2027 Medicare Part D Changes for Agents

Drug costs, coverage checks and a practical annual review checklist

Updated October 7, 2026

Quick answer

For 2027, the maximum Medicare Part D deductible rises to $700, and the annual out-of-pocket threshold rises to $2,400 for covered Part D drugs. Eligible deductible spending counts toward that threshold. After the threshold is reached, covered Part D drugs have $0 cost sharing for the remainder of the calendar year. The separate coverage gap, often called the donut hole, remains eliminated. cms.gov

For agents, the next step is a fresh comparison using the client’s exact medications, pharmacy and 2027 plan information. The Annual Election Period for 2027 coverage runs October 15 through December 7, 2026, with coverage effective January 1, 2027. Medicare

An unchanged medication list does not settle whether the current plan will remain a good fit. The review should answer three questions: Will the client be able to obtain their prescriptions? What will the year cost? What will they need to pay when the first expensive prescriptions are filled?

Use this guide for stand-alone prescription drug plans, or PDPs, and the drug benefit within Medicare Advantage prescription drug plans, or MA-PDs. For local plan availability, plan exits and the broader medical-benefit review, use our 2027 Medicare Advantage changes by county guide.

2026 and 2027 Part D numbers at a glance

The deductible maximum increases by $85, and the annual threshold increases by $300. These are finalized 2027 amounts. Individual plans may have lower deductibles and different copayment or coinsurance structures. The 25% figure describes the defined standard benefit; it is not every client’s charge for every prescription. cms.gov

The 2027 final rule places the existing Part D redesign into regulation for 2027 and later years. It does not introduce the annual cap or eliminate the donut hole for the first time in 2027. CMS

1. Explain the deductible and annual limit together

The maximum deductible is not every client’s deductible

A plan may charge less than $700 or have no deductible. Some plans exclude certain drug tiers from the deductible. Check the actual 2027 benefit and the client’s drugs before estimating the first fill. Medicare

For example, a client taking only drugs on a tier that bypasses the deductible may have a different January experience from a client whose expensive prescription is subject to the full deductible. A single statement that everyone must first pay $700 would mislead both the comparison and the budget.

The deductible is included in the annual threshold

Do not add $700 to $2,400 and describe $3,100 as the Part D limit. Eligible spending toward the deductible is part of the spending counted toward the annual threshold. ecfr.gov

Example: If $700 of qualifying deductible spending has been credited, another $1,700 in qualifying costs reaches the $2,400 threshold. This arithmetic illustrates the relationship between the two limits; it does not predict a particular client’s bills.

Know what the limit covers

The limit applies to qualifying costs for covered Part D drugs. It does not cap plan premiums, Part D income-related premium adjustments, medical services, Part B drug costs or spending on drugs that remain outside Part D coverage. Coverage can include a drug approved through an exception or appeal. Medicare

The technical measure is true out-of-pocket costs, or TrOOP. Qualifying payments made on the client’s behalf can count, so a client may enter catastrophic coverage before personally paying $2,400. Basic Part D plan payments and Manufacturer Discount Program payments do not count; certain supplemental coverage and assistance payments can. ecfr.gov

Use the plan’s Explanation of Benefits to confirm progress toward the threshold. It identifies the benefit stage and the amounts being credited. Do not reconstruct TrOOP by adding retail drug prices or assuming every cash purchase outside the plan will count. Medicare

2. Compare the client’s premium and annual drug costs

The voluntary Part D Premium Stabilization Demonstration ends after 2026. Separately, the statutory limit on annual increases in the national base beneficiary premium continues through 2029. That 6% limit applies to the base premium used in the program’s calculations; it does not guarantee that an individual plan’s premium will rise by no more than 6%. CMS

CMS’s September 28, 2026 release projects the total average monthly premium for stand-alone PDPs at $36 in 2027, compared with $35.09 in 2026. Those national averages do not establish the premium for a particular client’s renewal. CMS

Use the client’s actual plan documents and calculate:

Annual plan premiums + estimated annual out-of-pocket drug costs = estimated annual premium-and-drug total.

Keep excluded expenses and any additional income-related premium charges visible in the client’s overall budget. If a comparison tool already includes premiums or deductible spending in its total, do not add them again.

A higher premium can still produce a lower annual total

The following is an illustrative comparison of two hypothetical PDPs for the same medications and pharmacy. It is not a quote or a description of available plans.

