What's new for Medicare Part D in 2027?

2-minute readPublished 02/19/2025Updated 08:39 AM EST, 08/20/2026

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New features for Part D prescription drug coverage in 2027 may help make drug costs more predictable, more affordable and easier to pay. 

Here’s what you need to know about all the changes coming to Medicare Part D .

Key points

  • Part D annual out-of-pocket costs are capped at $2,400
  • The Part D Premium Stabilization Demonstration will expire
  • Inflation Reduction Act redesign becomes permanent
  • Updates to Star Ratings 
  • More drugs selected for the Drug Price Negotiation Program
 

Part D annual out-of-pocket costs are capped at $2,400

If you have Medicare Part D and your out-of-pocket costs for covered drugs reach $2,400, you’ll pay nothing for covered Part D drugs for the rest of your plan year. The cap was $2,100 in 2026.

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2-minute readPublished 02/19/2025Updated 08:39 AM EST, 08/20/2026

The Part D Premium Stabilization Demonstration will expire

The Part D Premium Stabilization Demonstration will expire after 2026. This temporary program gave insurers federal support to help limit premium increases and reduce large premium differences as plans adjusted to changes in the Medicare prescription drug benefit.

If you’re enrolled in a stand-alone Part D plan, this means insurers will set 2027 premiums without that added support. Premium impacts may vary by plan and location with some members seeing higher costs, and others with little change or even lower premiums.

Inflation Reduction Act redesign becomes permanent 

The Inflation Reduction Act (IRA) of 2022 is going through a major redesign that will become permanent starting in 2027. This redesign aims to offer more predictable prescription costs, reduce financial burden on beneficiaries and make plan shopping simpler.1 

Updates to Star Ratings 

The Star Ratings system helps people with Medicare compare the quality of health and drug plans. The Centers for Medicare & Medicaid Services (CMS) is making two big changes to the Part C and Part D Star Ratings system.

First, CMS will not use the “Excellent Health Outcomes for All” reward for the 2027 Star Ratings. Second, CMS is removing 11 measures from the system. These measures focus on administrative tasks or areas where most plans already perform very well. Because scores are so similar, these measures do not help people clearly see differences between plans.1

More drugs selected for the Drug Price Negotiation Program

Maximum fair prices will take effect for the 15 Medicare Part D drugs selected for negotiation in 2025. These prices will be added to the negotiated prices for the 10 Part D drugs that became effective in 2026.

Also, by February 1, CMS will announce 20 additional Medicare Part B or Part D drugs selected for negotiation. By November 30, CMS will publish the maximum fair prices for those 20 drugs, with the negotiated prices scheduled to take effect in 2029.2

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2-minute readPublished 02/19/2025Updated 08:39 AM EST, 08/20/2026

Sources

  1. “Contract Year 2027 Medicare Advantage and Part D Final Rule opens in new window ,” CMS.gov, last accessed Aug. 4, 2026.  
  2. “Inflation Reduction Act: CMS Implementation Timeline pdf opens in new window ,” CMS.gov, last accessed Aug. 4, 2026.