Medicare Part D Explained for Arizona, 2027

Medicare Part D is prescription drug coverage sold by private companies, either as a standalone plan alongside Original Medicare or built into a Medicare Advantage plan. For 2027, CMS has set the maximum standard deductible at $700 and the yearly out-of-pocket cap at $2,400, up from $615 and $2,100 in 2026 (CMS CY2027 Rate Announcement). Once you hit the cap, you pay nothing for covered drugs for the rest of the year. Arizona has 9 standalone Part D plans for 2027 in the CMS Landscape file, and every one covers drugs differently, so the plan that fits depends on what you take.

How the benefit works, stage by stage

Part D has three stages in a calendar year:

• Deductible: if your plan has one, you pay the full plan price for covered drugs until you meet it. For 2027 the deductible can be no more than $700; some plans have a lower deductible or none, and many put low-cost generics outside the deductible.
• Initial coverage: you pay copays or coinsurance set by the plan, around 25 percent on the standard benefit, until your out-of-pocket spending on covered drugs reaches the cap.
• Catastrophic coverage: once you reach $2,400 in 2027 ($2,100 in 2026), you pay $0 for covered Part D drugs for the rest of the year.

Formularies, tiers and rules

Each plan has a formulary, its list of covered drugs, usually grouped into tiers. Lower tiers (preferred generics) cost the least; higher tiers (specialty drugs) cost the most. The same drug can sit on different tiers in different plans, which is why two plans with similar premiums can produce very different yearly costs.

Plans can also apply rules to certain drugs:

• Prior authorization: the plan must approve the drug before it covers it.
• Step therapy: you try a lower-cost drug first before the plan covers the one your doctor prescribed.
• Quantity limits: a cap on how much the plan covers in a period.

Protections built into Part D

• Covered insulin costs no more than $35 for a month's supply, and you do not have to meet the deductible first.
• Adult vaccines recommended by the CDC, such as shingles, are covered at no cost to you.
• The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments across the year instead of paying large amounts at the pharmacy counter. You opt in through your plan.
• Extra Help lowers costs for people with limited income and resources; see our Extra Help and Medicare Savings Programs guide for Arizona.

Part D plans in Arizona for 2027

According to the CY2027 CMS Landscape file, Arizona has 9 standalone Part D plans for 2027, with monthly premiums from $5.30 to $191.50 and deductibles up to the $700 maximum. Most Medicare Advantage plans in Maricopa and Pinal counties also include drug coverage: 45 of Maricopa's 52 plans and 41 of Pinal's 47.

A low premium can come with a high deductible or a formulary that does not fit your drugs. The only reliable way to compare is to price your exact drugs, doses and pharmacy in each plan for a full year.

The late penalty and the income surcharge

If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, a penalty is added to your premium for as long as you have Part D. It is 1 percent of the national base beneficiary premium for each full month you went without. Using the 2026 base premium of $38.99, two years without coverage adds 24 percent, about $9.40 a month (CMS, 2026). Because the base premium changes yearly, so does the penalty.

Creditable coverage means drug coverage expected to pay at least as much as standard Part D, such as many employer plans, TRICARE, and VA health care. Your employer or plan sends a yearly notice that tells you whether your coverage is creditable. Keep it.

Part D has an income-related surcharge, like Part B. In 2026 it starts above $109,000 of modified adjusted gross income for a single filer or $218,000 for joint filers and ranges from $14.50 to $91.00 a month on top of your plan premium, based on your 2024 tax return (CMS, 2026). If your income has dropped because you retired, Social Security form SSA-44 lets you ask for a new determination; it is linked on our Resources page.

Choosing a plan in the East Valley

• List every prescription with the dose and how often you take it.
• Note your pharmacy, or two that you would use, and whether you would use mail order.
• Price the full year in each plan, including the deductible, not just the monthly premium.
• Check for prior authorization, step therapy or quantity limits on your drugs.
• Confirm your pharmacy has preferred cost-sharing in the plan; the same drug can cost less at a preferred pharmacy.
• Repeat every fall, because formularies, tiers and pharmacy networks change each January.

When a drug is denied: exceptions and appeals

If the pharmacy tells you a drug is not covered, ask for the written notice and call your plan. You or your prescriber can request a coverage determination or an exception, for example to cover a drug that is not on the formulary, to waive a step therapy requirement, or to lower the tier. Plans must decide standard requests within 72 hours, and within 24 hours if waiting could seriously harm your health and your prescriber says so.

If the plan says no, you can appeal. Your prescriber's supporting statement is usually the deciding factor, so ask the office to explain why the drug is medically necessary for you.

New members get a transition fill: during the first 90 days in a new plan, the plan generally must give you a temporary supply of a drug you were already taking, giving you time to ask for an exception or switch drugs with your doctor.

Standalone Part D or drug coverage inside an Advantage plan

If you choose Original Medicare, with or without a Medicare Supplement, you get drug coverage through a standalone Part D plan. If you choose a Medicare Advantage plan, the drug coverage is usually built in, and you generally cannot add a separate standalone Part D plan to most Advantage plans.

The protections are the same either way: the $700 deductible limit and $2,400 cap for 2027, the $35 insulin limit, and $0 recommended vaccines. What differs is the formulary, the tiers and the pharmacy network, which are set plan by plan.

One local detail worth knowing: of the 52 standard Medicare Advantage plans in Maricopa County for 2027, 7 do not include drug coverage, and 6 of Pinal's 47 do not (CY2027 CMS Landscape). These are often chosen by people with VA or other creditable drug coverage. If you pick one without creditable coverage elsewhere, the late penalty can apply.

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The bottom line

Part D is now capped: in 2027 you will pay no more than $2,400 out of pocket for covered drugs, and the deductible can be no more than $700. Within those limits, plans differ a lot in premiums, tiers and pharmacies. Price your actual drugs at your actual pharmacy for the whole year, and do it again every fall.