By the Kryder Cares Data Desk · Reviewed by Kris Kryder, licensed agent · Updated
Key points
- 2026: up to a $615 deductible, then a $2,100 yearly out-of-pocket cap on covered drugs.
- 2027: up to a $700 deductible and a $2,400 cap (CMS Rate Announcement).
- Covered insulin costs no more than $35 a month, with no deductible.
- Each plan has its own drug list and pharmacy network — compare with your actual prescriptions.
Two ways to get Part D
You can get Medicare drug coverage through a stand-alone Prescription Drug Plan that works with Original Medicare (and a Medigap policy, if you have one), or through a Medicare Advantage plan that includes drug coverage. If you’re in a Medicare Advantage HMO or PPO, you generally can’t add a separate drug plan; you get drugs through that plan.
Plans are sold by private insurers approved by Medicare, and each one sets its own premium, deductible, drug list and pharmacy network within federal limits.
Formularies and tiers
Each plan’s list of covered drugs is called a formulary. Every plan must cover a wide range of drugs people with Medicare take, including most drugs in protected classes such as cancer, HIV/AIDS and depression treatments. Plans can change their drug lists during the year under Medicare’s guidelines — for example when a new generic comes out — and must tell you about changes that affect drugs you take.
Many plans sort drugs into tiers. Generally, a drug on a lower tier (often generics) costs you less than one on a higher tier (preferred brands, non-preferred brands, then specialty drugs), and each plan divides its tiers its own way. That’s one reason two neighbors with different prescriptions may fit different plans. Plans can also use prior authorization, step therapy (trying a less expensive drug first) and quantity limits, and you or your prescriber can ask for an exception.
What you pay in 2026 and 2027
Your yearly drug costs move through stages. First is the deductible, if your plan has one. Then you pay copays or coinsurance until your out-of-pocket spending reaches the yearly cap, after which you pay nothing more for covered drugs that year. Premiums don’t count toward the cap.
The Medicare Prescription Payment Plan lets you spread out-of-pocket drug costs into monthly payments through the year instead of paying at the pharmacy counter; ask your plan about signing up.
| Limit | 2026 | 2027 |
|---|---|---|
| Maximum deductible | $615 | $700 |
| Yearly out-of-pocket cap on covered drugs | $2,100 | $2,400 |
| Covered insulin | $35 a month per product, no deductible | $35 a month per product, no deductible |
| Base beneficiary premium (used for the late penalty) | $38.99 | $41.33 |
Don’t go without creditable coverage
If you go 63 days or more in a row without Part D or other creditable drug coverage (coverage expected to pay at least as much as standard Part D) after your Initial Enrollment Period ends, you may owe a late enrollment penalty for as long as you have Part D. It’s 1% of the national base beneficiary premium for each full month you went without, rounded to the nearest $0.10, and recalculated every year.
Employer and union drug plans tell you each year whether they’re creditable — keep those letters. Try our Part D penalty calculator or read the late penalties guide.
Help paying for drugs
Extra Help is a federal program that lowers Part D premiums, deductibles and copays for people with limited income and resources. For 2027, people with Extra Help pay no plan premium or deductible on qualifying plans and no more than $5.80 for each generic and $14.40 for each brand-name drug. Learn more in our guide to help with Medicare costs.
How to compare plans for 2027
Start with your list: every prescription, dose and how often you take it, plus the pharmacy you use. Then compare each plan’s estimated yearly cost — premium plus what you’d pay for those drugs — rather than the premium alone. Check that your pharmacy is in network and whether it’s a “preferred” pharmacy.
Kris does this comparison every fall for clients across northwest Ohio. Send your medications through the Rx drug lookup form, visit the Part D page, or read what’s new in Part D for 2027.
Your next step
Have questions about your own situation? Contact Kris or schedule a no-cost meeting. You can also read more about Medicare Part D and Medicare Advantage.
Sources
- CMS — Costs for Medicare drug coverage
- CMS — What Medicare drug plans cover
- CMS — How Medicare drug plans work (tiers and drug lists)
- CMS — Calendar Year 2027 Rate Announcement (PDF)
- CMS — Medicare Part D 2027 national average monthly bid amount
- CMS — Insulin coverage
- CMS — Avoid late enrollment penalties
- CMS — Help with drug costs (Extra Help)
- CMS — Compare types of Medicare Advantage Plans
We do not offer every plan available in your area. Currently we represent 14 organizations which offer 119 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. This is a proprietary website and is not associated, endorsed or authorized by the Social Security Administration, the Department of Health and Human Services or the Center for Medicare and Medicaid Services. This site contains decision-support content and information about Medicare, services related to Medicare and services for people with Medicare. If you would like to find more information about the Medicare program please visit the Official U.S. Government Site for People with Medicare located at www.medicare.gov.
This guide is general education, not a recommendation for any specific plan or policy. Figures were current as of October 19, 2026; plan details and government amounts change every year.