Check Your Part D Drugs: 2027 Formulary and Cost Changes

You should check your Medicare Part D plan's drug list, called a formulary, each year during Annual Open Enrollment from October 15 to December 7. This is vital because plan costs and covered drugs can change for the upcoming year, 2027. Reviewing ensures your medications remain covered at a reasonable cost.

Key takeaways

• Annual Open Enrollment (October 15 – December 7) is your chance to review 2027 Part D plans.
• Drug lists (formularies) and costs can change every year, so your current plan might not be the most suitable for 2027.
• The 2027 out-of-pocket drug cap will be $2,400, and the maximum deductible will be $700.
• The Medicare Prescription Payment Plan can help manage your out-of-pocket drug costs by spreading them out.
• Compare plans on Medicare.gov to find coverage that fits your needs for the new year.

Why Review Your Drug Plan Every Year?

Medicare Part D prescription drug plans can change their benefits each year. What your plan covered this year, or how much it cost, might be different in 2027. These changes can affect your budget and access to needed medications. It is important to compare plans yearly, even if you are happy with your current one.

Your existing plan might alter its formulary, which is its list of covered drugs. It could also change its premium, deductible, or copayments for specific medications. These shifts can make a previously suitable plan less ideal for your health and financial needs in the new year. Reviewing helps you avoid surprises.

During the Annual Open Enrollment Period, from October 15 to December 7, you can switch Part D plans for coverage starting January 1. This is the main time to make changes to your Medicare drug coverage. Take advantage of this window to ensure your drug plan still works for you. You can learn more about making choices during this time by reading "Medicare Annual Enrollment Period 2027: Your Choices for Next Year".

What Is a Formulary, and Why Is It Important?

A formulary is a list of prescription drugs covered by a Part D plan. It also shows what tier each drug is on, which affects your copayment or coinsurance. Plans categorize drugs into different tiers, with lower tiers typically having lower out-of-pocket costs.

Formularies can change from year to year. A drug you take might move to a higher tier, costing you more. Or, your drug might be removed from the formulary entirely. This is why you must check the 2027 formulary for any plan you consider, including your current one.

Your plan sends you an Annual Notice of Change (ANOC) each fall, usually in September. This document details any changes to your plan's coverage, costs, or formulary for the upcoming year. It is crucial to review your ANOC carefully to understand what will change for you in 2027. Read "Your Medicare ANOC for 2027: What Changes to Look For" for more information.

How Do Drug Costs Change in 2027?

Several key changes will affect Part D drug costs in 2027. Understanding these updates can help you budget and choose a suitable plan. The deductible and the annual out-of-pocket cap are two important figures to consider when comparing plans.

These cost changes are part of ongoing efforts to make prescription drugs more affordable. They directly impact how much you might pay for your medications throughout the year. Knowing these numbers in advance helps you make informed choices during Open Enrollment.

Comparing plans means looking at more than just the monthly premium. You also need to factor in the deductible, copayments, and the out-of-pocket maximum. These elements combine to give you a full picture of a plan's potential costs.

What Is the 2027 Out-of-Pocket Drug Cap?

In 2027, the annual out-of-pocket (OOP) spending cap for Part D will be $2,400. This is a significant change from the 2026 cap, which is $2,100. Once your out-of-pocket costs for covered prescription drugs reach this amount, your plan will pay 100% of your covered drug costs for the rest of the year.

This cap helps protect people from extremely high drug costs. Before this change, people could fall into a coverage gap, sometimes called the “donut hole.” That gap has been eliminated, meaning you move directly from initial coverage to catastrophic coverage once you reach the cap.

It is important to remember that this cap applies to your out-of-pocket spending. This includes your deductible, copayments, and coinsurance for covered drugs. It does not include your monthly premiums. The cap provides peace of mind for those with high prescription drug needs.

What Is the 2027 Part D Deductible?

The maximum deductible for Part D plans will be $700 in 2027. This is an increase from the 2026 maximum deductible of $615. A deductible is the amount you must pay for your prescriptions before your plan starts to pay its share.

Some Part D plans might have a lower deductible, or even no deductible at all. However, plans with lower deductibles might have higher monthly premiums. You should consider your anticipated drug costs when looking at a plan's deductible.

For example, if a plan has a $700 deductible in 2027, you would pay the first $700 of your covered drug costs. After that, your plan would begin to pay a portion of the costs. This phase is called initial coverage.

Understanding the Stages of Part D Coverage

Part D coverage typically has a few stages before you hit the out-of-pocket cap. First, you might have a deductible to meet. This is the amount you pay for your prescriptions before your plan begins to pay.

After you meet your deductible, you enter the initial coverage phase. During this time, your plan pays a portion of your drug costs, and you pay a copayment or coinsurance. Most people stay in this phase until their combined spending reaches the annual out-of-pocket cap. This could be $2,400 in 2027.