Plan B costs $200 less over the year in this example. Before recommending it, the agent still needs to resolve coverage restrictions, pharmacy access and the timing of expensive fills.

For an MA-PD comparison, complete the provider, hospital, medical-cost and other benefit review as well. A favorable drug estimate alone cannot establish the best overall Medicare Advantage choice.

3. Check whether the client takes a newly negotiated drug

Negotiated prices for 15 additional selected drug groups take effect January 1, 2027. These follow the first 10 drugs whose negotiated prices became available in 2026. cms.gov

Use the names below to identify clients whose comparisons deserve particular attention:

CMS treats some related brand names as one selected drug group, which is why the table contains more than 15 brand names. cms.gov

Part D plans must include applicable selected Part D drugs on their formularies while their negotiated prices are in effect, including the covered forms and strengths subject to those prices. However, this does not create one universal preferred tier or eliminate appropriate prior authorization and other coverage rules. cms.gov

The maximum fair price is not the client’s copayment. A headline discount against a list price cannot establish the client’s savings. Recheck the exact product, strength, quantity, pharmacy and plan-specific cost sharing. cms.gov

For a client already expected to reach the annual limit, the review should also examine access and early-year costs. A lower drug price does not automatically mean an equally large reduction in that client’s annual out-of-pocket spending.

4. Use a six-step Part D review

Step 1 — Confirm the current coverage arrangement

Identify whether the client has Original Medicare plus a PDP, an MA-PD, or employer or retiree coverage. Record the current plan name and contract/plan number.

Treat a move between an MA-PD and a stand-alone PDP as a coverage decision that requires checking the medical coverage consequences. In most Medicare Advantage HMOs and PPOs, enrolling in a separate PDP disenrolls the person from Medicare Advantage and returns them to Original Medicare. Medicare

Step 2 — Rebuild the medication list

Ask the client to confirm each medication’s exact name, strength, dosage form or device, quantity per fill and refill frequency. Confirm the pharmacy’s specific location and whether mail order is acceptable. Note a likely medication change separately rather than assuming a prescription will continue or stop.

A useful opening question is:

Step 3 — Establish the current plan’s 2027 renewal as the baseline

Review the Annual Notice of Change, Evidence of Coverage, formulary and pharmacy information. Compare the current plan’s 2027 renewal with the alternatives’ 2027 benefits. A comparison against last year’s terms does not answer the upcoming-year decision. Medicare explains that the ANOC identifies changes taking effect in January. medicare.gov

If the plan is ending or the client has received a notice requiring action, resolve that notice before assuming a normal renewal. Put clients with an unresolved coverage or medication-access problem near the front of the review schedule.

Step 4 — Verify coverage and the pharmacy

For every prescription, record formulary status, tier, prior authorization, step therapy and quantity limits. Check whether the exact pharmacy is in network and whether it offers preferred or standard cost sharing. A drug being listed on the formulary does not by itself resolve every access requirement. Medicare

If the client would need an exception, identify the plan’s process and the prescriber’s supporting work. Keep the request marked pending until there is a decision. An agent’s expectation that a request will be approved should not become a coverage promise.

Step 5 — Compare the full year and the first expensive fills

Run the same confirmed drug list through each plan using the same pharmacy and refill assumptions. Record the annual premium-and-drug estimate and the expected cost of the first expensive fill. Where practical, show the January-to-March pattern.

Ask:

For an affordable comparison, both the annual total and the timing of the client’s bills need to work.

Step 6 — Save the decision and plan the January handoff

Record the client’s priorities, the plans compared, the estimate date, outstanding questions and the reason for keeping or changing coverage. A recommendation to keep the current plan should have the same clear explanation as a recommendation to switch.

Before the first refill, confirm that the client has the new coverage information and that any required prescriber follow-up is assigned. A transition fill may provide a temporary supply in certain situations, but it does not settle ongoing coverage. Confirm the plan’s transition rules and pursue any needed exception or alternative with the prescriber. Medicare

5. Check prescription payment participation when a client changes plans

The Medicare Prescription Payment Plan allows participating clients to pay covered Part D out-of-pocket drug costs through monthly bills from their plan. It can help with the timing of expenses, but it does not reduce the underlying drug cost. Bills can change as prescriptions are filled and the number of months left in the year decreases. medicare.gov

The client’s unpaid balance remains owed if participation ends. Changing plans or leaving the payment option does not erase prior charges. medicare.gov

Add one explicit follow-up to a plan change: “Confirm payment-option election with the new plan before the first expensive fill.” Do not assume that choosing another plan from the same insurance company preserves participation.

