Medicare Part D out-of-pocket cap for 2026 and 2027

Those figures come from the Centers for Medicare & Medicaid Services, which publishes the Part D benefit parameters each spring in its rate announcement for the following year, and from Medicare.gov, which repeats them for consumers. Medicare open enrollment runs October 15 to December 7, and a plan chosen in that window starts January 1. That makes this the season when the 2027 cap matters: it is the ceiling against which every plan you compare will be measured.

Three questions decide what the cap means for you: where the numbers come from, which payments count toward them, and in which month a steady drug bill would reach the limit. The arithmetic below answers each, as cost information only; MyCarePrice does not comment on which drugs anyone should take or which plan anyone should choose.

The three years side by side

The cap took effect in 2025, when the Inflation Reduction Act redesign of Part D ended the old coverage gap and replaced it with a hard annual limit on what an enrollee pays. Each year since, CMS has raised the limit and the maximum deductible by the same index. The table below is built from the defined standard benefit tables in the CMS rate announcements.

Sources: CMS Announcement of Calendar Year 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies, April 6, 2026, Tables V-2 and V-6 (2026 and 2027 columns); CMS CY2026 Rate Announcement, Table V-6 (2025 column). Checked October 22, 2026.

From 2026 to 2027 the cap rises by $300 and the maximum deductible by $85. CMS explains the method in the 2027 announcement: each 2026 amount is multiplied by the annual percentage increase for 2027, and the result is rounded, the deductible to the nearest $5 and the threshold to the nearest $50. Nothing about that adjustment depends on your plan; it is the same national figure for everyone with Part D.

What the cap measures: your spending, not the drug's price

The cap is not a limit on what your drugs cost in total. It is a limit on the part you pay. A drug with a high negotiated price might reach the cap in a month or two; a set of low-cost generics might never reach it. The plan, the drug manufacturers and Medicare share the rest, and that sharing is invisible on your receipt.

The federal regulation that defines what counts is 42 CFR 423.100, which uses the term "incurred costs." In plain terms, it counts the cost sharing for covered Part D drugs that the plan does not pay because of the deductible or the plan's cost-sharing rules, before you reach the threshold. It counts those amounts whether you pay them yourself or someone pays for you, as long as that someone is not insurance or a group health plan reimbursing you.

Payments that count toward the cap

• The deductible you pay at the pharmacy on covered Part D drugs.
• Coinsurance or copays on covered Part D drugs after the deductible.
• Amounts a family member or another person pays for you, if no insurance reimburses them.
• Payments by a State Pharmaceutical Assistance Program, the Indian Health Service or a tribal or urban Indian organization, or an AIDS Drug Assistance Program, all named in 42 CFR 423.100.
• Payments made through Extra Help, which Medicare.gov names as counting toward the cap.

Payments that do not count

• Monthly Part D or Medicare Advantage premiums. They are not cost sharing for a drug, so they sit outside the definition. You keep paying them after the cap.
• Drugs that are not covered Part D drugs under your plan, which falls outside the regulation's first condition.
• Amounts reimbursed to you by other insurance, a group health plan, or another third-party payment arrangement, which the regulation excludes.

The practical consequence of the second point is a question to ask before you fill a prescription your plan may not cover: if the drug is off the plan's drug list and the plan has not granted an exception, money you spend on it at the counter may not move you toward the cap at all. The plan can tell you whether a specific drug is covered and on which tier.

A hypothetical year: when a steady drug bill reaches the cap

The table below follows one invented enrollee through 2027 under the defined standard benefit. The inputs are labeled assumptions for the arithmetic, not prices for any drug: covered Part D drugs whose total negotiated cost is $1,500 every month, a plan with the full $700 deductible, and 25 percent cost sharing after the deductible. Many real plans use flat copays by tier instead of a straight 25 percent, so read this as the shape of a year, not a forecast of yours.

