Part D 2027: a $2,400 drug cap, and a premium held at its 6% limit
The 2027 Part D cap is $2,400, up from $2,100. The base premium is $41.33, a 6% rise when the formula gave $94.06. Enrollment closes December 7, 2026.
◆ The Signal
30-second read
- What happened
- For calendar 2027 the Part D out-of-pocket cap on covered drugs is $2,400, up from $2,100 in 2026, and the maximum plan deductible is $700, up from $615 (medicare.gov). CMS set the 2027 base beneficiary premium at $41.33 on July 28, 2026, exactly 6% above the 2026 figure of $38.99. Open enrollment runs from October 15 to December 7, 2026.
- Why
- The base premium is the lesser of two statutory calculations: 25.5% of the national average bid, or the prior-year base premium plus 6%. For 2027 the bid-based figure was $94.06, so the 6% limit bound. The cap and deductible are the 2026 amounts multiplied by an annual percentage increase in Part D costs and rounded.
- The numbers that matter
- $2,400Part D out-of-pocket cap on covered drugs, calendar 2027 ($2,100 in 2026)$41.33Base beneficiary premium, 2027, set July 28, 2026; $38.99 in 2026$94.06What the bid formula gave before the 6% limit, CMS Office of the Actuary, July 28, 2026$36Projected average stand-alone drug plan premium, 2027 ($35.09 in 2026), CMS, September 28, 2026
- Why it matters
- A person with $4,000 of drug list costs in 2027 pays at most $2,400 plus premiums; under the standard benefit design the figure is $1,525. Each month without creditable coverage adds a permanent 1% of $41.33 to the premium.
- What happens next
- Open enrollment closes on December 7, 2026 and 2027 coverage starts January 1, 2027. CMS published the 2026 Part B and Part D income-related surcharges on November 14, 2025; as of October 27, 2026 the 2027 surcharge table was not on CMS's site.
Medicare Part D
The national average bid rose 23.7%, but the base premium enrollees pay rose 6% because the statute caps it there.
| National average bid, 2027 | 296.05 |
|---|---|
| National average bid, 2026 | 239.27 |
| Uncapped base premium, 2027 (calc B) | 94.06 |
| Base beneficiary premium, 2027 | 41.33 |
| Base beneficiary premium, 2026 | 38.99 |
US dollars per month; CMS Office of the Actuary memos of July 28, 2025 and July 28, 2026Source: CMS, Medicare Part D 2027 National Average Monthly Bid Amount Information, July 28, 2026; CMS 2026 bid information fact sheet, July 28, 2025
Go deeper
The number that governs Medicare drug costs in 2027 is not the premium. It is $2,400: the most a person can pay out of pocket for covered Part D drugs in the calendar year, up from $2,100 in 2026. Medicare.gov lists both figures on its Part D costs page. Above the cap, the plan pays everything.
The premium side was decided on July 28, 2026, when the Centers for Medicare & Medicaid Services set the 2027 base beneficiary premium at $41.33 a month. The bid formula alone produced $94.06. The Inflation Reduction Act limits the base premium to a 6% rise a year through 2029, and 6% is what enrollees got: $38.99 × 1.06 = $41.33. The window to pick a plan opened on October 15, 2026 and closes on December 7, 2026.
The 2027 parameters: cap up 14.3%, deductible up 13.8%
Data
The out-of-pocket cap is $2,400 and no plan may charge a deductible above $700
Medicare.gov's Part D costs page says the initial coverage stage runs “until your out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026 ($2,400 in 2027)”, after which “You won't have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.” It adds: “No Medicare drug plan may have a deductible more than $700 in 2027 ($615 in 2026), and some plans have no deductible.” CMS's September 2026 payment plan fact sheet repeats the $2,400 figure.
