2027 Medicare Part D Coverage: 10 Things to Know Before You Pick a Prescription Drug Plan

Choosing Medicare Part D coverage during Annual Enrollment does not have to feel overwhelming. The best prescription drug plans are not simply the ones with the lowest advertised premium. The right plan should cover the medications you take, work with your preferred pharmacy and fit your budget throughout the entire year.

The 2026 Annual Enrollment Period (AEP) runs from October 15 through December 7, 2026. During this time, you can review your 2027 Medicare options and make changes to your prescription drug coverage.

We can help you list your medications, check plan details and compare prescription drug plans side by side. Before you choose, use this practical checklist.

2027 Part D Snapshot

Several 2027 details are important as you compare plans:

• The annual out-of-pocket cap for covered Part D drugs rises to approximately $2,400. CMS has finalized the amount at $2,400.
• The national base beneficiary premium is about $41.33 per month. This is a national reference amount, not necessarily your plan’s actual premium.
• The maximum standard deductible rises to $700, although some plans have a lower deductible or no deductible.
• Negotiated prices from the Medicare Drug Price Negotiation Program continue to affect selected medications, plan costs, formularies and tiers.
• The Medicare Prescription Payment Plan lets eligible enrollees spread covered prescription costs across monthly payments.

For official details, review the CMS 2027 Rate Announcement and Medicare’s Part D cost information.

Now, let’s walk through the ten things you need to know.

1. Understand How Part D Works

You can receive Medicare Part D coverage in two primary ways:

Standalone Part D plan: You keep Original Medicare and purchase a separate prescription drug plan, often called a PDP.

Medicare Advantage plan with drug coverage: Many Medicare Advantage plans include Part D coverage in the same plan. These are often called MA-PD plans.

You generally cannot enroll in a standalone Part D plan while also receiving prescription drug coverage through a Medicare Advantage plan. Your choice depends on the type of Medicare coverage you have and how you want your medical and prescription benefits organized.

If you are unsure which setup fits your situation, reach out to us. We can review your current coverage and explain your options in plain language.

2. Check Every Medication on the 2027 Formulary

A formulary is the plan’s official list of covered prescription drugs. Do not check only the general drug category. Check every medication you take, including:

• Exact medication name
• Generic or brand name
• Dosage or strength
• How often you take it
• Quantity and days’ supply
• Whether you usually fill a 30-day or 90-day prescription

A medication may be covered by one plan but excluded by another. Even if two plans cover the same drug, they may place it on different tiers or apply different coverage rules.

Make a complete medication list before comparing plans. Tell us which prescriptions you take, and we can help organize the list for a more accurate review.

3. Learn What Drug Tiers Mean

Prescription drug plans divide medications into tiers. Each tier has its own copay or coinsurance.

A common structure may look like this:

Tier	Typical medications	Usual cost
Tier 1	Preferred generics	Lowest
Tier 2	Other generics or preferred brands	Low to moderate
Tier 3	Non-preferred brands	Higher
Tier 4	Higher-cost drugs	Higher coinsurance
Tier 5	Specialty medications	Highest

Every plan can use a different tier structure. A drug that costs a small copay on one plan may have coinsurance on another plan.

Look at the actual cost for your medications, not only the number of tiers. We can compare these costs side by side so you can see the difference more clearly.

4. Confirm Preferred Pharmacies and Mail-Order Options

Your pharmacy choice can affect what you pay. Many plans have preferred pharmacies where covered drugs may cost less than at standard in-network pharmacies.

Check:

• Whether your current pharmacy is in the plan’s network
• Whether it is a preferred pharmacy
• Whether your local independent pharmacy participates
• Whether mail order is available
• Whether a 90-day supply costs less than three 30-day fills
• Whether the plan has special savings for maintenance medications

Mail order can be convenient, but it is not automatically the least expensive choice. Compare the price, delivery schedule and refill process before selecting it.

If pharmacy access is important to you, tell us where you normally fill your prescriptions. We can include that information in your plan comparison.

5. Review Prior Authorization and Step Therapy Rules

Some prescription drug plans require additional approval before they cover certain medications. Medicare’s drug plan rules explain several common requirements.

Prior authorization means your doctor or other prescriber may need to provide information to the plan before coverage begins.

Step therapy means you may need to try a lower-cost medication first before the plan covers another medication.

Plans may also use quantity limits, such as covering only a certain number of tablets within a specific time period.

