The annual deductible in Medicare’s prescription drug program is about to jump from $615 to $700 — an $85 increase in a single year. The yearly cap on what you pay out of pocket for prescriptions is rising too, from $2,100 to $2,400. Both changes land on January 1, 2027, and the six-week window to actually react to them opens October 15, 2026.
That window — October 15 through December 7 — is Medicare’s Open Enrollment Period, sometimes called the Annual Enrollment Period or AEP. It’s the one stretch each year when anyone with Medicare can switch drug plans, change Medicare Advantage plans, or move between Advantage and Original Medicare, no questions asked. Miss it, and you’re generally locked into whatever you have for the rest of 2027.
What’s Actually Changing in Part D for 2027
The Centers for Medicare & Medicaid Services confirmed the core numbers for 2027 in its Part D rate announcement, published July 28, 2026. The national average monthly bid amount — the benchmark CMS uses to calculate premiums and subsidies across all Part D plans — comes in at $296.05 for 2027. The base beneficiary premium, a separate figure used to set your specific plan’s premium, is $41.33.
That premium number matters less than it used to, because of a guardrail written into the 2022 Inflation Reduction Act: the base beneficiary premium can’t grow by more than 6% in any single year through 2029. Without that cap, actuaries at CMS and outside groups have estimated premiums would likely be climbing faster, given how much prescription drug spending has grown industry-wide.
The deductible and out-of-pocket cap don’t have that same growth ceiling, which is why they’ve moved more sharply. Here’s how the numbers have shifted over the past three plan years, based on CMS’s published Part D parameters and industry tracking from Q1Medicare:
| Plan Year | Standard Deductible | Out-of-Pocket Cap |
|---|---|---|
| 2025 | $590 | $2,000 |
| 2026 | $615 | $2,100 |
| 2027 | $700 | $2,400 |
Why Costs Rose Even After the “Donut Hole” Disappeared
If you’ve followed Medicare news over the past two years, this can look contradictory. Starting in 2025, the Inflation Reduction Act eliminated Part D’s old coverage gap — the notorious “donut hole” where beneficiaries once paid a much larger share of drug costs after an initial spending threshold. The law also scrapped the separate initial coverage limit, replacing the old four-phase benefit with a simpler three-phase structure: a deductible phase, an initial coverage phase where you pay 25% coinsurance, and a catastrophic phase that kicks in once you hit the out-of-pocket cap — after which you pay nothing more for the rest of the year.
That catastrophic phase is genuinely more generous than what existed before 2025, when beneficiaries still owed 5% coinsurance even after reaching the old spending threshold. But covering that added generosity costs money, and insurers and CMS have to account for it somewhere in the pricing math. Some of that cost shows up as a higher deductible and a higher cap each year, even while the base premium itself stays capped by law. In practice, that means someone who takes several expensive medications is more likely to hit their $2,400 cap faster in 2027, then pay $0 in coinsurance for the rest of the year — a better deal overall than the old system, just with a steeper entry cost.
The Enrollment Window: October 15 to December 7
Every plan you might already have — Medicare Advantage or a standalone Part D drug plan — mails out an Annual Notice of Change each September, detailing what’s shifting in your specific plan for the coming year: premiums, deductibles, drug formularies, and provider networks. That letter is worth opening, because plans routinely change which drugs they cover and which doctors are in-network, even when you haven’t touched a thing on your end.
If you do nothing during the window, most plans simply auto-renew you into their 2027 version, unless your current plan is leaving the market entirely. Any change you do make during Open Enrollment takes effect January 1, 2027. This is separate from the Medicare Advantage Open Enrollment Period that runs January through March, which only allows a narrower set of changes for people already enrolled in Advantage.
A Newer Option: Spreading Out the Bigger Deductible
One tool worth knowing about, especially with the deductible climbing to $700: the Medicare Prescription Payment Plan. Created under the Inflation Reduction Act and mandatory for every Part D plan since 2025, it lets you pay your out-of-pocket drug costs in capped monthly installments across the calendar year, instead of owing the full deductible amount at the pharmacy counter the moment you fill a prescription.
It doesn’t reduce what you owe overall — it just spreads the timing. For someone who fills one or two prescriptions in January and would otherwise face a $700 bill immediately, smoothing that into monthly payments can matter more than the headline deductible number itself. You opt in through your plan, not through Medicare directly, and enrollment requests can be made at any point during the year, including outside the fall window.
Three Things Worth Checking Before December 7
- Re-run your actual prescription list through Medicare’s Plan Finder. The plan that was cheapest for you last year may not be this year, especially if a medication moved to a different pricing tier or your current plan raised its deductible more than a competitor did.
- If you’re on Medicare Advantage, confirm your doctors and hospitals are still in-network for 2027. Network changes are one of the most common — and most overlooked — line items in the Annual Notice of Change.
- Check what extra benefits your Advantage plan bundles in. Dental, vision, and hearing coverage vary widely between plans and change year to year, and it’s worth confirming coverage like hearing aid benefits before you need to use them.
The Bigger Picture for Your Fixed Costs
Medicare costs don’t move in isolation. Part B premiums are typically deducted straight from Social Security checks before that money ever reaches a beneficiary’s bank account, which means this fall’s Medicare decisions land on top of whatever Social Security cost-of-living adjustment takes effect the same January. It’s worth reviewing both changes together rather than one at a time, the same way it’s worth understanding how Federal Reserve rate decisions ripple into savings and borrowing costs the rest of the year.
None of these figures are dramatic in isolation — an $85 deductible increase, a $300 higher cap. But for someone managing a fixed retirement income, they compound with everything else moving at once. The six-week window to do something about it is short, and it opens in about five weeks.
What to Do Next
Mark October 15 on your calendar now, not in mid-October when the window is already half gone. When your Annual Notice of Change arrives in September, read the drug formulary and network pages first — that’s where the real cost differences hide, more than in the headline premium number. And if the new $700 deductible would strain your budget in January, ask your plan about the Medicare Prescription Payment Plan before you need it, not after the first pharmacy bill arrives.
Frequently Asked Questions
When exactly is Medicare Open Enrollment for 2027 coverage?
It runs October 15 through December 7, 2026. Any changes you make take effect January 1, 2027.
How much is the Medicare Part D deductible in 2027?
The standard deductible is $700, up from $615 in 2026, according to CMS’s Part D benefit parameters.
What is the Medicare Part D out-of-pocket cap for 2027?
$2,400. Once your out-of-pocket drug spending hits that amount, you pay nothing more for covered drugs for the rest of the year.
Can I still change my Medicare Advantage plan after December 7?
Only in limited circumstances. If you’re already enrolled in Medicare Advantage, a separate Medicare Advantage Open Enrollment Period runs January 1 through March 31 and allows one additional plan switch.
