Medicare's Part D Drug-Cost Cap Rises to $2,400 in 2027
In 2027, the most you pay out of pocket for covered Part D drugs is $2,400, up from $2,100 this year. The standard deductible climbs to $700. Here is how the cap works, why it keeps rising, and how to keep your drug costs manageable.
Medicare's ceiling on out-of-pocket prescription drug costs is going up again. For 2027, the most a Part D enrollee pays out of pocket for covered drugs is $2,400, according to figures Medicare set in its rate announcement for the year. That is $300 above the $2,100 cap in place for 2026, and $400 above the $2,000 limit that took effect in 2025, the first year Medicare ever put a hard ceiling on drug spending.
The cap matters most to people who take expensive brand-name or specialty drugs, who used to have no protection from runaway bills. It is not a fixed number, though. It rises each year with drug costs, and the 2027 increase is one of the larger jumps so far. The standard deductible is climbing too.
How the 2027 cap works
Once your out-of-pocket spending on covered Part D drugs reaches $2,400 in 2027, your plan pays 100 percent of the cost of those drugs for the rest of the calendar year. You owe nothing more for covered medications until January, when the count resets. There is no separate 5 percent coinsurance after you hit the cap; that charge went away in 2024.
The cap counts what you actually pay out of pocket, including your deductible and the copays or coinsurance you owe in the months before you reach it. Your monthly premium does not count toward it. The limit applies only to drugs your plan covers, so a medication that is not on your plan's formulary does not move you closer to the $2,400.
The cap has climbed every year since 2025
Congress created the out-of-pocket cap in the Inflation Reduction Act, and it started at $2,000 in 2025. By law the amount is tied to the growth in Part D drug spending, so it moves up each year. The table below shows the progression, along with the standard deductible.
| Year | Out-of-pocket cap | Standard deductible |
|---|---|---|
| 2025 | $2,000 | $590 |
| 2026 | $2,100 | $615 |
| 2027 | $2,400 | $700 |
The $300 increase in the cap for 2027 is bigger than the $100 step from 2025 to 2026. Medicare arrived at the new figures by applying an annual percentage increase of 13.65 percent to the 2026 amounts, then rounding as the statute directs. That percentage reflects how fast per-person Part D drug costs have been rising.
The deductible is rising to $700
The standard Part D deductible rises to $700 in 2027, up from $615 in 2026. That is what you pay for covered drugs before your plan starts sharing the cost. Not every plan uses the full standard deductible; some charge less or waive it for certain drugs, and the amount can differ from one plan to the next. People who qualify for Extra Help pay little or nothing toward it.
How to keep your 2027 drug costs manageable
A few steps can soften the blow. If the problem is a large bill early in the year, Medicare's payment plan lets you spread your out-of-pocket costs across the calendar year in monthly installments instead of paying all at once at the pharmacy counter. Our guide to the Medicare Prescription Payment Plan for 2027 covers how to sign up and who it helps.
If your income is limited, the program called Extra Help can cover most or all of your Part D premiums, deductible, and copays, which effectively removes the deductible and lowers the ceiling that matters to you. See our guide to Medicare Savings Programs and Extra Help for who qualifies and how to apply.
Open enrollment, which runs from October 15 to December 7, is the time to compare plans. Formularies, deductibles, and pharmacy networks change every year, and the plan that covered your drugs cheaply in 2026 may not be the best fit for 2027. Our guide to Medicare open enrollment for 2027 walks through how to check.
The bottom line
The 2027 cap of $2,400 still shields you from the open-ended drug bills that were possible before 2025, when Part D had no ceiling at all. But the ceiling is rising faster than many household budgets, and the higher deductible means you reach into your own pocket sooner. If your drug costs are high, review your plan during open enrollment and check whether the payment plan or Extra Help can ease the timing or the total.
This article is a news report for general information and is not medical, insurance, or financial advice. The 2027 figures come from Medicare's Contract Year 2027 rate announcement. Confirm your own plan's costs with Medicare or your Part D plan before making decisions.
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