These rules do not always mean you cannot receive the medication. Your prescriber may request an exception when a different drug would be less effective or could negatively affect your health. Still, it is important to know about these requirements before you enroll.

6. Understand the Deductible and Out-of-Pocket Cap

Your plan may have a deductible. This is the amount you pay for covered drugs before the plan begins sharing costs. For 2027, the standard deductible can be as high as $700, but plan deductibles vary.

After the deductible and other plan stages, your covered Part D drug costs count toward the annual out-of-pocket limit. The 2027 cap is $2,400 for covered Part D drugs.

After you reach that limit, you generally pay $0 for covered Part D drugs for the rest of the calendar year. The cap does not apply to every type of medical expense, and drugs must be covered by your plan to count.

When comparing prescription drug plans, look at your estimated yearly cost, not just your monthly premium or one pharmacy copay.

7. Watch for Formulary Changes and Read Your ANOC

Your plan sends an Annual Notice of Change (ANOC) each fall. This document explains what will change for the upcoming year, including:

• Covered medications
• Drug tiers
• Copays and coinsurance
• Deductibles
• Pharmacy networks
• Prior authorization requirements
• Step therapy rules

Negotiated prices from the Medicare Drug Price Negotiation Program are also part of the changing Part D environment. As negotiated prices and plan designs develop, selected medications may be placed on different tiers or handled differently by a plan.

Read your ANOC carefully. If a medication is removed, moved to a higher tier or given a new coverage rule, you may want to compare other options during AEP.

8. Consider the Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan is an optional payment feature that lets you spread your covered prescription costs across the calendar year.

Instead of paying a larger amount at the pharmacy, you may receive a monthly bill from your plan. The program can help make costs more predictable, especially if you take an expensive medication early in the year.

However, the program does not lower your total drug costs. It changes when you pay, not how much you owe. You still pay your plan premium separately, if your plan has one.

Learn more about the Medicare Prescription Payment Plan. We can also help you understand whether monthly payment amounts may be useful for your situation.

9. Check for a Late Enrollment Penalty or IRMAA

You may owe a Part D late enrollment penalty if you went without Part D or other creditable prescription drug coverage for 63 days or more after becoming eligible. The penalty is generally permanent and can grow the longer you go without creditable coverage.

Creditable coverage may include certain employer, union, TRICARE, VA or other qualifying drug coverage. Keep your creditable coverage notices for your records.

You may also owe IRMAA, the Income-Related Monthly Adjustment Amount, if your income is above Medicare’s applicable thresholds. IRMAA is an additional Part D charge paid to Medicare. It is separate from your plan premium and is generally based on income from two years earlier.

Medicare’s Part D cost guide provides additional information. If you have questions about your penalty or income-related surcharge, contact Medicare or Social Security for an official determination.

10. Do Not Auto-Renew Without Reviewing Your Plan

Your current plan may have worked well this year. That does not guarantee it will be the best plan for 2027.

Prescription drug plans change every year. Your medication may move to a different tier. Your pharmacy may no longer be preferred. A prior authorization rule may be added. Your deductible or estimated yearly cost may change.

Review your plan every year during AEP. Gather your medication list, read your ANOC and compare your choices before December 7, 2026.

You do not need to handle the process alone. Fidelity Insurance Group has provided 100% telephonic consultations since 2008, and video consultations are also available. We can help list your medications and compare prescription drug plans side by side from the convenience of your home.

Make Your 2027 Prescription Drug Plan Review Easier

Start with three simple steps:

1. Write down every prescription, dosage and frequency.
2. Note your preferred pharmacies and whether you use mail order.
3. Review your ANOC and compare your 2027 Medicare Part D coverage options.

Then, reach out to Fidelity Insurance Group to review your options with us. Schedule a free consultation, tell us which prescriptions you take and let us help you navigate the process with less stress.

You can also visit our Medicare guidance and articles for additional information before AEP begins.

Important Disclaimer

Fidelity Insurance Group, LLC is not connected with or endorsed by the U.S. government or the federal Medicare program.

Plan availability, formularies, drug tiers, premiums, pharmacy networks, coverage rules and benefits vary by plan and county. Plan details may change annually. The information in this article is for general educational purposes and is not a complete description of Medicare benefits or plan terms.

Fidelity Insurance Group, LLC does not offer every plan available in your area. Currently, we represent 8 organizations that offer 52 products in your area. Please contact Medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to obtain information about all of your options. TTY users may call 1-877-486-2048.