Part D covers outpatient prescription drugs
Part D plans are offered by private Medicare-approved insurers. You can get drug coverage through a stand-alone Part D plan with Original Medicare or through many Medicare Advantage plans that include drug coverage.
2026 and 2027 Part D limits
Part D benefit limits change from year to year. As you compare coverage for 2027, these are two important numbers to know:
| Part D feature | 2026 | 2027 |
|---|---|---|
| Maximum standard plan deductible | $615 | $700 |
| Annual out-of-pocket threshold for covered Part D drugs | $2,100 | $2,400 |
A plan may charge a lower deductible — or no deductible — even though the federal standard maximum is higher. In 2027, once qualifying out-of-pocket spending for covered Part D drugs reaches $2,400, the beneficiary enters the catastrophic phase and pays $0 for covered Part D drugs for the rest of the calendar year.
Why the drug list matters
Each plan has a formulary — its list of covered drugs. Drugs can be placed on different tiers and may have utilization rules such as prior authorization, step therapy or quantity limits. Preferred pharmacies can also change your cost.
The Medicare Prescription Payment Plan
This option can spread your out-of-pocket Part D costs across the remaining months of the calendar year. It can help with cash flow for some people, but it does not lower the total drug cost.
Review Part D every year
Your prescriptions may stay the same while the plan's formulary, tier, pharmacy arrangement or premium changes. An annual review is especially valuable for prescription coverage.
Official references: Medicare — Part D costs and CMS — 2027 Medicare Advantage and Part D Rate Announcement.
Still have questions?
Medicare is personal. If you want help understanding how these rules fit your situation, Mike & Tracy can walk through it with you. There is no additional cost for our assistance.