Medicare’s Annual Enrollment Period is underway. You have until December 7 to make changes for next year.
If you take prescriptions, this is a good year to look closely. Medicare Part D, the part of Medicare that helps pay for prescription drugs, has new numbers for 2027.
Some changes help you. Others could raise what you pay early in the year.
Here is what is changing, what it means in plain terms, and what to do before December 7.
The Quick Version: 2027 Part D Numbers
These are the limits Medicare sets for every Part D plan:
| Limit | 2026 | 2027 |
|---|---|---|
| Yearly out-of-pocket cap | $2,100 | $2,400 |
| Highest deductible a plan can charge | $615 | $700 |
| Insulin (one-month supply, each covered product) | No more than $35 | No more than $35 |
Your plan may charge less than these amounts. It can’t charge more.
What Is the Out-of-Pocket Cap?
The out-of-pocket cap is the most you will pay for covered drugs in one year.
In 2027, that cap is $2,400. Once your spending on covered drugs reaches $2,400, you pay $0 for covered Part D drugs for the rest of the year. Medicare calls this the “catastrophic coverage” stage.
A few things to know:
- Only covered drugs count. A drug must be on your plan’s drug list (called a formulary) to count toward the cap.
- Your monthly premium does not count. The premium is what you pay each month just to have the plan. You keep paying it even after you hit the cap.
- Some help from others counts. Payments made for you, such as through Medicare’s Extra Help program, count toward the cap.
The cap resets every January 1.
Why Did the Cap Go Up?
The cap started at $2,000 in 2025. The law that created it also raises it each year as drug spending grows. It went to $2,100 in 2026, and it will be $2,400 in 2027.
That is a $300 jump. If you take expensive medicines and reach the cap every year, you could pay up to $300 more in 2027 than in 2026.
Even so, the cap is a big change from a few years ago. Before 2025, there was no yearly limit at all. You may remember the “donut hole,” a coverage gap where costs went up. That gap is gone. Today, Part D has just three stages.
The 3 Stages of Part D in 2027
1. Deductible stage. The deductible is the amount you pay before your plan starts to help. In 2027, no plan can have a deductible over $700. Some plans have no deductible at all.
2. Initial coverage stage. After the deductible, you share the cost with your plan. In a standard plan, you pay 25% of the drug’s cost. Many plans use set copays instead. This lasts until your spending reaches $2,400.
3. Catastrophic stage. You pay nothing for covered Part D drugs for the rest of the year.
Your plan sends an Explanation of Benefits each month you fill a prescription. It shows which stage you are in and how close you are to the cap.
What About Premiums?
Each plan sets its own monthly premium. So the cap and deductible are the same everywhere, but premiums are not.
There is one change to watch in 2027. For the past two years, Medicare ran a special program to keep some standalone drug plan premiums steady. Medicare has said that program ends after 2026.
That means some standalone Part D plan premiums may change more than usual for 2027. Your plan’s Annual Notice of Change will show your new premium. If you haven’t opened it yet, now is the time. Our guide to understanding the Annual Notice of Change explains what to look for.
Spreading Your Costs Across the Year
Hitting a $700 deductible in January can strain a monthly budget. The Medicare Prescription Payment Plan can help.
This option lets you pay your drug costs in monthly amounts across the year instead of all at once at the pharmacy. Every Part D plan and Medicare Advantage plan with drug coverage offers it. It is free to join.
Keep in mind: it does not lower your drug costs. It only spreads them out. Call your plan to ask about signing up.
Help If Your Income Is Limited
Extra Help is a Medicare program that lowers drug costs for people with limited income and resources. In 2027, most people with Extra Help will pay no more than $5.80 for a generic drug and $14.40 for a brand-name drug. Many pay less.
You get Extra Help automatically if you have Medicaid, a Medicare Savings Program, or Supplemental Security Income (SSI). Others can apply. Learn more in What Is a Medicare Savings Program?
Don’t Skip Drug Coverage
If you don’t take many prescriptions, skipping a drug plan may seem like a way to save. It can cost you later.
Creditable coverage is drug coverage that is at least as good as Part D. If you go 63 days or more in a row without Part D or creditable coverage, you may owe a late enrollment penalty. The penalty is added to your premium for as long as you have Part D.
The penalty is 1% of the national base premium for each month you went without coverage. For 2027, that base premium is $41.33. So skipping coverage for 20 months would add about $8.30 to your premium every month. The base amount can also rise each year.
What to Do Before December 7
Use these steps to check your drug coverage for 2027:
- Make a list of every prescription you take, with the dose and how often.
- Open your Annual Notice of Change. Look for changes to your premium, deductible, and drug list.
- Check your drugs. Make sure each one is still covered and see if any moved to a higher-cost tier.
- Compare total yearly cost, not just the premium. A low premium can come with high drug costs.
- Check your pharmacy. Make sure it is still in network, or “preferred,” for 2027.
Our guide on how to check if your prescriptions are still covered walks through these steps in more detail. For the rest of your coverage, see Medicare AEP: What Should You Review?
If you choose a new plan, it must get your request by December 7. Your new coverage starts January 1.
Free Help in North and South Carolina
You don’t have to sort through this alone. Both Carolinas offer free, unbiased Medicare counseling:
- North Carolina: Seniors’ Health Insurance Information Program (SHIIP), 855-408-1212
- South Carolina: I-CARE (the state’s SHIP program), 800-868-9095
These counselors do not sell insurance. If you want help comparing specific plans and enrolling, a local licensed broker can do that for you, at no cost to you.
Let’s Review Your 2027 Drug Coverage
Part D changes every year, and small changes can add up. A quick review now can help you avoid surprises at the pharmacy in January.
Call Carolina Senior Benefits at 704-765-4689 or contact us online to compare your 2027 Part D options before December 7.