Medicare.gov's Part D costs page says the initial coverage stage runs “until your out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026 ($2,400 in 2027)”, after which “You won't have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.” It adds: “No Medicare drug plan may have a deductible more than $700 in 2027 ($615 in 2026), and some plans have no deductible.” CMS's September 2026 payment plan fact sheet repeats the $2,400 figure.
Wealth Signal calculation
The cap rose $300, or 14.3%; the deductible rose $85, or 13.8%
$2,400 − $2,100 = $300; $300 ÷ $2,100 = 14.3%. $700 − $615 = $85; $85 ÷ $615 = 13.8%. CMS's rate announcement of April 6, 2026 says both are set “by multiplying the CY 2026 amounts by the CY 2027 Annual Percentage Increase and rounding as specified by the statute”: the same index, different rounding.
$2,400 − $2,100 = $300; $300 ÷ $2,100 = 14.3%. $700 − $615 = $85; $85 ÷ $615 = 13.8%. CMS's rate announcement of April 6, 2026 says both are set “by multiplying the CY 2026 amounts by the CY 2027 Annual Percentage Increase and rounding as specified by the statute”: the same index, different rounding.
$2,400
Out-of-pocket cap, covered Part D drugs
Calendar 2027; $2,100 in 2026 (medicare.gov)
$700
Maximum plan deductible
Calendar 2027; $615 in 2026 (medicare.gov)
$41.33
Base beneficiary premium
2027, set July 28, 2026; $38.99 in 2026
Two other rules carry into 2027. Medicare.gov's insulin page says enrollees pay “No more than $35 for a one-month supply of each Part B- and Part D-covered insulin product (other costs may apply)” and that “you don't have to pay a deductible for insulin”. Its vaccine page says Part D covers all adult vaccines recommended by the Advisory Committee on Immunization Practices that Part B does not, and that “Your Part D plan won't charge you a copayment or apply a deductible for vaccines ACIP recommends.”
How the premium is set: 25.5% of the bid, or 6%, whichever is less
Each June, Part D plans tell CMS what they expect basic coverage to cost per enrollee per month. CMS averages the bids, weighted by enrollment, into the national average monthly bid amount, and derives the base beneficiary premium from it by statute.
Data
The national average bid for 2027 is $296.05, up from $239.27 in 2026
The CMS fact sheet of July 28, 2026 states: “In 2027, the NAMBA will be $296.05” and “For 2027, the base beneficiary premium will be $41.33.” The equivalent fact sheet of July 28, 2025 gave the 2026 figures as $239.27 and $38.99. The base premium is “capped by the IRA's premium stabilization provision not to exceed 6% per year” for 2024 through 2029.
The CMS fact sheet of July 28, 2026 states: “In 2027, the NAMBA will be $296.05” and “For 2027, the base beneficiary premium will be $41.33.” The equivalent fact sheet of July 28, 2025 gave the 2026 figures as $239.27 and $38.99. The base premium is “capped by the IRA's premium stabilization provision not to exceed 6% per year” for 2024 through 2029.
Fact
The statute takes the lesser of two calculations, and the 6% one won by a wide margin
The Office of the Actuary memo of July 28, 2026 gives calculation A as “2026 BBP x 1.06 or $38.99 x 1.06 = $41.33.” Calculation B applies the beneficiary premium percentage, “a fraction, with a numerator of 25.5 percent”, to the national average bid: “The result of calculation B is $94.06.” The lesser applies: “Therefore, the Part D BBP for CY 2027 is $41.33.”
The Office of the Actuary memo of July 28, 2026 gives calculation A as “2026 BBP x 1.06 or $38.99 x 1.06 = $41.33.” Calculation B applies the beneficiary premium percentage, “a fraction, with a numerator of 25.5 percent”, to the national average bid: “The result of calculation B is $94.06.” The lesser applies: “Therefore, the Part D BBP for CY 2027 is $41.33.”
