Medicare Part D 2027 Donut Hole Calculator
The 2025 Inflation Reduction Act capped Part D out-of-pocket at $2,000/year starting 2025, eliminating the catastrophic coinsurance phase. This 2027 calculator shows your projected drug spend across the new Part D phases.
| Full retail drug cost / year | — |
| Phase 1: Deductible (you pay 100%) | — |
| Phase 2: Initial coverage (typically 25%) | — |
| Phase 3: Catastrophic — capped 2027 | — |
| Total OOP at $2,000 cap | — |
| Plan premiums × 12 | — |
| Total cost (OOP + premiums) | — |
The 2025 Inflation Reduction Act capped Part D out-of-pocket at $2,000/year starting 2025, eliminating the catastrophic coinsurance phase. This 2027 calculator shows your projected drug spend across the new Part D phases.
How Part D Works In 2027 (Post-IRA)
The Inflation Reduction Act fundamentally changed Part D for 2025 and beyond. The new structure has only three phases (not four): Phase 1 — Deductible (up to $545 in 2025, similar in 2027) where you pay 100% of drug cost until met. Phase 2 — Initial coverage where you pay 25% of each prescription. Phase 3 — $2,000 OOP cap: once your share of drug spending hits $2,000 for the year, you pay $0 for the rest of the year on covered drugs.
The $2,000 Cap Changes Everything
Pre-IRA, beneficiaries on expensive specialty drugs (cancer, MS, biologics) routinely paid $10,000-$30,000/year out of pocket. The $2,000 cap eliminates that catastrophic risk. Combined with the new M3P (Medicare Prescription Payment Plan), you can spread the $2,000 across monthly installments instead of front-loading it in January. The donut hole — once Part D's most-hated feature — is effectively dead.
Choosing The Right Plan In 2027
Don't optimize for premium alone. The cheapest premium plan with the highest deductible is wrong if you take expensive maintenance medications. Run your specific drug list through Medicare.gov's Plan Finder — it shows total annual cost for YOUR drugs across all plans in your zip. Compare 3-5 plans. Most beneficiaries can save $200-$1,200/year just by switching plans during AEP (Oct 15 - Dec 7) each year, but only 10-15% actually do.
Part D Mistakes That Waste Money
(1) Auto-renewing the same plan every year — plan formularies and premiums change annually. 60% of beneficiaries could save $200-$1,200/year by switching plans during AEP (Oct 15-Dec 7). Run Medicare.gov Plan Finder each fall. (2) Filling brand drugs when generics are equally effective — switch to generic or therapeutic alternative; ask the doctor. (3) Not using 90-day mail order for maintenance drugs — most plans give 30-50% discount. (4) Not applying for Extra Help (LIS) if income under 150% FPL ($22,590 single 2024) — LIS waives or reduces premium, deductible, and copays.
Last updated May 2026. Sources cited in tool output.