6. Address special drug-cost situations

Insulin and adult vaccines

For a one-month supply of each covered Part D insulin product, the cost-sharing ceiling is the lowest of $35, 25% of its maximum fair price when applicable, or 25% of the plan’s negotiated price. The Part D deductible does not apply. This rule continues in 2027. CMS

Verify the exact product and how it is covered. The insulin protection does not establish a $35 combined limit for every diabetes drug and supply. For product, supply and Part B distinctions, use our Medicare insulin cap guide.

ACIP-recommended adult vaccines covered under Part D have no deductible or cost sharing. Confirm the applicable benefit and billing arrangements when helping the client obtain the vaccine. CMS

GLP-1 drugs and the separate Medicare GLP-1 Bridge

The Medicare GLP-1 Bridge extends through December 31, 2027 for eligible patients and prescriptions. It operates outside the Part D benefit. Its $50 monthly copay does not count toward the Part D threshold, and reaching catastrophic coverage does not eliminate that copay. Part D low-income cost-sharing subsidies do not reduce it. CMS

A GLP-1 prescribed for a Part D-coverable indication follows the Part D coverage and exception process. The Bridge is not a route around a plan’s formulary for that use. Confirm current eligibility with the prescriber and the official program materials. CMS

Use our Medicare GLP-1 Bridge guide for the detailed eligibility and access workflow.

Extra Help

Check whether the client receives or may qualify for Extra Help before applying the standard cost assumptions. Medicare lists 2027 maximum copays of $5.80 for a generic drug and $14.40 for a brand-name drug, with a $0 deductible. Some clients pay less. Confirm the subsidy level and how it applies to the selected plan. Medicare

Use the eligibility limits labeled for the applicable year. A webpage displaying 2027 copays may still show income and resource limits labeled 2026. Medicare

Employer and retiree drug coverage

For a Medicare-eligible client considering delaying Part D, obtain the employer’s current creditable-coverage notice. Under the revised simplified method, non-RDS group plans must be designed to pay at least 73% of participants’ prescription drug expenses on average for 2027, along with other coverage and pharmacy-access requirements. Actuarial testing remains an alternative. This is a plan-level test, not a percentage agents should apply to one client’s prescriptions. ecfr.gov

“Non-RDS” means the group plan is not receiving the Medicare Retiree Drug Subsidy. Ask the benefits administrator to resolve an unclear notice and explain the effect of a separate Part D enrollment before advising a change. Medicare warns that a gap of 63 consecutive days or more without Part D or other creditable drug coverage after the initial enrollment period can trigger a late enrollment penalty. medicare.gov

Printable 2027 Part D review checklist

Client: ____________________ Review date: ____________________

Current plan and ID: ___________________________________________

County and ZIP: ____________________ Pharmacy: _______________

Verify the inputs

• The client confirmed the medication names, strengths, forms, quantities and refill frequency.
• The pharmacy location and mail-order preference are correct.
• The comparison uses 2027 benefits, including the current plan’s 2027 renewal.
• Extra Help and other coverage were checked where applicable.

Compare the plans

• Each drug’s formulary status, tier and coverage restrictions were reviewed.
• Pharmacy network and preferred status were verified for each plan.
• Annual premiums and estimated annual drug costs were compared without double counting.
• The first expensive fill and early-year costs were explained.
• Expenses outside Part D were identified separately in the client’s budget.
• For MA-PD choices, the medical and provider review was completed.

Complete the follow-up

• Pending coverage questions have an owner and due date.
• Payment-option renewal or a new election was addressed.
• The keep/change decision and its reason were recorded.
• The client knows the next step and who to contact before the January refill.

Decision: Keep / Change / Pending

Reason and next action: ___________________________________________

Follow-up owner and due date: ____________________________________

Keep the drug list, comparison output and relevant plan confirmations with this checklist. Record the date of the estimates so the assumptions can be revisited if a medication or plan detail changes.

Frequently asked questions

Does everyone pay a $700 deductible in 2027?

No. That is the maximum. The selected plan may have a lower deductible, no deductible or drug tiers that bypass it. Check the actual plan benefits. Medicare

Is the $2,400 limit in addition to the deductible?

No. Eligible deductible spending counts toward the annual threshold. Premiums and expenses outside covered Part D drug costs are separate. Medicare

Does the annual cap mean drug costs are $200 every month?