Once you reach the out-of-pocket cap, you enter the catastrophic coverage phase. In this stage, your plan covers 100% of your covered prescription drug costs for the rest of the year. There are no more copayments or coinsurance for covered drugs once you reach this point. This structure aims to limit your annual financial burden for medications.

Using the Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan can help you manage your out-of-pocket drug costs throughout the year. This program allows you to spread your drug costs over monthly bills. It can be a strong option, especially if you have high costs early in the year.

Every Medicare drug plan, whether a stand-alone Part D plan or a Medicare Advantage plan with drug coverage, must offer this plan. Anyone with Medicare drug coverage can choose to join. If you qualify for this program and a single prescription would cost $600 or more out of pocket, you could have $0 at the pharmacy counter for that eligible prescription. This plan does not lower your overall drug costs, but it changes when you pay them, making them more manageable. You can find more information about this plan at "Managing High Drug Costs: The Medicare Prescription Payment Plan".

What If My Drugs Are Not Covered?

If you find that one of your essential medications is not on your plan's formulary for 2027, you have options. First, you can discuss this with your doctor. They might be able to prescribe an alternative drug that is covered by your plan.

Alternatively, you or your doctor can ask your plan for an exception. An exception request asks the plan to cover a drug not on its formulary. The plan reviews medical necessity and decides if it will cover the medication. This process can take some time.

If your plan denies the exception, you have the right to appeal that decision. It is important to follow the instructions provided by your plan for appeals. Knowing your rights and options can help you get the medications you need. You can find help navigating these processes through your State Health Insurance Assistance Program (SHIP).

When Can You Change Your Part D Plan?

The most common time to change your Medicare Part D plan is during the Annual Open Enrollment Period. This period runs from October 15 to December 7 each year. Any changes you make during this time will take effect on January 1 of the following year.

Outside of this period, you might qualify for a Special Enrollment Period (SEP). An SEP allows you to change plans under specific circumstances. Examples include moving to a new area or losing other creditable drug coverage.

For those with Extra Help (the Low-Income Subsidy) or Medicaid, there is a special enrollment period. Since January 1, 2025, you can switch Part D plans once per calendar month. This allows greater flexibility if your needs change. This SEP is only for switching to a stand-alone Part D drug plan.

Avoiding the Part D Late Enrollment Penalty

It is important to enroll in a Medicare Part D plan, or have other creditable drug coverage, when you are first eligible. If you go 63 or more days in a row without creditable drug coverage after your Initial Enrollment Period ends, you could face a late enrollment penalty. You can read more about this in "Medicare Part D: Avoiding Late Enrollment Penalties".

Creditable drug coverage means your prior coverage is at least as good as Medicare's standard Part D coverage. The penalty is added to your monthly Part D premium for as long as you have Medicare drug coverage. It is calculated based on the national base beneficiary premium, which is $38.99 in 2026 and $41.33 in 2027.

For example, if you had 14 full months without creditable drug coverage, your penalty in 2027 would be 14% of $41.33, which is about $5.79. This would be rounded to $5.80 and added to your monthly premium. People who receive Extra Help do not pay this penalty.

What to Look for When Comparing Plans?

When you compare Part D plans for 2027, start by listing all your prescriptions. Include the dosage and how often you take them. This list is essential for accurately comparing plan costs. You can use this information on Medicare.gov.

Next, look at the plan's formulary to make sure all your drugs are covered. Check which tier your drugs fall into, as this directly affects your out-of-pocket costs. Also, confirm if there are any quantity limits or step therapy requirements for your medications.

Finally, compare the total costs. This includes the monthly premium, the annual deductible (maximum $700 in 2027), and your estimated copayments or coinsurance for the year. Remember that the annual out-of-pocket cap for 2027 will be $2,400. Tools on Medicare.gov can help you estimate your total annual drug costs for different plans.

Where to Get Help Comparing Plans?

Comparing Medicare Part D plans can feel complex, but resources are available to assist you. The official Medicare website, Medicare.gov, offers a plan finder tool. You can enter your medications and pharmacies to see estimated costs for various plans in your area.

For personalized assistance, you can call 1-800-MEDICARE. Representatives can answer your questions and help you compare plans. This service is available 24 hours a day, seven days a week.

Your State Health Insurance Assistance Program (SHIP) also provides free, unbiased counseling. SHIP counselors can offer one-on-one help with understanding your options and choosing a plan. They are a valuable local resource for Medicare beneficiaries.

Have questions? Call 1-877-443-3251 to talk it through with a licensed insurance agent. You never pay the agent; the plans they represent do, and the decision stays yours.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Medicare has neither reviewed nor endorsed this information.