US Medicare Part D out-of-pocket cap rises to $2,400 in 2027; compare plans by 7 December

Every autumn, US Medicare has an Open Enrollment period, running from 15 October to 7 December. Changes made in that window take effect on 1 January 2027. The deadline is the date the plan receives your request, not the date you send it.

There are changes to drug costs this year. According to Medicare.gov, the deductible limit for Part D prescription drug plans rises from $615 in 2026 to $700 in 2027, and the annual out-of-pocket cap for covered drugs rises from $2,100 to $2,400. The checklist below is general information only, figures are as of November 2026, and no individual plan is recommended.

What you can change during Open Enrollment

• Join, drop or switch a Medicare Advantage plan, with or without drug coverage.
• Switch from Original Medicare to Medicare Advantage, or from Medicare Advantage back to Original Medicare.
• If you stay in Original Medicare, join, drop or switch a Medicare drug plan.
• Add or drop drug coverage.

Original Medicare and Medicare Advantage are two different routes. For the specific differences in coverage, doctor networks and costs, rely on the official explanation on Medicare.gov; for personal circumstances, consult a licensed professional.

Many people choose Medicare Advantage. The research organisation KFF reports that in 2026, 35.2 million of the 64.2 million eligible beneficiaries with both Part A and Part B, or 55%, were in Medicare Advantage, with enrolment up about 3% from 2025. The market is also concentrated: UnitedHealth Group and Humana together account for 46% of enrollees.

The Centers for Medicare & Medicaid Services (CMS) projects 2027 enrolment of about 34 million, around 47.4% of all people in Medicare, and says actual enrolment will likely exceed plan projections. KFF's figures are based on eligible beneficiaries with both Part A and Part B, while CMS's are based on all people in Medicare, so the two cover different groups.

Part D drug costs: three thresholds in 2027

1. Deductible: no Part D plan may charge a deductible above $700 in 2027 (it was $615 in 2026), and some plans have no deductible.
2. 25% coinsurance: after the deductible, you pay 25% of drug costs until your out-of-pocket spending for the year reaches $2,400 (it was $2,100 in 2026).
3. After the cap: once you reach the limit, you pay nothing for covered drugs for the rest of the calendar year.

The annual out-of-pocket limit for covered drugs in 2027 is $2,400.

Another option is the Medicare Prescription Payment Plan. It spreads your out-of-pocket drug costs across the year but does not reduce the total you pay; it only changes the timing.

Most premium figures are official projections

In its press release of 28 September 2026, CMS made the following projections:

• The average premium for stand-alone Part D plans rises from $35.09 in 2026 to $36 in 2027.
• The weighted average monthly Medicare Advantage premium falls from $14.37 to $12, a decline of 16.5%.
• For Medicare Advantage plans with drug coverage, the average Part D premium after Medicare Advantage rebates falls from $11.32 to $7.

These are national average projections, not actual quotes for your area. CMS also said the Part D Premium Stabilization Demonstration will end at the close of 2026.

The late enrolment penalty for drug coverage stays with you

For each full month without creditable drug coverage, the Part D late enrolment penalty is 1% of the national base beneficiary premium, and it is added to your premium for as long as you have Part D. The base premium is $38.99 in 2026; CMS announced on 28 July 2026 that it is $41.33 for 2027.

People who receive Extra Help do not pay the late enrolment penalty. Those with Medicaid, a Medicare Savings Program or Supplemental Security Income (SSI) get Extra Help automatically, and others can apply.

Checklist before 7 December

1. Open the plan comparison tool on Medicare.gov (https://www.medicare.gov/plan-compare/) and compare plans in your area.
2. Check each plan's deductible: the 2027 limit is $700, and some plans have none.
3. Estimate your annual drug costs: the $2,400 cap covers only covered drugs.
4. Separate projections from actuals: CMS average premiums are projections, so rely on the plan details in the comparison tool.
5. Before switching between Original Medicare and Medicare Advantage, check the differences on Medicare.gov.
6. Check whether you have had any months without creditable drug coverage, to avoid the late enrolment penalty.
7. See whether you qualify for Extra Help.
8. If you want to spread out drug costs, look into the Prescription Payment Plan, but it will not save you money.
9. Submit early so the plan receives your request on or before 7 December; changes take effect on 1 January 2027.

The point of Open Enrollment is not to switch plans every year, but to have a chance to check every year. The cap has risen by $300, and the premium projections go up in some cases and down in others, so the effect differs by drug use. An afternoon spent comparing next year's prescriptions with the comparison tool says more about your 2027 than any national average.

Prices and details correct as of November 2026

This article is general information, not investment, tax or insurance advice. Everyone’s circumstances differ; consult a licensed professional before making decisions.