Two features of that year are worth noticing. The first is that the cost is front-loaded: $900 in January and $2,400 by the end of May, with nothing after. For a household on a fixed monthly income, the timing can matter as much as the total. That is the problem the optional Medicare Prescription Payment Plan addresses: it spreads the same out-of-pocket amount over monthly bills from the plan instead of charging it at the pharmacy counter. It does not lower the total.

The second feature is the size of the cap relative to the drug cost. The hypothetical drugs cost $18,000 over the year; the enrollee pays $2,400. The difference is paid by the plan, by manufacturers under the program that replaced the coverage gap, and by Medicare. None of that appears as a credit on the pharmacy receipt, so the clearest way to track progress is the plan's monthly explanation of benefits, which reports your year-to-date out-of-pocket total.

The same arithmetic at a lower monthly cost

Now change one input. Suppose the total covered drug cost is $300 a month instead of $1,500, still hypothetical. The enrollee pays the full $300 in January and February, which totals $600, and $100 more of March's cost to finish the $700 deductible. The remaining $200 of March and every later month are charged at 25 percent. Over the year that is $700 in deductible plus 25 percent of the other $2,900 in drug costs, or $725, for a total of $1,425. This enrollee never reaches the $2,400 cap, and the cap changes nothing for them. What changes their year is the deductible and the plan's cost sharing, which is why comparing plans on those two lines matters as much as the cap for people with moderate drug costs.

Reading a plan comparison through the cap

The cap is the same in every Part D plan, so it does not separate one plan from another. What separates them is how quickly each plan moves you toward it and what you pay before you get there. During open enrollment, Medicare's Plan Finder and each plan's Summary of Benefits show the inputs. A decision table helps keep them in order.

The last row hides an assumption that is easy to miss: the cap only protects spending on covered Part D drugs. A high-cost drug that a plan does not cover, or covers only after an exception, can leave you outside the protection. Before enrolling, check each drug on the plan's list and ask the plan in writing about tier, restrictions and the exception process. A Part D plan's written answer is the closest thing a drug benefit has to the confirm-in-writing rule this site applies to procedure prices.

Your expected drug cost is easiest to estimate from the explanation of benefits your current plan sends, which shows the total cost of each fill and what you paid. Our guide to reading an explanation of benefits walks through those columns for medical claims; a Part D statement uses the same idea of a total cost and a patient share.

Where the simple rule needs a footnote

The deductible is a ceiling, not a fixed amount

Medicare.gov's wording is precise: no Medicare drug plan may have a deductible of more than $700 in 2027. A plan may set a lower deductible, none at all, or apply it only to higher tiers. That is why the January row of the hypothetical table could look very different in a real plan, while the cap row would not.

Plans can use copays instead of 25 percent

The 25 percent figure is the defined standard benefit. Plans may offer different cost-sharing designs, such as flat copays by tier, as long as CMS approves them. The out-of-pocket threshold still applies. Under any design, the running total of what you pay for covered drugs is the number that stops at $2,400.

Insulin and vaccines have their own rules

The CMS 2027 parameter tables carry a footnote that the figures reflect additional required coverage for covered insulin products and for adult vaccines recommended by the Advisory Committee on Immunization Practices, both added by the Inflation Reduction Act. Those products follow their own cost-sharing rules within the benefit. The plan's Summary of Benefits states what you pay for them.

Extra Help changes the picture entirely

People who qualify for Extra Help, the Part D low-income subsidy, pay much smaller fixed copayments set in the same CMS tables, and their payments through Extra Help count toward the cap. For those enrollees, CMS has said Extra Help is more advantageous than the monthly payment plan, which is why checking eligibility for it comes before any other drug-cost decision.

A plan switch during the year

Most people change plans only at open enrollment, with the new plan starting January 1 and the count starting fresh. If you change plans during a year under a special enrollment period, ask the new plan in writing how it will receive and apply the out-of-pocket total you already accumulated, so your progress toward the cap is not lost on paper.