No. Dividing $2,400 by 12 does not establish the client’s monthly bill. Costs depend on prescriptions, benefit stage and timing. The payment option may spread costs across the year, but it is not a universal $200 monthly charge. medicare.gov

Do negotiated prices remove the need to compare plans?

No. The plan’s cost sharing, pharmacy arrangements and applicable access requirements still matter. Use the client’s specific 2027 estimate. cms.gov

Does the Part D limit also cover Medicare Advantage medical costs?

No. The Part D threshold applies to qualifying drug costs. Evaluate Medicare Advantage medical cost sharing and its maximum out-of-pocket limit separately. ecfr.gov

Does the client have to change plans for 2027?

No. A review may support keeping the current plan. The useful result is a documented decision based on the client’s prescriptions, pharmacy, costs and coverage needs. Beneficiaries keeping their current coverage generally do not need to re-enroll. CMS

Authoritative sources

Review date: October 7, 2026.

1. CMS 2027 Rate Announcement, Tables V-2 and V-6, printed pages 95 and 99.
   https://www.cms.gov/files/document/2027-announcement.pdf
2. 42 C.F.R. § 423.104, standard and alternative Part D coverage.
   https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-423/subpart-C/section-423.104
3. Medicare.gov — How much does Medicare drug coverage cost?, including benefit stages and the Explanation of Benefits.
   https://www.medicare.gov/health-drug-plans/part-d/basics/costs
4. 42 C.F.R. § 423.100, definitions of covered Part D drugs and incurred costs.
   https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-423/subpart-C/section-423.100
5. CMS September 28, 2026 announcement, 2027 plan and premium projections.
   https://www.cms.gov/newsroom/press-releases/medicare-advantage-medicare-prescription-drug-programs-expected-remain-stable-2027
6. CMS July 28, 2026 Part D bid information, base premium and the end of the voluntary premium demonstration.
   https://www.cms.gov/newsroom/fact-sheets/medicare-part-d-2027-national-average-monthly-bid-amount-information
7. CMS negotiated prices for 2027, selected-drug list and effective date.
   https://www.cms.gov/files/document/fact-sheet-negotiated-prices-ipay-2027.pdf
8. CMS 2027 drug negotiation final guidance, section 110, printed pages 298–300.
   https://www.cms.gov/files/document/medicare-drug-price-negotiation-final-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf
9. Medicare.gov — Drug plan rules, restrictions, exceptions and transition fills.
   https://www.medicare.gov/health-drug-plans/part-d/what-drug-plans-cover/plan-rules
10. Medicare & You 2027, Part D section, printed pages 83–94.
    https://www.medicare.gov/publications/10050-medicare-and-you.pdf
11. Medicare Prescription Payment Plan brochure, participation, renewals and billing.
    https://www.medicare.gov/publications/12211-whats-the-medicare-prescription-payment-plan.pdf
12. Medicare.gov — Using this payment option, leaving or changing plans.
    https://www.medicare.gov/prescription-payment-plan/using-payment-option
13. CMS 2026 final rule fact sheet, continuing insulin and vaccine cost-sharing protections.
    https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription-final
14. CMS Medicare GLP-1 Bridge plan FAQs, 2027 duration and treatment of costs outside Part D.
    https://www.cms.gov/medicare/coverage/prescription-drug-coverage/medicare-glp-1-bridge/information-part-d-plans
15. Medicare.gov — Help with drug costs, Extra Help.
    https://www.medicare.gov/basics/costs/help/drug-costs
16. 42 C.F.R. § 423.56, creditable drug coverage and required notices.
    https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-423/subpart-B/section-423.56
17. Medicare.gov — Open Enrollment, election dates and January effective dates.
    https://www.medicare.gov/health-drug-plans/open-enrollment
18. Medicare.gov — Choose how you get drug coverage, PDP and Medicare Advantage coverage arrangements.
    https://www.medicare.gov/health-drug-plans/part-d/basics/choose-coverage
19. Medicare.gov — How do drug plans work?, formularies, tiers and exceptions.
    https://www.medicare.gov/health-drug-plans/part-d/what-drug-plans-cover/how-drug-plans-work
20. CMS 2027 Medicare Advantage and Part D final rule fact sheet, codification of the Part D redesign.
    https://www.cms.gov/newsroom/fact-sheets/contract-year-2027-medicare-advantage-part-d-final-rule