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

It applies to every stand-alone Part D plan and every Medicare Advantage plan with drug coverage, in every state. It counts what is paid toward your deductible, copays and coinsurance for drugs on your plan's list, whether you pay it or it is paid for you by family, Extra Help, a State Pharmaceutical Assistance Program or the Indian Health Service (42 CFR 423.100). Your monthly premium does not count. CMS sets it each year: it took the $2,100 cap for 2026, increased it by the 2027 annual percentage increase in Part D spending (13.65%) and rounded to the nearest $50, giving $2,400.

The Part D standard benefit, 2026 compared with 2027

Part of the benefit	2026	2027
Yearly deductible (the most a plan can charge)	$615	$700
Your share after the deductible (standard plan)	25%	25%
Yearly out-of-pocket cap	$2,100	$2,400
After you reach the cap	$0 for covered drugs	$0 for covered drugs
Extra Help copay at most, generic / brand	$5.10 / $12.65	$5.80 / $14.40

How the 2027 cap works

You move through three stages. First the deductible, up to $700 in 2027 (many plans charge less, or nothing on some tiers). Then initial coverage, where a standard plan has you pay 25% of each covered drug's cost. When your own spending reaches $2,400, you enter catastrophic coverage and pay $0 for covered drugs until December 31, as Medicare.gov explains. The count starts over on January 1.

What it means for your drug costs

Under the 2027 standard benefit, you reach the cap once your covered drugs cost about $7,500 at the plan's price. A drug costing $500 a month ($6,000 a year) would cost you about $2,025 for the year and never reach the cap. A drug costing $3,000 a month reaches the cap in March, and you pay $2,400 in total. Your plan's tiers and copays change the path, but no plan can charge you more than $2,400 for covered drugs in 2027.

If a big bill early in the year is the worry, every Part D plan must offer the Medicare Prescription Payment Plan, which spreads what you owe into monthly amounts. It does not lower the total. People with Extra Help pay small fixed copays instead.

What to do next

The cap is the same in every plan, so the plan that saves you money is the one that covers your drugs on a low tier at a pharmacy you use. During Annual Enrollment, October 15 to December 7, 2026, we check each of your prescriptions against the 2027 drug lists and show you what each plan would cost for the year. In person in Chandler, AZ, or by phone or video in the 29 states plus DC where we are licensed.

How we checked this. The Rise Up Benefits Group Data Desk read every figure on this page against the CMS CY2027 Rate Announcement (Tables V-2 and V-6) and the CY2026 announcement on October 26, 2026, and recomputed the worked examples from the $700 deductible and 25% coinsurance. Viola Lucero, CLTC (NPN 18355227), founder of the agency since 2019, reviewed the page.

Related questions

Sources

1. CMS CY2027 Rate Announcement, Attachment V (Part D benefit parameters) Centers for Medicare & Medicaid Services
2. CMS CY2026 Rate Announcement, Attachment V Centers for Medicare & Medicaid Services
3. Medicare.gov: Costs in the coverage stages of Part D Centers for Medicare & Medicaid Services
4. 42 CFR 423.100, definition of incurred costs Electronic Code of Federal Regulations
5. 42 CFR 423.137, Medicare Prescription Payment Plan Electronic Code of Federal Regulations

Please note: We do not offer every plan available in your area. Currently we represent 34 organizations which offer 64 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.Rise Up Benefits Group is not connected with or endorsed by the United States government or the federal Medicare program. Medicare has neither endorsed nor reviewed this information.