Reviewed by Anthony Howe, Licensed Insurance Agent, NPN #20649362. Updated October 23, 2026, with the 2027 out-of-pocket cap, deductible and negotiated drug prices.
Prescription coverage is the part of a Medicare plan most likely to change from one year to the next. If you live in San Diego County and have a Part D plan or a Medicare Advantage plan with drug coverage, the Annual Enrollment Period (October 15 to December 7, 2026) is the time to check how your medications will be covered in 2027.
How drug tiers work
Each plan has a drug list, called a formulary, that groups covered drugs into tiers. Lower tiers usually hold generic drugs with the lowest copays; higher tiers hold brand-name and specialty drugs with higher copays or coinsurance. The same drug can sit on different tiers in different plans, and a plan can move a drug to another tier, or off its list, for the new year.
What to check for 2027
- Is each drug still on the formulary? Your plan’s Annual Notice of Change, mailed by September 30, lists formulary changes. Check the exact drug, strength and form (tablet, extended-release, injection), since a plan can cover one and not another.
- Which tier is it on? A move to a higher tier usually means a higher cost. Note whether the tier charges a flat copay or a percentage (coinsurance), which rises with the drug’s price.
- Any new restrictions? Look for prior authorization, step therapy or quantity limits.
- Is your pharmacy preferred? Many plans charge less at preferred pharmacies, and mail order can cost less again.
- What’s the deductible? Some plans apply it to all tiers, some only to higher tiers.
- What will the year cost? Estimate twelve months of fills, not just the first one, since the deductible makes January and February look more expensive than the rest of the year.
The 2027 out-of-pocket cap: $2,400
Since 2025, Medicare drug coverage (Part D, and the drug coverage in Medicare Advantage plans) has a yearly cap on what you pay out of pocket for covered drugs. The cap was $2,000 in 2025 and $2,100 in 2026, and it is $2,400 for 2027. Once you reach it, you pay $0 for covered Part D drugs for the rest of the calendar year. Medicare.gov lists the current amounts.
A few details decide how fast you get there:
- The deductible counts toward the cap. The most a plan can charge for 2027 is $700, up from $615, and many plans charge less or nothing. It isn’t $700 on top of $2,400.
- Extra Help counts too. Amounts Extra Help pays on your behalf count toward the cap.
- Premiums don’t count, and neither do drugs your plan doesn’t cover, unless the plan approves the drug through an exception or appeal.
- Discount cards don’t count. A pharmacy discount card or cash-price site can sometimes beat your copay on a single fill, but purchases made outside your Medicare coverage don’t count toward your deductible or the cap.
- The cap is for drugs only. It’s separate from a Medicare Advantage plan’s yearly limit on medical costs.
In California, stand-alone Part D premiums rose noticeably for 2027: the median went from about $107 to about $151 a month, and no plan in the state has a $0 premium. Our look at CMS’s 2027 plan data has the details. Covered insulin still costs no more than $35 for a month’s supply. The Medicare Prescription Payment Plan lets you spread your costs into monthly payments across the year instead of paying at the pharmacy counter. You can ask your plan to sign you up.
15 more drugs with negotiated prices in 2027
Medicare’s negotiated prices for the first 10 drugs took effect in 2026. On January 1, 2027, negotiated prices begin for 15 more:
- Ozempic, Rybelsus and Wegovy (semaglutide)
- Trelegy Ellipta and Breo Ellipta (COPD and asthma)
- Xtandi, Pomalyst, Ibrance and Calquence (cancer)
- Tradjenta and Janumet (diabetes)
- Ofev (lung disease), Linzess and Xifaxan (digestive conditions), Austedo (movement disorders), Vraylar (mental health) and Otezla (psoriasis and psoriatic arthritis)
A lower negotiated price doesn’t mean everyone pays the same amount. Your cost still depends on your plan’s tier, copay or coinsurance and deductible, and the plan’s usual coverage rules still apply. If you take one of these drugs, it’s worth comparing how each 2027 plan covers it.
GLP-1 drugs for weight management: the Medicare GLP-1 Bridge
Since July 1, 2026, a temporary Medicare program called the GLP-1 Bridge has let people with Part D who meet its clinical criteria get certain GLP-1 drugs for weight management for $50 a month. It runs through December 31, 2027. It works outside your regular Part D benefit, so the $50 doesn’t count toward your deductible or the $2,400 cap, and Extra Help doesn’t lower it. Eligibility is based on clinical criteria and requires a Part D plan.
Help paying for drugs
Extra Help is a federal program that lowers Part D premiums and drug copays for people with limited income and resources. You can apply through Social Security. Qualifying also gives you a chance to change drug plans outside the Annual Enrollment Period. Extra Help changes what you pay, but it doesn’t change which drugs a plan covers, so the formulary check above still applies. If you also have Medi-Cal, your Medi-Cal and drug coverage are separate pieces worth reviewing one at a time.
Is Part D required?
No, Part D is optional. But if you go 63 days or more without Part D or other creditable drug coverage after you’re first eligible, you may owe a late enrollment penalty for as long as you have Part D. Coverage from an employer or retiree plan can count as creditable; your plan will tell you in writing each year. A discount card doesn’t count as creditable coverage.
Comparing plans with your drug list
The most reliable way to compare is with your own medications. Enter your drugs, doses and pharmacy in the Medicare Plan Finder, or bring your list to a licensed agent, who can run the same comparison across the plans they represent.
- The Medicare Plan Finder on Medicare.gov, which compares plans using your own drug list and pharmacy.
- 1-800-MEDICARE (1-800-633-4227), available 24 hours a day.
- HICAP, California’s free Medicare counseling program: 1-800-434-0222.
- A licensed agent. Rock Meadow compares plans from the insurers we represent, at no charge to you. Call (760) 654-6760.
See also our Annual Enrollment Period guide and Medicare in San Diego.
Sources
- CMS, CY2027 Medicare Advantage and Part D landscape file (October 2026): 2027 Part D out-of-pocket threshold ($2,400), standard deductible ($700) and California stand-alone Part D premiums.
- Medicare.gov, Costs for Medicare drug coverage: how the cap, deductible, insulin limit and Medicare Prescription Payment Plan work.
- CMS, Selected Drugs and Negotiated Prices: the 15 drugs with negotiated prices starting January 1, 2027.
- CMS, Medicare GLP-1 Bridge: the $50 copay, program dates and how it works outside Part D.
- Social Security, Extra Help with Medicare prescription drug costs.
