How the 2027 cap works
The Inflation Reduction Act replaced the old coverage stages, including the coverage gap, with a hard yearly limit starting in 2025. Medicare describes three stages:
- Deductible. If your plan has one, you pay the full cost of covered drugs until you meet it. No plan can set a 2027 deductible above $700, and some have none.
- Initial coverage. You pay your plan's copays or coinsurance for covered drugs until your out-of-pocket spending reaches the cap.
- Catastrophic coverage. When your out-of-pocket spending on covered Part D drugs reaches $2,400, you move here automatically and pay nothing more for covered Part D drugs until December 31.
Your monthly Explanation of Benefits shows how close you are. CMS set the 2027 amount in its CY 2027 Rate Announcement, published in April 2026.
What counts, and what doesn't
| Counts toward the cap | Doesn't count |
|---|---|
| Your deductible, copays and coinsurance for drugs on your plan's formulary (including approved exceptions) | Monthly premiums and any Part D late penalty |
| Certain payments made for you, such as Extra Help or an AIDS Drug Assistance Program | Drugs your plan doesn't cover, or drugs bought with a discount card instead of your plan |
| Costs billed to you through the Medicare Prescription Payment Plan | Part B drugs, such as many infusions and injections given in a doctor's office |
Insulin has its own protection: each covered insulin costs no more than $35 for a one-month supply, with no deductible, and what you pay still counts toward the cap.
What it means in Florida
All 11 standalone Part D plans sold in Florida for 2027, and every Medicare Advantage plan with drug coverage, have the same $2,400 limit; plans can't set a higher one. Plans still differ in which drugs they cover and what you pay before you reach it, which is why the formulary matters more than the cap when you compare. The State Group Insurance Program's group MA-PD plans include Part D, so the cap applies there too. Florida has no state drug-assistance program for seniors that would pay part of your share; the main help is federal Extra Help (see Extra Help in Florida).
If you take a high-cost specialty drug, you may hit the cap early in the year; the Medicare Prescription Payment Plan lets you spread those costs over monthly bills. Try the drug cap calculator, or compare plans for your drugs on PlanMatch. You can also request a call from a licensed insurance agent.
Related questions
What is the Medicare Prescription Payment Plan?
Monthly bills instead of big pharmacy charges.
How many Part D plans are in Florida for 2027?
The state's 2027 plan count.
What is Medicare's insulin cap?
The monthly limit on covered insulin.
Sources
- CMS — CY 2027 Rate Announcement (2027 Part D deductible and out-of-pocket threshold)
- Medicare.gov — How much does Medicare drug coverage cost?
- Medicare — Your Guide to Medicare Drug Coverage (ADAP payments toward the cap)
- Medicare.gov — Medicare Prescription Payment Plan
- Medicare.gov — Insulin
- Florida Department of Management Services, MyBenefits — MA-PD plans (Parts A, B and D)
More questions in this guide
- Does Florida have a state prescription assistance program for seniors?
- How many Medicare Part D plans are in Florida for 2027?
- What is the Medicare Prescription Payment Plan?
Part of the guide: Medicare Part D in Florida · All questions
Frequently asked questions
Does my premium count toward the Part D cap?
No. Monthly premiums, including any late enrollment penalty or income-related amount, never count toward the $2,400 cap. Only what you pay for covered Part D drugs counts.
Does the Medicare Advantage out-of-pocket maximum include drugs?
No. A Medicare Advantage plan's yearly maximum covers Part A and Part B services. Its Part D drug coverage has its own separate $2,400 cap in 2027.
Does the cap reset every year?
Yes. It resets on January 1. If you reach it in 2026, you start over in 2027, and CMS adjusts the amount each year.
Does help from Florida's AIDS Drug Assistance Program count toward the cap?
Yes. Medicare says payments from an AIDS Drug Assistance Program count toward your Part D out-of-pocket cap, as do Extra Help payments. Florida's ADAP is run by the Florida Department of Health.
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