Medicare Part D 2027: $2,400 Out-of-Pocket Cap, $700 Deductible

The 2027 numbers next to 2026

The figures below are the defined standard benefit, the template that every Part D plan must be at least as generous as. Medicare.gov says no plan may have a deductible above $700 in 2027, and some plans have none.

Source: CMS “Announcement of Calendar Year (CY) 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies” (April 6, 2026), Attachment V; Medicare.gov “How much does Medicare drug coverage cost?”; CMS fact sheet “Medicare Part D 2027 National Average Monthly Bid Amount Information” (July 28, 2026); CMS press release of September 28, 2026. The change column is our arithmetic.

How CMS got $2,400 and $700

Both numbers are formula outputs, not choices. The Rate Announcement updates the 2026 deductible and threshold by the “annual percentage increase” in average per capita Part D drug expenditures, which Table V-1 puts at 13.65% for 2027 (a 9.37% trend for 2026 plus a 3.92% revision of the prior year). The deductible is rounded to the nearest $5 and the threshold to the nearest $50.

Source: CMS Rate Announcement of April 6, 2026, Table V-1 and Section C. The unrounded values are our arithmetic.

The rounding matters a little: the unrounded threshold would have been $13.35 lower, so the $50 step rounds in the enrollee's disfavor this year. The September CPI figure that appears in the same attachment, 3.00%, is not what drives these two amounts, which is why they rise more than four times faster than that 3.00% (13.65% against 3.00%).

Where the cap bites: what the standard benefit costs at each level of drug spending

Take the standard design literally: you pay 100% up to the deductible, 25% from there, and nothing after the out-of-pocket threshold. The table applies that to total drug costs (the price the plan negotiates, before anyone pays). It is our arithmetic on the CMS parameters, a ceiling for a plan built exactly on the template. Actual plans often use flat copays, tiers or a lower deductible, and your own bill depends on the plan and the pharmacy.

Source: our arithmetic on CMS Rate Announcement Table V-6: deductible, then 25% coinsurance, capped at the threshold. Formula for the point where the cap is reached: deductible + (threshold - deductible) / 0.25, which is 615 + 1,485 / 0.25 = $6,555 for 2026 and 700 + 1,700 / 0.25 = $7,500 for 2027.

Two readings follow. For a household with modest drug spending the 2027 change is $63.75 at most, and nothing below $700. The full $300 is felt only by someone with expensive, continuing drugs, who at $7,500 of annual drug costs or more hits the cap later and at a higher number. The cap is also a hard ceiling for covered drugs: Medicare.gov describes the stage after the threshold as “catastrophic coverage” with no out-of-pocket cost for covered Part D drugs for the rest of the calendar year.

The Medicare Prescription Payment Plan, which Medicare.gov describes as a payment option that spreads out-of-pocket costs across the calendar year, does not change those totals: the page says it “doesn’t save you money or lower your drug costs.”

What the plans will charge: the premium side

The cap and deductible are the same for every plan; the premium is where plans differ. CMS released the national numbers in two steps.

Source: CMS fact sheet of July 28, 2026 and CMS press release of September 28, 2026. The last three rows are CMS statements and projections, not averages we computed. The base beneficiary premium is the starting point for plan premiums, not a price anyone is charged.

The base premium is also the number behind the Part D late enrollment penalty, which is 1% of it for each full uncovered month; our late enrollment penalty page shows the dollars at $38.99 and $41.33.

Part D IRMAA: the 2026 amounts, and what is not yet published

Part D has its own income-related monthly adjustment amount. Medicare.gov says that if your modified adjusted gross income on the tax return from 2 years ago is more than $109,000 (individuals and married people filing separately) or $218,000 (joint), you generally pay extra for drug coverage, in addition to the monthly plan premium. CMS says about 8% of people with Part D pay it. It applies to a stand-alone plan, to a Medicare Advantage plan with drug coverage and to a Medicare Cost Plan with drug coverage.

Source: CMS fact sheet “2026 Medicare Parts A & B Premiums and Deductibles” (November 14, 2025) and Medicare.gov fact sheet 11469 (August 2026). The last two columns are our arithmetic. The ceiling column adds the $2,400 cap, 12 x the $36 average stand-alone premium that CMS projects ($432.00) and the 2026 IRMAA for the tier. It is an illustration of how the pieces stack for someone who reaches the cap, not a forecast: 2027 IRMAA is unpublished, plan premiums range widely, and the IRMAA is not part of the cap.

