Medicare Part D Plans for 2027: Compare Premiums, Drug Costs and the $2,400 Cap

For 2027, Medicare Part D has a $2,400 annual out-of-pocket threshold for covered prescription drugs and a $700 deductible under the defined standard benefit. Those numbers are useful safeguards, but they do not tell you which drug plan will cost you less. Your prescriptions, the plan’s formulary, its preferred pharmacies and the monthly premium can make two apparently similar plans hundreds of dollars apart over a year.

Medicare’s 2027 Plan Finder is available now, and annual Open Enrollment runs October 15 through December 7, 2026, for coverage beginning January 1. Before choosing a plan, enter each medicine at its actual strength and frequency, then compare the total estimated annual cost at the pharmacy you expect to use. If you have a Medicare Advantage plan with drug coverage, review the entire health plan as well as its prescriptions; switching drug coverage is not always a stand-alone decision.

The 2027 rules that change the calculation

Part D provision	2027 rule	What it means when comparing plans
Annual out-of-pocket threshold	$2,400	Once eligible out-of-pocket spending reaches the threshold, you owe no further cost sharing for covered Part D drugs for the rest of the year. Premiums and noncovered drugs remain outside this protection.
Defined standard deductible	$700	This is the standard-benefit figure, not a requirement that every plan charge a $700 deductible. Check each plan’s actual deductible and which drug tiers it applies to.
Covered insulin	No more than $35 for a month’s supply of each covered insulin product	The Part D deductible does not apply to covered insulin. Confirm that the specific product is covered by the plan.
Recommended adult vaccines covered under Part D	$0 cost sharing	Check how the vaccine is covered and where to receive it. Some vaccines are covered through Part B instead.
Medicare Prescription Payment Plan	Optional monthly billing of out-of-pocket drug expenses	Can smooth cash flow; does not reduce what you owe for prescriptions.

The 2027 CMS rate announcement establishes the $700 standard deductible and $2,400 threshold, up from $615 and $2,100 in 2026. The threshold is measured using Medicare’s eligible true out-of-pocket spending rules, which can include certain qualifying payments made on your behalf. It should not be read as a $2,400 ceiling on everything you spend at a pharmacy or on health care generally.

A $2,400 drug-spending limit can still leave you with substantial total costs. Someone paying a $45 monthly Part D premium would spend $540 on premiums during the year, on top of covered-drug cost sharing and any charges outside the Part D benefit. Original Medicare medical bills, Medigap premiums and Medicare Advantage medical cost sharing have separate rules and are not absorbed into the Part D limit.

Worked comparison: the higher-premium plan saves $372

Suppose the same three covered prescriptions are available in two hypothetical stand-alone Part D plans. Based on the full-year drug-cost estimates, including their respective deductibles and cost-sharing schedules, Plan A would require $1,080 in covered-drug spending from the enrollee, while Plan B would require $384. Both estimates assume the same regular pharmacy and no additional drug purchases.

Illustrative 2027 costs	Plan A	Plan B
Monthly plan premium	$15	$42
Annual premiums	$180	$504
Estimated annual covered-drug cost sharing	$1,080	$384
Estimated annual total	$1,260	$888

Plan B costs $27 more every month in premiums yet saves $372 for the full year: $1,260 minus $888. That result reverses if the person’s prescriptions or pharmacy change enough to wipe out the drug-cost advantage. The figures are constructed examples, not prices quoted by any insurer; Medicare Plan Finder is the appropriate place to calculate real 2027 plan comparisons.

Now consider someone whose eligible covered-drug cost sharing reaches $2,400 under either plan. If two otherwise suitable plans both put that person at the same annual threshold, the plan charging $15 per month in premiums would have a $2,580 premium-plus-drug total, versus $2,904 at a $42 premium. In that specific high-cost situation, paying extra premiums buys no savings on covered-drug cost sharing; formularies, access restrictions and pharmacy arrangements could still make one plan preferable.

Run a second comparison using your actual pharmacy

Plans can use preferred and standard retail pharmacy arrangements, and the same medication can carry different cost sharing between them. Before switching pharmacies, verify that the cheaper price applies to the exact drug, dosage, supply length and year you’re comparing. Also check whether a mail-order option is available and whether the medicine has quantity limits, prior authorization or step-therapy requirements.

For example, a $40 difference in monthly cost for a medicine would add up to $480 over twelve fills if nothing else changed. But if the drug’s price only changes the point at which you reach the $2,400 Part D threshold, your actual annual savings may be smaller. Look at the plan’s whole-year estimate rather than multiplying one month’s pharmacy quote without accounting for deductibles and the cap.

A drug missing from a plan’s formulary presents a different problem. What you pay for an uncovered prescription generally does not count toward the Part D out-of-pocket threshold, so a seemingly inexpensive plan can leave you exposed to costs outside the cap. Ask the prescriber and plan about a covered alternative, a formulary exception and any appeal rights before relying on an estimated annual total that omits an important medication.

Paying monthly is different from paying less

The Medicare Prescription Payment Plan allows people with Part D coverage to spread covered-drug out-of-pocket expenses across monthly bills instead of paying them at the pharmacy. All plans offer it, participation is voluntary, and your premium is billed separately. The program may be particularly useful for someone facing large prescription bills early in the calendar year, but Medicare is explicit that it does not lower the year’s drug costs.

There are other ways a person may qualify to spend less. Medicare’s Extra Help program can reduce premiums, deductibles and prescription copays for eligible people with limited income and resources, and state assistance may also be available. If you already receive Extra Help, compare the plans using the assistance you actually qualify for rather than the standard-benefit figures above.

CMS-negotiated prices for an additional 15 selected Part D drugs take effect January 1, 2027, including certain products in the Ozempic, Rybelsus and Wegovy group. The CMS selected-drugs list documents the covered products and negotiated prices. A negotiated price does not by itself establish that a particular drug is covered for your diagnosis by every plan, or tell you your exact copay; check the specific drug and coverage conditions in Plan Finder.

How to choose by December 7

1. Make an exact medication list. Include brand or generic name, dose, number of fills, and whether you require a particular formulation.
2. Enter the list into Medicare Plan Finder. Select 2027, your ZIP code and your preferred pharmacy or pharmacies.
3. Compare annual totals. Include twelve months of premiums and the estimated amount you pay for covered drugs; review the deductible and timing of larger bills.
4. Inspect coverage restrictions. Confirm the formulary, drug tier, prior authorization and whether any essential drug is excluded. Call the plan about expensive or unusual prescriptions.
5. Check your current plan’s notice. Its Annual Notice of Change may disclose a new deductible, revised formulary, pharmacy terms or nonrenewal. Our 2027 Medicare plan-change guide explains what to do if coverage is ending.
6. Protect the rest of your Medicare coverage. A stand-alone Part D switch under Original Medicare is different from changing an entire Medicare Advantage plan. Our Medicare versus Medicare Advantage guide explains the broader coverage choices; ask about Medigap rights before leaving an Advantage plan.

For most people reviewing an existing plan, the practical deadline is December 7, 2026, with changes effective January 1, 2027. If you need individualized help comparing complicated medications, contact your State Health Insurance Assistance Program or call 1-800-MEDICARE; both are sources of assistance independent of any offer on this site. Keep a copy of the selected plan’s drug list, pharmacy choice and enrollment confirmation so you can check January charges against what you were quoted.