Part D is a separate benefit you have to choose
Original Medicare covers almost no outpatient prescriptions. Drug coverage comes either from a standalone Part D plan alongside Original Medicare, or built into a Medicare Advantage plan. Either way it is a private plan with its own formulary, its own pharmacy network and its own prices.
Two plans can cover the same drug at very different prices, because what you pay depends on the tier the plan assigns it to and whether your pharmacy is preferred, standard or out of network.
The deductible and the cap
Part D has a maximum deductible set by CMS each year, and since 2025 it also has a hard annual cap on what you pay out of pocket for covered drugs. Before that cap existed, a serious prescription could cost an unlimited amount across a year.
| 2026 | 2027 | |
|---|---|---|
| Maximum deductible a plan may charge | $615 | $700 |
| Annual out-of-pocket cap on covered drugs | $2,100 | $2,400 |
| National base beneficiary premium | $38.99 | $41.33 |
Source: CMS CY2026 Part D Redesign Instructions and CY2027 Parts C and D Announcement
Covered does not mean cheap
A plan can cover your drug and still charge a great deal for it. The tier decides the price, and the same medication can sit on tier 2 in one plan and tier 4 in another. The formulary can also apply prior authorisation, step therapy or quantity limits.
The out-of-pocket cap applies to covered drugs. Money you spend on something the plan does not cover does not count toward it, which is why checking your own list against the formulary matters more than comparing premiums.
Choosing on total cost
The useful comparison is annual total cost for your drugs at your pharmacy, not the monthly premium. The official Plan Finder at Medicare.gov will do that arithmetic once you enter your prescriptions with dose and frequency.
If you go without creditable drug coverage after you are first eligible, a late enrollment penalty attaches to your premium permanently, so skipping Part D because you take nothing today has a cost.
Frequently asked questions
What is the Part D out-of-pocket cap in 2027?
The annual cap on what you pay out of pocket for covered Part D drugs is $2,400 in 2027, up from $2,100 in 2026. Once you reach it, you pay nothing more for covered drugs for the rest of the plan year.
Do I need Part D if I take no medication?
You are not required to take it, but going without creditable drug coverage after you are first eligible creates a late enrollment penalty that is added to your premium for as long as you have Part D. Many people take an inexpensive plan to keep the penalty from starting.
Why is my covered drug still expensive?
Because coverage and price are different things. The plan assigns each drug to a tier, and the tier sets your share. Prior authorisation, step therapy and whether your pharmacy is preferred all change the final figure.
Is the Part D deductible the same in every plan?
No. CMS sets a maximum, which is $700 for 2027, and plans may charge less or nothing at all. Plans also differ in which drugs they apply the deductible to.
Sources
This guide explains officially published rules and figures. It is not an insurance quote and not an eligibility determination. Only HealthCare.gov, Medicare.gov, Social Security or the carrier can determine your eligibility and your actual price.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Not connected with or endorsed by the U.S. government or the federal Medicare program.
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