Medicare drug plans will cap what a member pays out of pocket at $2,400 in 2027, up from $2,100 in 2026, according to Medicare.gov. The cap is $300 higher than this year’s. Once a member reaches it, covered drugs cost nothing for the rest of the calendar year.
The Medicare Prescription Payment Plan, which spreads those costs across the year, carries no fee. Open enrollment for 2027 coverage runs from October 15 through December 7, 2026.
The $2,400 figure belongs to plan year 2027, which begins in January. The $2,100 figure is this year’s cap, and it is still the number printed on the main Medicare costs page. Anyone comparing plans this fall needs to use the higher number when working out a worst-case year.
That raises a plain question for people on Part D, the Medicare drug benefit, and for people in Medicare Advantage plans that include drug coverage. How much could prescriptions cost in the first months of January, and is the monthly payment option worth turning on before the pharmacy counter becomes a problem?
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What the cap covers and what it does not
Medicare.gov calls the cap the catastrophic coverage threshold. In 2026 it is $2,100. For 2027 the same page lists $2,400. The agency says the total includes certain payments made on a member’s behalf, such as help through the Extra Help program.
The cap is not a bill. It is the ceiling on what a member can be asked to pay in one year for covered prescriptions, including the deductible.
Medicare.gov says premiums vary by plan and that deductibles, copayments and coinsurance vary by plan and pharmacy. A cap only helps if the drugs a person takes are on the plan’s list.
Deductibles also go up in 2027
Medicare sets a ceiling on the Part D deductible, which is the amount a member can owe before the plan starts sharing costs. In 2026 no plan may charge more than $615. For 2027 the page says no plan may have a deductible above $700. Some plans have no deductible at all.
That $700 is a ceiling, not a standard charge. A plan may set it lower. People shopping this fall should ask what each plan charges in January, because a high deductible lands when the year starts and the bill arrives all at once.
The federal figures are set each spring. In its 2027 rate announcement, released April 6, 2026, CMS said it would update the Part D deductible and the out-of-pocket threshold for the new year.
How the no-fee payment plan works
The Medicare Prescription Payment Plan changes when a member pays, not how much. Instead of paying at the pharmacy counter, the member is billed monthly by the plan. The costs are spread across the calendar year, January through December. Medicare.gov says: “There’s no cost to participate.”
Anyone with a Medicare drug plan, or a Medicare health plan that includes drug coverage, can use it. Medicare.gov says all plans offer the option, and CMS says all Medicare prescription drug plans are required to offer it. Joining is voluntary. People sign up by contacting their plan.
Medicare.gov is direct about the limits. The option “doesn’t save you money or lower your drug costs,” and it still applies to the same prescriptions. A member who joins owes the same total. The payments are just smaller and more regular. The page suggests the option is mainly for people who need help managing monthly expenses, and points to a short questionnaire to see whether it fits.
Who gets help paying the $2,400
People with limited income may pay far less. Medicare.gov says that under Extra Help in 2027, copays drop to $0 once total drug costs reach $2,400, counting certain payments made on a member’s behalf. Extra Help is the federal program that lowers drug plan costs for people with limited income and savings. The Social Security Administration takes applications at ssa.gov.
The income and savings limits on that page still reflect 2026, so applicants should check the current numbers before ruling themselves out.
Premiums matter too. CMS projects the average monthly premium for a stand-alone drug plan will rise by less than $1, from $35.09 in 2026 to $36 in 2027. CMS says 88 percent of beneficiaries who are not low-income can find a basic plan at $10.30 a month or less. The agency calls these projections, and the premium a person actually pays depends on the plan chosen.
Comparing plans before the window closes
CMS Administrator Dr. Mehmet Oz has said the agency is working to keep care options affordable and accessible, in the September 28 release announcing the 2027 outlook for Medicare Advantage and Part D. Affordable on paper still depends on the drug list.
The free official tool is the Medicare Plan Finder. Members enter their drugs and pharmacy, and it shows what each plan would charge for 2027. Free counseling is available through the State Health Insurance Assistance Program at shiphelp.org, and 1-800-MEDICARE answers around the clock.
Members who like their current plan still need to look. Plans change their drug lists, deductibles and pharmacy networks every year. A plan that was cheap in 2026 can cost more for the same prescriptions in 2027.
Turning on the payment plan
For anyone who expects a large pharmacy bill early in the year, the sequence is simple. Pick the plan by total yearly cost for the exact drugs taken. Then call that plan and ask to join the payment option before the first big prescription is filled. The cap does not change the order of these steps. It only sets the ceiling.
One open point remains. Medicare.gov does not say whether members enrolled in 2026 carry the option into 2027 without signing up again. The safest course is to ask the plan directly this fall. People who change plans should expect to deal with the new plan.
The deadline is December 7. Anyone still deciding has until then to compare drugs, deductibles and the new $2,400 ceiling.
Facing a January prescription bill under the $2,400 cap?
A plan picked on premium alone can bring a January pharmacy bill with a deductible as high as $700 landing before the cap helps at all. People who skip the comparison before December 7 can end up paying that bill for a full year.
Cut Your Medicare Bill is a guide that lays out ten moves to pay less for the same care. It includes the fall plan check, the guide’s walk through the $2,100 drug cap for 2026, and what counts toward it, plus 2026 Medicare costs at a glance on one table to use as a baseline against the 2027 numbers.
Get the Medicare bill guide with the drug cap walkthrough and the fall plan check →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
