28, 2026). Hypothetical example; Maru Insurance calculation.

About $8.30 a month sounds small. It adds up to roughly $100 a year, it follows you from plan to plan, and it can grow every year. The fix is simple: don't let drug coverage lapse. If you have employer or retiree drug coverage, confirm it counts as creditable before you drop or delay Part D. If you're switching to a Medicare Advantage plan this fall, make sure the new plan includes drug coverage or that you have other creditable coverage.

What to do in Florida before December 7

These rules touch a lot of people here. CMS enrollment data for June 2026 counts 4,418,191 Floridians with Part D coverage out of 5,334,437 on Medicare: 2,861,668 get it through a Medicare Advantage plan and 1,556,523 through a standalone drug plan. CMS's 2027 Florida fact sheet says 23.50% of people in standalone drug plans in the state get Extra Help.

Source: 42 CFR 423.2267; CMS, Medicare Open Enrollment in Florida, 2027; Medicare & You 2027; CMS, Negotiated Prices for Initial Price Applicability Year 2027 fact sheet.

Here's the order I'd work in:

1. Read your ANOC. It lists your plan's 2027 premium, deductible, copays and formulary changes. If you didn't get one or tossed it, call the number on your member card and ask for it.
2. Run your exact drug list through the Medicare.gov plan finder. Enter every drug, dose and quantity, plus the pharmacy you use. Compare the estimated yearly drug cost, not the premium alone. Check tier, prior authorization and quantity limits for each drug, especially any from the negotiation list above.
3. Check Extra Help. For 2026, the income limits are $23,940 for an individual and $32,460 for a married couple, with resource limits of $18,090 and $36,100 (Medicare.gov). With Extra Help in 2027 you pay no deductible and no more than $5.80 for a generic or $14.40 for a brand-name drug. If you're close to the limits, apply; the worst that happens is a no.
4. Decide about the payment plan. Keep it, drop it, or opt in again if you're changing plans.
5. Get unbiased help at no charge if you want a second set of eyes. SHINE (Serving Health Insurance Needs of Elders) is an unbiased, confidential program, at no charge, of the Florida Department of Elder Affairs and local Area Agencies on Aging, reachable at 1-800-96-ELDER (1-800-963-5337). SHINE started virtual Medicare classes on October 12, 2026. You can also call 1-800-MEDICARE.

Two Florida-specific notes. If you split the year between Florida and another state, drug plan service areas and network pharmacies matter more than usual; my post on Medicare rules for Florida snowbirds covers that. And if Hurricane Isaias or another declared emergency kept you from making a change you were entitled to, there is a disaster Special Enrollment Period; see Medicare Special Enrollment Periods in Florida.

For a plain overview of how drug coverage fits with the rest of Medicare here, see Medicare Part D in Florida and Medicare options in Florida.

Part D 2027 questions

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

$2,400 for covered Part D drugs in 2027, up from $2,100 in 2026. Once you reach it, you pay nothing more for covered Part D drugs for the rest of the calendar year.

What is the Part D deductible for 2027?

No Medicare drug plan may have a deductible higher than $700 in 2027, up from $615 in 2026. Some plans have a lower deductible or none.

What is the Part D base beneficiary premium for 2027?

$41.33, up from $38.99 in 2026. It is used to calculate the late enrollment penalty and is not the premium your plan charges.

Is insulin still capped at $35 in 2027?

Yes. Medicare.gov says you pay no more than $35 for a one-month supply of each Part D-covered insulin product, with no deductible for insulin.

Does the Medicare Prescription Payment Plan renew automatically for 2027?

If you stay in the same plan, your plan must renew you automatically and tell you that you can opt out. If you switch plans, you have to opt in with the new plan.

Federal Medicare rules and your own plan's documents control what you pay. Confirm your situation with 1-800-MEDICARE, SHINE or a licensed agent, and talk to an attorney for legal questions.

Sources

1. CMS: Announcement of CY 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (Apr 6, 2026)
2. CMS: Announcement of CY 2026 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (Apr 7, 2025)
3. CMS: Medicare Part D 2027 National Average Monthly Bid Amount Information (Jul 28, 2026)
4. Medicare.gov: Costs for Medicare drug coverage
5. Medicare.gov: Insulin
6. Medicare.gov: What's the Medicare Prescription Payment Plan?
7. Medicare.gov: Before using this payment option
8. eCFR: 42 CFR 423.137, Medicare Prescription Payment Plan
9. eCFR: 42 CFR 423.2267, required materials and content
10. CMS: Medicare Drug Price Negotiation Program, Negotiated Prices for Initial Price Applicability Year 2027 (fact sheet)
11. CMS: Selected Drugs and Negotiated Prices (page last modified Sep 22, 2026)
12. Medicare.gov: Help with drug costs (Extra Help)
13. CMS: 2027 Medicare Open Enrollment state fact sheets (Florida)
14. CMS: Medicare Monthly Enrollment (Florida, June 2026)
15. CMS: Medicare & You 2027 handbook
16. Medicare.gov: Plan finder
17. Florida SHINE program