Tracking your progress toward the cap during the year

No pharmacy receipt tells you how close you are to $2,400. The running total lives with the plan, which counts every covered fill as the pharmacy submits the claim. The plan's monthly statement for any month in which you filled a prescription shows that running total, usually labeled as your out-of-pocket costs or the amount counting toward the catastrophic threshold, along with the total drug cost of each fill. Keep those statements for the year. They are the only document that lets you check whether a payment you made was counted.

Three situations are worth checking against the statement as they happen. The first is a fill paid at a pharmacy outside the plan's network, which the plan may or may not count depending on its out-of-network rules. The second is a payment made by someone else for you, such as a relative or a state assistance program, which should appear as counted if it meets the regulation's conditions. The third is a refill bought with a discount card or cash outside the plan, which the plan never sees unless it is submitted as a claim, and which therefore cannot count. If a payment you expected to count is missing, call the plan with the date, the pharmacy, and the amount, and ask for the corrected total in writing.

Questions to put to a plan before you enroll

Plan Finder answers most of the price questions, but four are better answered by the plan itself, in writing, before January 1:

1. Is each of my drugs on your 2027 drug list, at which tier, and with any prior authorization, step therapy or quantity limit?
2. What is your 2027 deductible, and does it apply to every tier or only some?
3. What will I pay for a 30-day and a 90-day supply of each drug, at a preferred pharmacy and at a standard one?
4. Where on your monthly statement will I see the total that counts toward the $2,400 threshold?

An answer to the first question matters most for anyone whose drugs are expensive. The cap is generous protection, but only for drugs the plan covers. A written answer from the plan is the document to fall back on if a pharmacy later says a drug is not covered or prices it at a higher tier than you were told.

Before you enroll for 2027

1. List each covered drug, its dose and how often you fill it, from your current plan statements.
2. For each plan you are considering, record the 2027 premium, the deductible (up to $700), and the cost sharing for each of your drugs' tiers.
3. Estimate your yearly out-of-pocket spending under each plan, then cap it at $2,400. Add twelve months of premium.
4. Confirm that every drug is on each plan's list. A drug that is not covered does not count toward the cap.
5. If your spending is concentrated early in the year, read how the monthly payment option would spread it.
6. Keep the plan's written materials for the plan you choose; they are your record if a pharmacy charge does not match.

If you also use a health savings account from earlier working years, the rules for spending it on Medicare-era costs are in our HSA and FSA guide. Prescription costs sit alongside medical costs in most household budgets; the Medicare and Medicaid cost guides cover hospital stays and coverage timing, and the prescription cost topic page collects every drug-cost guide on this site. For hospital bills that arrive alongside drug costs, our guide to checking an itemized bill for errors applies to the medical side.

The cap in brief: six answers

Where these numbers come from

• Centers for Medicare & Medicaid Services, Announcement of CY 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (April 6, 2026), Table V-2 (updated Part D benefit parameters) and Table V-6 (defined standard benefit, 2026 and 2027), plus the description of the annual percentage increase. Checked October 22, 2026.
• Centers for Medicare & Medicaid Services, CY 2026 Rate Announcement, Table V-6 (2025 and 2026 defined standard benefit). Checked October 22, 2026.
• Medicare.gov, Costs for Medicare drug coverage: 2026 and 2027 deductible ceilings and caps, catastrophic coverage after the cap, Extra Help counting toward it. Checked October 22, 2026.
• Electronic Code of Federal Regulations, 42 CFR 423.100, definition of incurred costs. Checked October 22, 2026.
• Medicare.gov, Joining a plan: open enrollment October 15 to December 7, coverage from January 1. Checked October 22, 2026.
• CMS, Fact sheet: Medicare Prescription Payment Plan final part one guidance, on Extra Help being more advantageous for eligible enrollees. Checked October 22, 2026.

If your 2027 total would reach the cap early in the year, the next useful read is how the Medicare Prescription Payment Plan calculates each monthly bill, with a January and a July sign-up worked side by side.