The cap applies to every Part D plan, whether your drug coverage comes through a stand-alone plan or is built into a Medicare Advantage plan. Only what you actually pay for covered drugs counts toward it: your deductible, copays and coinsurance. Premiums do not count, and neither does anything you spend on a drug the plan does not cover.
| Limit | 2026 | 2027 | Change |
|---|---|---|---|
| Out-of-pocket cap | $2,100 | $2,400 | +$300 |
| Maximum deductible | $615 | $700 | +$85 |
| Base beneficiary premium | $38.99 | $41.33 | +$2.34 |
How the cap works
The cap is a hard stop, not a discount. You pay the deductible your plan sets, then your share of each prescription, and the running total is tracked by your plan. The moment that total reaches $2,400 you move into what Medicare calls the catastrophic phase and your cost for covered drugs drops to zero. Plans are required to show you the running total on your explanation of benefits each month.
What it is worth
For most people the cap changes nothing, because most people never spend $2,400 a year on prescriptions. For anyone on a specialty drug it is the single most valuable feature in Part D. Before the cap existed, a person on one expensive medication could spend many thousands of dollars a year with no ceiling at all. If you take a drug that costs hundreds of dollars a month, you will likely reach the cap partway through the year and then pay nothing.
What to do next
Check your Annual Notice of Change for the deductible your plan has set for 2027, since plans may charge less than the $700 maximum but not more. Then price your actual prescription list against the plans available where you live. The cap is identical everywhere, so it is not a reason to choose one plan over another. What your specific drugs cost before you reach it is.
Read the full guide: How the Medicare drug cap works, with the 2026 figures
Related questions
Does the Part D cap include my monthly premium?
No. Only what you pay for covered drugs counts toward the $2,400: the deductible, copays and coinsurance. Premiums are separate and do not move you toward the cap.
Does the cap apply to Medicare Advantage plans?
Yes, if the plan includes drug coverage. The cap is a Part D rule, so it applies whether your drug coverage is a stand-alone plan or part of a Medicare Advantage plan.
What happens after I reach the cap?
You pay $0 for covered drugs for the rest of that calendar year. The total resets on January 1.
Sources
- Costs for Medicare drug coverage — Medicare.gov (CMS) · read 2026-10-13
- Announcement of Calendar Year (CY) 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies — Centers for Medicare & Medicaid Services · read 2026-10-13
- Medicare Part D 2027 National Average Monthly Bid Amount Information — Centers for Medicare & Medicaid Services · 2026-07-28 · read 2026-10-12
This page explains published rules and figures, with the source for each one. It is not advice about your own situation.