Married people who lived with their spouse at any time in the year but file separately have only three bands: $0.00 up to $109,000, $83.30 above $109,000 and under $391,000, and $91.00 at $391,000 or more.

Three rules from the same documents decide how the surcharge behaves:

• The income-related amount is paid in addition to the plan premium and is not part of the out-of-pocket threshold. The cap covers cost sharing on covered drugs; the premium and IRMAA come on top.
• Medicare collects it by deduction from Social Security, Railroad Retirement or Office of Personnel Management benefits, or by a bill from Medicare, and Medicare.gov says not to send it to your plan. Medicare starts sending these bills in December for the next year.
• The 2027 amounts are not out. CMS published the 2026 amounts on November 14, 2025, and on October 30, 2026 no 2027 equivalent was on its newsroom. The income year will be 2025, two years back. Projected 2027 tables on other sites are estimates, not CMS figures, so this page does not use them.

Worked example (our arithmetic, 2026 amounts): a married couple filing jointly with $300,000 of modified adjusted gross income in 2024 is in tier 2. Each enrolled spouse pays $37.50 a month, $450.00 a year, so $900.00 for the couple, before either plan premium. If one spouse has $20,000 of drug costs in 2027 under the standard design, that spouse's covered-drug costs stop at $2,400, so that spouse's yearly total is the $2,400, the plan premium and the surcharge. At tier 1 the surcharge would be $174.00 each; the tier is set by the return, not by the drugs.

For the rules that move the tier (the two-year look-back, the five brackets for Part B and Part D, how a property sale or a Roth conversion lands in the tier) see our IRMAA brackets guide. If the income on the return no longer describes your situation because of an event such as retirement, a marriage or a death, our Form SSA-44 page shows what Social Security asks for.

The December 7 window

Medicare.gov and CMS give the same dates. The rules below are the published ones; which plan fits is a question for the plan documents, Medicare Plan Finder and the person's own prescriptions, and this page does not attempt it.

Source: Medicare.gov “Joining a plan”; CMS press release of September 28, 2026 for the October 15 to December 7, 2026 dates.

A gap in drug coverage of 63 or more days in a row without creditable coverage can bring a permanent late enrollment penalty (Medicare.gov). Our Medigap vs Medicare Advantage page covers the Medigap side of the same window, including why switching back is not always possible.

What a reader can do with this

• Find your tier before you read any plan comparison. The surcharge for 2027 will rest on your 2025 return, and Social Security sends a letter if you owe it. If you already know the 2025 figure, you know which tier you are in even though CMS has not published the 2027 dollar amounts.
• Budget the cap as a ceiling for covered drugs and add the rest. Under the standard design, covered drugs cannot cost you more than $2,400 in 2027; the plan premium, any late enrollment penalty and any IRMAA come on top of it, and drugs a plan does not cover do not count.
• Check whether a life-changing event applies. If your income dropped because of a listed event, the tier can be reset on a more recent year (see the Form SSA-44 page). That page lists the eight events SSA accepts.
• Know what your 2026 income does. 2026 income sets 2028 premiums, so a large gain or Roth conversion this year is a 2028 Medicare decision, not a 2027 one.
• Mark the dates. December 7, 2026 for a change to start January 1, 2027, and the plan has to receive the request by then.
• Pay premiums from the right pocket. After 65, Part D premiums can be reimbursed from an HSA; see our HSA and Medicare page.

This is analysis of public documents, not investment, legal or tax advice, and it is not medical advice or a recommendation of any drug plan.

FAQ

Sources, read and saved on October 30, 2026: CMS, “Announcement of Calendar Year (CY) 2027 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies” (April 6, 2026), Attachment V; CMS fact sheet “Medicare Part D 2027 National Average Monthly Bid Amount Information” (July 28, 2026); CMS press release “Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2027” (September 28, 2026); CMS fact sheet “2026 Medicare Parts A & B Premiums and Deductibles” (November 14, 2025), Part D income-related monthly adjustment amounts; Medicare.gov, “How much does Medicare drug coverage cost?”, “Joining a plan”, “Medicare costs” and CMS product 11469 “How income affects your Medicare drug coverage premiums” (August 2026). This is analysis of public documents, not investment, legal or tax advice.