Medicare's prescription drug benefit, Part D, has changed a great deal in the past few years. The biggest change is a yearly cap on what you pay for covered drugs. For 2027, that cap rises, and more drugs get Medicare-negotiated prices. Here is what to expect and what to check during open enrollment.
The yearly out-of-pocket cap
Since 2025, once your out-of-pocket spending on covered Part D drugs reaches a yearly limit, you pay nothing more for covered drugs for the rest of the calendar year.
| 2026 | 2027 | |
|---|---|---|
| Yearly out-of-pocket cap | $2,100 | $2,400 |
| Highest deductible a plan can charge | $615 | $700 |
The cap counts what you pay for covered drugs, including your deductible, copays and coinsurance. It also counts some payments made for you, such as Extra Help. It does not count your monthly premium or drugs your plan does not cover.
The cap rises each year with the growth in drug spending, which is why it goes up in 2027.
Spreading costs across the year
If you take expensive drugs, you could reach the cap in the first month or two of the year. The Medicare Prescription Payment Plan lets you spread those costs over monthly payments to your plan instead of paying at the pharmacy. It does not lower your total costs, but it can make them easier to manage.
You have to opt in through your plan, and you can join before the year starts or at any time during the year. It works best for people with high costs early in the year.
Negotiated drug prices
Under the Inflation Reduction Act, Medicare can negotiate prices with drugmakers for some high-cost drugs that have been on the market for years without competition.
- Negotiated prices for the first 10 drugs took effect in January 2026. They include common blood thinners and diabetes and heart failure medicines such as Eliquis, Xarelto, Jardiance, Farxiga and Entresto.
- In January 2027, negotiated prices take effect for 15 more drugs, including the diabetes and weight-management medicines Ozempic, Wegovy and Rybelsus, and the inhalers Trelegy Ellipta and Breo Ellipta.
What you actually pay still depends on your plan's design, such as whether the drug has a flat copay or a percentage coinsurance. Check each drug's cost in the Plan Finder.
What to check during open enrollment
- Your drug list. Make sure every drug you take is on next year's formulary. Drug lists change each year.
- Tiers and restrictions. A drug can move to a higher-cost tier or need prior approval or "step therapy."
- Pharmacies. Preferred pharmacies can charge much less than others in the same plan.
- Total yearly cost. Use the Plan Finder at Medicare.gov to compare total estimated costs, including premiums.
Open enrollment runs from October 15 through December 7. Read our open enrollment checklist.
Ways to lower your costs
- Extra Help pays most Part D costs for people with limited income and resources. See Extra Help with prescription costs.
- Generic drugs usually cost far less. Ask your doctor whether one would work for you.
- 90-day supplies and mail-order pharmacies can cost less for drugs you take every day.
- Manufacturer assistance programs and state pharmaceutical assistance programs may help with specific drugs.
Read more in our guide to cutting prescription costs.
