Part D is Medicare drug coverage: help paying for the prescription drugs you need, from private insurance companies approved by Medicare. It's optional. In 2027, what you pay out of pocket for your covered drugs is capped at $2,400.
The amounts
2026
2027
Yearly cap on what you pay for covered Part D drugs
$2,100Official
$2,400Official
Highest yearly deductible a drug plan can have
$615Official
$700Official
What matters most
What Part D covers
Medicare drug coverage (Part D) helps pay for the brand-name and generic drugs you need. It's optional, and it's offered by insurance companies and other private companies approved by Medicare.
Two ways to get it
You can join a separate Medicare drug plan to add to Original Medicare. Or you can get your coverage through a Medicare Advantage plan (Part C), which is an alternative to Original Medicare — most of these plans include Part D, so you don't need a separate drug plan.
A yearly cap on your costs
In 2027, what you pay out of pocket for covered Part D drugs is capped at $2,400. After that, you won't have to pay out of pocket for covered drugs for the rest of the calendar year.
Want the detail? How it works, a worked example and common mix-ups are in .
Words on this page
Formulary
a plan's list of the drugs it covers
Tier
a cost level on the drug list; lower tiers cost you less
Deductible
the amount you pay yourself before the plan starts to pay
Premium
the monthly amount you pay to keep the coverage
Who can answer for your situation
To compare drug plans or check whether your medicines are covered, use the plan finder at Medicare.gov or call 1-800-MEDICARE (1-800-633-4227).
Each plan has a list of covered drugs called a formulary. It includes at least 2 drugs in the most commonly prescribed categories and classes, but plans can choose which drugs they'll offer. Many plans place drugs into tiers, and generally, a drug in a lower tier will cost you less than a drug in a higher tier.
What you pay in 2027
Some plans have a yearly deductible. In 2027, no Medicare drug plan may have a deductible more than $700. After any deductible, you'll generally pay 25% of the cost of your drugs until your out-of-pocket spending on covered Part D drugs reaches the $2,400 cap.
You also pay a monthly premium for the coverage, whether you get covered drugs or not. You may have to pay more, depending on your income.
An example
Say you have a 2027 drug plan. First you pay any deductible — no plan may set it above $700. Then you generally pay 25% of your drug costs, until what you've paid for covered Part D drugs reaches $2,400. After that, you won't have to pay for those covered drugs for the rest of the year.
Why join even if you feel healthy
Medicare drug coverage is optional. But even if you don't take prescription drugs now, Medicare suggests considering it, to avoid paying a late enrollment penalty if you join a plan later.
Common mix-ups
These are the pairs people most often mix up.
Part C vs. Part D
Part D is only the drug coverage. Part C — also called Medicare Advantage — is a whole health plan that usually includes Part D. If your Medicare Advantage plan already includes drug coverage, you don't add a separate Part D plan.
The premium vs. the $2,400 cap
The $2,400 cap in 2027 is on what you pay for the covered drugs themselves. Your monthly plan premium is separate — you pay it whether or not you get covered drugs.
They're for two different paths. Medigap only helps pay your costs under Original Medicare, so it can't be used with a Medicare Advantage plan. In most cases, a company can't sell you Medigap while you're in Medicare Advantage.
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Can I trust this?
Checked by TapTap. Every fact on this page was checked against the official sources it quotes, on September 28, 2026.
Checking compares each fact with the official source it quotes. It isn’t medical or legal advice.
1 What the source says · What's Medicare drug coverage (Part D)?
Medicare drug coverage (also known as Medicare Part D) helps pay for the brand-name and generic drugs you need.
Checked September 27, 2026
2 What the source says · What's Medicare drug coverage (Part D)?
It's optional and offered to everyone with Medicare by insurance companies and other private companies approved by Medicare.
Checked September 27, 2026
15 What the source says · What's Medicare drug coverage (Part D)?
Even if you don't take prescription drugs now, consider getting Medicare drug coverage to avoid paying a late enrollment penalty if you join a plan later.
General education, not individualized advice. For your own situation, you can call 1-800-MEDICARE or your State Health Insurance Assistance Program (SHIP).
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