Wealth Signal calculation
The bid rose 23.7% while the base premium rose 6.0%
$296.05 − $239.27 = $56.78; $56.78 ÷ $239.27 = 23.7%. $41.33 − $38.99 = $2.34; $2.34 ÷ $38.99 = 6.0%. The uncapped $94.06 is 2.28 times the capped $41.33. The gap between the two is covered by federal payments to plans, so the premium a reader sees is a smaller share of plan cost than the 25.5% in the statute.
$296.05 − $239.27 = $56.78; $56.78 ÷ $239.27 = 23.7%. $41.33 − $38.99 = $2.34; $2.34 ÷ $38.99 = 6.0%. The uncapped $94.06 is 2.28 times the capped $41.33. The gap between the two is covered by federal payments to plans, so the premium a reader sees is a smaller share of plan cost than the 25.5% in the statute.
The base premium is not what anyone actually pays; each plan's premium is the base plus or minus the gap between its own bid and the national average, plus any charge for extra benefits. CMS's press release of September 28, 2026 projects the average stand-alone plan premium to rise “from $35.09 in 2026 to $36 in 2027”, with 88% of beneficiaries without low-income help able to access a basic plan at $10.30 or less. That is an average, not a forecast of any one person's bill.
The demonstration that held premiums down is ending
Fact
CMS is discontinuing the Part D Premium Stabilization Demonstration at the end of 2026
In 2025 CMS ran a voluntary demonstration for stand-alone plans with “a uniform reduction of $15 to the base beneficiary premium, a year-over-year increase limit of $35” on a plan's total premium. For 2026 it cut the reduction “from $15 to $10” and raised the limit “from $35 to $50”. The July 28, 2026 fact sheet states: “CMS will discontinue the demonstration at the end of CY 2026”, saying plan sponsors “had sufficient experience under the redesigned Part D benefit to support their assumptions.”
In 2025 CMS ran a voluntary demonstration for stand-alone plans with “a uniform reduction of $15 to the base beneficiary premium, a year-over-year increase limit of $35” on a plan's total premium. For 2026 it cut the reduction “from $15 to $10” and raised the limit “from $35 to $50”. The July 28, 2026 fact sheet states: “CMS will discontinue the demonstration at the end of CY 2026”, saying plan sponsors “had sufficient experience under the redesigned Part D benefit to support their assumptions.”
Interpretation
Without the demonstration, a plan's premium can move further than the base premium suggests
The 6% limit applies to the base premium, a national reference number; the demonstration's $50 limit applied to each plan's total premium. With it gone, a plan whose bid sits well above the national average has no administrative ceiling on its premium change.
The 6% limit applies to the base premium, a national reference number; the demonstration's $50 limit applied to each plan's total premium. With it gone, a plan whose bid sits well above the national average has no administrative ceiling on its premium change.
What it means for your money
The arithmetic below assumes a stand-alone plan, no low-income subsidy, and drugs the plan covers.
Wealth Signal calculation
A person with $4,000 of drug list costs in 2027 pays at most $2,832 including a $36 premium, and $1,957 under the standard design
Worst case: out-of-pocket capped at $2,400, plus a premium at CMS's projected average of $36 × 12 = $432. Total $2,832. Standard design: medicare.gov describes a deductible, then “25% of the cost as coinsurance for your generic and brand-name drugs” until spending reaches the cap. With the maximum $700 deductible: $700 + 25% × ($4,000 − $700) = $700 + $825 = $1,525, below the cap, so the cap does not bind. Add $432 of premiums: $1,957.
Worst case: out-of-pocket capped at $2,400, plus a premium at CMS's projected average of $36 × 12 = $432. Total $2,832. Standard design: medicare.gov describes a deductible, then “25% of the cost as coinsurance for your generic and brand-name drugs” until spending reaches the cap. With the maximum $700 deductible: $700 + 25% × ($4,000 − $700) = $700 + $825 = $1,525, below the cap, so the cap does not bind. Add $432 of premiums: $1,957.
