Part D Guide
Medicare Part D Costs: 2026 and 2027 Deductible & Out-of-Pocket Threshold
Compare finalized Medicare Part D standard-benefit figures for 2026 and 2027, understand how formularies and pharmacy networks affect your costs, and review Extra Help. Plan premiums and coverage details vary.
Reviewed October 2026 · 2027 figures finalized by CMS
How Part D Works
Part D plans are sold by private insurers and each maintains its own formulary — the list of covered drugs, grouped into cost tiers. Generic drugs typically sit in the lowest tiers; brand-name and specialty drugs cost more. Plans also contract with specific pharmacy networks, so your total cost depends on both the formulary tier of your medications and where you fill them.
Finalized Part D standard-benefit amounts
CMS finalized a $700 defined-standard deductible and a $2,400 annual out-of-pocket threshold for 2027. The corresponding 2026 amounts are $615 and $2,100. Individual plans may offer a lower deductible or different cost sharing, so use the current plan documents when comparing coverage.
The out-of-pocket threshold applies to amounts that count under Medicare's Part D rules for covered drugs. After reaching the applicable threshold, you pay no cost sharing for covered Part D drugs for the rest of that calendar year. Monthly premiums and non-covered drugs are not included in the threshold.
Source: CMS Calendar Year 2027 Rate Announcement, Attachment V.
Part D Cost Breakdown
CMS's defined-standard Part D deductible is up to $615 in 2026 and $700 in 2027. The annual out-of-pocket threshold is $2,100 in 2026 and $2,400 in 2027. Premiums and plan-level cost sharing vary.
| Cost Type | 2026 | 2027 | Notes |
|---|---|---|---|
| Monthly premium | Varies by plan | Varies by plan | Set by each private insurer |
| Maximum standard deductible | Up to $615 | Up to $700 | Plans may set a lower deductible or none |
| Initial coverage phase | Cost sharing varies by formulary tier | Cost sharing varies by formulary tier | Check each plan's documents |
| Out-of-pocket threshold | $2,100 | $2,400 | After reaching it, no cost sharing for covered Part D drugs for the rest of that year |
Extra Help (Low-Income Subsidy)
Extra Help is a federal program that can reduce or eliminate Part D premiums, deductibles, and copays for people with limited income and resources. Eligibility is based on income and asset limits set each year — a licensed agent or your local Social Security office can help you check whether you qualify.
Want help checking your formulary before you enroll? Schedule a consultation with a Medicare agent and we'll review your medications together.
Related Reading
- Medicare Part D: Choosing the Right Drug Plan
- Medicare's Part D Out-of-Pocket Cap for 2026
- Does Medicare Cover GLP-1 Medications Like Ozempic and Wegovy?
See also our Medicare Plans overview, the Medicare Advantage Guide, the Medigap Guide, our Medicare FAQ, and our Medicare Glossary. For a more ground-up, self-paced walkthrough of Medicare basics, our free course at LearnMedicare.org is a good complement to this guide.
Frequently Asked Questions
What is Medicare Part D?
Part D is Medicare's prescription drug coverage, offered either as a standalone plan alongside Original Medicare or bundled into many Medicare Advantage plans.
What is a drug formulary?
A formulary is the list of prescription drugs a Part D plan covers, organized into cost tiers — generic drugs are usually the cheapest tier, with brand-name and specialty drugs costing more.
What is the Part D out-of-pocket threshold?
The defined-standard Part D out-of-pocket threshold is $2,100 for 2026 and $2,400 for 2027. After reaching the applicable threshold for covered Part D drugs, you pay no cost sharing for covered Part D drugs for the rest of that calendar year; premiums and non-covered drugs are separate.
What is the Part D deductible for 2027?
CMS finalized a maximum defined-standard Part D deductible of $700 for 2027, up from $615 in 2026. Plans may set a lower deductible or waive it; check the specific plan's current documents.
Do I need Part D if I'm not currently taking medications?
Generally yes — going without creditable prescription drug coverage for 63 or more days after your Initial Enrollment Period can trigger a permanent late-enrollment penalty added to your premium.
What is Extra Help?
Extra Help (the Part D Low-Income Subsidy, or LIS) is a program that helps eligible people with limited income and resources pay for Part D premiums, deductibles, and copays.
Does the Medicare 'donut hole' still exist?
The former coverage-gap phase was eliminated in the Part D redesign. For 2026, the out-of-pocket threshold is $2,100; for 2027, it is $2,400. After reaching the applicable threshold, you have no cost sharing for covered Part D drugs for the rest of that year.
How do I choose the right Part D plan?
Compare plans based on whether your specific medications are on the formulary, what tier they fall into, the plan's pharmacy network, and the total annual cost — not premium alone.
Reviewed by Kayla Price
Licensed Insurance Agent | NPN: 18530055
Licensed in NC, SC, GA, FL, VA, MD, MI, KS, TX, OH
Last reviewed: October 2026
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