Medicare Part D limits what you pay out of pocket for covered prescription drugs during a calendar year. The annual limit and deductible can change each year, so check the figures for the year your coverage is in effect.
2026 and 2027 figures
| Calendar year | Annual out-of-pocket threshold | Maximum standard deductible |
|---|---|---|
| 2026 | $2,100 | $615 |
| 2027 | $2,400 | $700 |
The 2027 amounts were finalized by CMS. These are the annual threshold and maximum standard deductible; a specific plan may use a lower deductible or different cost-sharing. Check the plan’s current Evidence of Coverage and formulary for its actual terms.
What counts toward the annual limit?
The annual threshold is based on Part D’s defined out-of-pocket spending rules, not every amount someone pays for medication. In general, cost sharing for covered Part D drugs and certain qualifying payments made on the enrollee’s behalf can count. Premiums, drugs not covered by the plan, and other excluded amounts do not count. The plan’s rules and CMS guidance determine whether a particular payment qualifies.
Check that each prescription is covered, review its tier and pharmacy options, and ask the plan how any assistance or other payment is treated. Copays, coinsurance, premiums, and covered drugs vary by plan.
The three Part D payment stages
Part D has a deductible stage, an initial coverage stage, and a catastrophic coverage stage. After the deductible, the enrollee and plan share covered-drug costs under the plan’s terms. Once the enrollee reaches the annual out-of-pocket threshold, the enrollee pays $0 for covered Part D drugs for the rest of that calendar year.
The former coverage-gap phase was eliminated as part of the Part D redesign that took effect in 2025. Older descriptions of a coverage gap or manufacturer discounts in that phase are no longer an accurate summary of the current benefit.
Why review your plan each year?
The annual threshold does not make all Part D plans identical. Premiums, formularies, drug tiers, pharmacy networks, prior authorization rules, and other plan terms can differ and change from year to year. Review your medications and the plan’s current materials before enrolling or renewing.
For a general overview of how prescription coverage fits with Medicare, visit our Medicare plans page, or schedule a free review to discuss your coverage. For official plan and benefit information, use Medicare.gov’s Part D cost guide and CMS’s Part D drug spending resources.
Informational purposes only. This article is general education, not insurance, legal, or financial advice, and is not an eligibility or coverage determination. Plan costs and coverage vary. Kayla Price is a licensed insurance agent (NPN 18530055) with Price Services Group, an independent agency not connected with or endorsed by the U.S. government or the federal Medicare program. We do not offer every plan available in your area. Contact Medicare.gov or 1-800-MEDICARE (1-800-633-4227) for a complete view of your options.