Wealth Signal calculation
Spread through the Medicare Prescription Payment Plan, the first bill is $200 and the average is $127.08
CMS's September 2026 fact sheet says the first bill is the lesser of actual costs or the $2,400 cap, less anything already paid, divided by the months remaining: $2,400 ÷ 12 = $200 for a January joiner. Later bills are the remaining balance plus new costs, divided by the months left. Applied to $1,525 of standard-design costs spread evenly over the year, that gives $200.00 in January, $42.42 in February, then a rising series to $289.00 in December; the average is $1,525 ÷ 12 = $127.08. CMS's own example has the same shape: $80 a month of costs produces bills from $7.27 in February to $241.59 in December. The option “doesn't save you money or lower your drug costs” and charges no interest or fees.
CMS's September 2026 fact sheet says the first bill is the lesser of actual costs or the $2,400 cap, less anything already paid, divided by the months remaining: $2,400 ÷ 12 = $200 for a January joiner. Later bills are the remaining balance plus new costs, divided by the months left. Applied to $1,525 of standard-design costs spread evenly over the year, that gives $200.00 in January, $42.42 in February, then a rising series to $289.00 in December; the average is $1,525 ÷ 12 = $127.08. CMS's own example has the same shape: $80 a month of costs produces bills from $7.27 in February to $241.59 in December. The option “doesn't save you money or lower your drug costs” and charges no interest or fees.
Wealth Signal calculation
The late enrollment penalty: 1% of $41.33 per month uncovered, for life
Medicare.gov's July 2026 fact sheet gives the formula as “1% × national base beneficiary premium × number of full months without Part D or creditable coverage”, rounded to the nearest $0.10, after a gap of “63 or more days in a row”. Using the 2027 base of $41.33: 12 months uncovered gives 0.12 × $41.33 = $4.96, rounded to $5.00 a month, or $60.00 a year; 24 months gives 0.24 × $41.33 = $9.92, rounded to $9.90, or $118.80 a year. Medicare.gov's 2026 example: 17 months uncovered, 0.17 × $38.99 = $6.63, paid as $6.60 a month. The penalty is “permanently added” and is recomputed on each year's base premium.
Medicare.gov's July 2026 fact sheet gives the formula as “1% × national base beneficiary premium × number of full months without Part D or creditable coverage”, rounded to the nearest $0.10, after a gap of “63 or more days in a row”. Using the 2027 base of $41.33: 12 months uncovered gives 0.12 × $41.33 = $4.96, rounded to $5.00 a month, or $60.00 a year; 24 months gives 0.24 × $41.33 = $9.92, rounded to $9.90, or $118.80 a year. Medicare.gov's 2026 example: 17 months uncovered, 0.17 × $38.99 = $6.63, paid as $6.60 a month. The penalty is “permanently added” and is recomputed on each year's base premium.
| Item | 2026 | 2027 | Change | Source |
|---|---|---|---|---|
| Out-of-pocket cap, covered drugs | $2,100 | $2,400 | +$300 (+14.3%) | medicare.gov costs page |
| Maximum plan deductible | $615 | $700 | +$85 (+13.8%) | medicare.gov costs page |
| National average monthly bid | $239.27 | $296.05 | +$56.78 (+23.7%) | CMS, Jul 28, 2025 and Jul 28, 2026 |
| Base beneficiary premium | $38.99 | $41.33 | +$2.34 (+6.0%) | CMS, Jul 28, 2025 and Jul 28, 2026 |
| Average stand-alone plan premium (projected) | $35.09 | $36 | +$0.91 | CMS press release, Sep 28, 2026 |
| Insulin, per month's supply | $35 maximum | $35 maximum | none | medicare.gov insulin page |
| Premium stabilization demonstration | $10 cut, $50 increase limit | ended | discontinued | CMS, Jul 28, 2025 and Jul 28, 2026 |
Source: CMS fact sheets of July 28, 2025 and July 28, 2026; CMS press release of September 28, 2026; medicare.gov pages retrieved October 27, 2026. Percentage changes are the site's calculations.
