Medicare Advantage

Rapid City Medicare: $2,100 Drug Cap Arrives in 2026

RAPID CITY — Starting January 1, 2027, people with Medicare Part D will have an updated ceiling on what they pay out of pocket for prescription drugs: $2,400 for the year. Once you hit that amount at the pharmacy counter, your covered Part D drugs cost you nothing more for the rest of the calendar year.

Rapid City retirees get an updated ceiling on drug costs in 2027

That's a meaningful figure for Black Hills residents who take expensive maintenance medications, and it lands right in the middle of Medicare's Annual Enrollment Period — October 15 through December 7, 2026 — when you can review and change your drug or Medicare Advantage coverage for 2027.

What actually changed, in plain English

Three things stand out heading into 2027:

• The out-of-pocket cap is $2,100. In 2025 it was $2,000. It goes up modestly each year based on a formula set by the Inflation Reduction Act.
• The coverage gap (the old "donut hole") is gone. It was eliminated in 2025. Part D now has just three phases: deductible, initial coverage, and catastrophic.
• The Part D deductible maxes out at $700 in 2027, up from $615 in 2026. Individual plans can set a lower deductible, but no Part D plan can charge more than that before coverage kicks in.

Source for these figures: the Centers for Medicare & Medicaid Services (CMS) Part D program rules, published at medicare.gov.

The Medicare Prescription Payment Plan: spreading the bill out

Hitting a $2,100 cap is a relief — but paying a big share of it in January or February isn't. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program (sometimes called "M3P") that lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying the pharmacy all at once. You still owe the same total; you just pay it monthly to your Part D plan rather than at the counter.

A few things worth knowing:

• You have to opt in — it isn't automatic.
• Your first prescription of the year could still trigger a larger monthly bill if the drug is expensive.
• It usually helps most people who face high costs early in the year. If your drug costs are low and steady, it may not be worth the paperwork.

You can sign up through your Part D plan at any time during the year.

What this looks like in Pennington County

Rapid City is in Pennington County, where Medicare eligibles choose between Original Medicare with a stand-alone Part D drug plan, or a Medicare Advantage plan that usually bundles drug coverage in.

Plan availability — how many stand-alone Part D plans and how many Medicare Advantage plans are offered — is set at the county level by CMS each year. To see the exact count and options for Pennington County for 2027, use the Plan Finder at medicare.gov/plan-compare and enter your ZIP code. The tool will show every plan available where you live, along with its formulary (the list of covered drugs) and pharmacy network. If you're keeping your current plan, check its Annual Notice of Change (ANOC) for 2027 details.

If you'd rather talk to a real person locally, South Dakota's State Health Insurance Assistance Program (SHIP) — called Senior Health Information & Insurance Education (SHIINE) in South Dakota — offers free, unbiased counseling. The western regional office serves Rapid City and the surrounding Black Hills area.

A quick note on IRMAA

Higher-income beneficiaries pay an extra amount on top of their Part B and Part D premiums, called IRMAA (Income-Related Monthly Adjustment Amount). For 2026, IRMAA kicks in above $109,000 in modified adjusted gross income for a single filer (and $218,000 for a couple filing jointly). Social Security uses your 2024 tax return to make that determination. If your income has since dropped — because you retired, sold a business, or lost a spouse — you can ask Social Security to reconsider using Form SSA-44.

Dates to circle

• October 15 – December 7, 2026: Annual Enrollment Period. Any change you make takes effect January 1, 2027.
• January 1, 2027: The $2,400 cap and updated Part D rules take effect.
• January 1 – March 31, 2027: Medicare Advantage Open Enrollment. If you're already in a Medicare Advantage plan, you get one chance to switch to another Medicare Advantage plan or return to Original Medicare.