Retirees Could Face A Nearly 14% Jump In This Medicare Cost In 2027

With the cost of living on the rise and many retirees reliant on Social Security just to get by, no retired American wants to hear that they could have to spend more on healthcare — but that's what some retirees could face in 2027. On April 6, 2026, the Centers for Medicare & Medicaid Services (CMS) announced increases to both the standard deductible and annual out-of-pocket threshold for Medicare Part D prescription drug coverage. The deductible will rise from $615 to $700, an $85 increase of approximately 13.8%, while the out-of-pocket threshold for covered drugs will rise from $2,100 to $2,400, a $300 increase of approximately 14.3%.

Say, for example, you have a covered prescription subject to the deductible that costs $100 a month before insurance. Under the defined standard benefit in 2027, you'd pay the full $100 each month from January through July to meet the $700 deductible, then 25% of the bill — $25 a month — for the remaining five months. That's $825 for the year, compared with $761.25 for the same $100 monthly prescription under the 2026 standard benefit. If that covered prescription instead cost $1,000 a month, you'd eventually reach the annual out-of-pocket threshold in either year, paying no more than $2,400 in 2027 versus $2,100 in 2026 for covered Part D drugs.

But not every Part D plan charges the maximum deductible — some charge less, while others have no deductible at all. How much this change affects your wallet will depend on your plan and the medicines you take. If you're only on insulin, for example, it's exempt from the deductible, so the new higher threshold won't make any real difference if that's all of your prescription.

If you're surprised at how high a jump of nearly 14% is in one year, that feeling is entirely justified because this is the largest ever annual percentage increase in the standard Part D deductible. Since Medicare Part D coverage began in 2006, the biggest previous percentage increase was 12.5% in 2016, when the deductible rose from $320 to $360. Another large jump followed in 2017, when the deductible increased by approximately 11.1% to $400. The approximately 13.8% increase for 2027, however, is now the largest in Part D's history.

Under the Social Security Act, CMS must update the standard Part D deductible and annual out-of-pocket limit each year based on changes in average covered prescription drug spending per eligible person. For 2027, the calculation reflects both an annual spending trend and revisions to estimates from previous years. These two factors together produced a 13.65% adjustment before rounding. CMS rounds the deductible to the nearest $5 and the out-of-pocket limit to the nearest $50, producing the $700 deductible and $2,400 spending cap.

These changes are a good reason to review your Part D plan during Medicare's annual open enrollment period, which runs from October 15 through December 7. Compare premiums, deductibles, covered medications, and what you'd pay for your prescriptions at your usual pharmacy. If prescription bills are stretching your budget, you can lower your Medicare costs by seeking Extra Help for Part D premiums and deductibles.