Premiums do not count toward the $2,400 cap, and a drug outside the plan's formulary is paid in full and sits outside the cap entirely. An emergency fund of one year's cap plus premiums, about $2,832 at the figures above, covers the worst case a covered-drug user faces in 2027.
How to compare, and what is not yet published
- Use the plan finder, not the premium. Medicare.gov's drug coverage page says “Compare Medicare drug plans in your area to find coverage that fits your needs” and links to its plan finder at medicare.gov/plan-compare, which prices a list of drugs and pharmacies against each plan. A $0 premium plan with a $700 deductible and a $36 plan with none can rank either way.
- Check the formulary for every drug. Only covered drugs count toward the $2,400 cap. The payment plan can be joined at any point in the year by contacting the plan; it spreads cost and does not reduce it.
- Note the deadline. Medicare.gov's enrollment page says coverage chosen in the October 15 to December 7 window starts on January 1, and that “the plan must get your request to join by December 7”. Someone already in a Medicare Advantage plan has a second window from January 1 to March 31, 2027.
Data
The 2027 income-related Part D surcharge table was not on CMS's site as of October 27, 2026
Higher-income enrollees pay a monthly surcharge on top of the plan premium. CMS published the 2026 table on November 14, 2025: $14.50 a month for an individual with modified adjusted gross income above $109,000 ($218,000 joint), rising through $37.50, $60.40 and $83.30 to $91.00 at $500,000 or more ($750,000 joint). The 2027 table normally arrives with the November Part B release; a search of CMS's newsroom on October 27, 2026 found none. The Part B piece covers the bracket mechanics; the COLA piece covers the 2027 benefit rise.
Higher-income enrollees pay a monthly surcharge on top of the plan premium. CMS published the 2026 table on November 14, 2025: $14.50 a month for an individual with modified adjusted gross income above $109,000 ($218,000 joint), rising through $37.50, $60.40 and $83.30 to $91.00 at $500,000 or more ($750,000 joint). The 2027 table normally arrives with the November Part B release; a search of CMS's newsroom on October 27, 2026 found none. The Part B piece covers the bracket mechanics; the COLA piece covers the 2027 benefit rise.
This article does not claim what any individual's 2027 Part D premium or drug cost is: premiums, deductibles and copayments vary by plan and region, and the $36 average is a CMS projection. It does not claim the 2027 income-related surcharge amounts, which CMS had not published as of October 27, 2026; the surcharge figures quoted are for 2026. The $1,525 and $1,957 figures assume a $700 deductible, 25% coinsurance and all drugs covered; the payment plan schedule is the site's application of CMS's formula, not a plan's bill. Nothing here is advice on which plan to choose.
Sources
- Medicare Part D 2027 National Average Monthly Bid Amount Information (fact sheet, July 28, 2026)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
- Annual Release of Part D National Average Monthly Bid Amount and Other Part C & D Bid Information (Office of the Actuary memo, July 28, 2026)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
- 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters (fact sheet, July 28, 2025)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
- Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2027 (press release, September 28, 2026)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
- Announcement of Calendar Year (CY) 2027 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (April 6, 2026)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
- How much does Medicare drug coverage cost?Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- What's the Medicare Prescription Payment Plan? (CMS Product No. 12211, September 2026)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- The Part D Late Enrollment Penalty (CMS Product No. 11222, July 2026)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- Insulin (coverage page)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- Shingles vaccines (coverage page; Part D vaccine cost-sharing rule)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- Joining a plan (enrollment periods)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- Choose drug coverage (Part D basics)Centers for Medicare & Medicaid Services (medicare.gov) · Oct 27, 2026 · Primary source
- 2026 Medicare Parts A & B Premiums and Deductibles (fact sheet, November 14, 2025; includes 2026 Part D income-related monthly adjustment amounts)Centers for Medicare & Medicaid Services · Oct 27, 2026 · Primary source
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