Medicare Part D

Huntsville Medicare Part D: 2027 Cap & Changes

HUNTSVILLE, Ala. — Starting Jan. 1, 2027, the Part D out-of-pocket cap rises to $2,400: once your out-of-pocket spending on covered prescription drugs hits that number for the year, you pay nothing for the rest of that year's covered prescriptions. The cap, which took effect at $2,100 in 2026, is adjusted annually, and the next step lands right in the middle of Medicare's Annual Enrollment Period (Oct. 15 – Dec. 7), when people are picking coverage for next year.

If you take expensive medications — or you've ever hit the old "donut hole" and gotten a scary pharmacy bill — this fall's changes are worth understanding before you lock in a plan for 2027.

The 2027 cap, in plain English

For 2027, the most you'll pay out of pocket for covered Part D prescriptions in a calendar year is $2,400 (up from $2,100 in 2026). Once you hit that number, your share drops to $0 for the rest of the year on drugs your plan covers.

A few things to know:

• The cap applies to covered drugs on your plan's formulary. Drugs your plan doesn't cover don't count toward it.
• Premiums you pay for your Part D or Medicare Advantage drug plan don't count toward the cap.
• The Part D maximum deductible is $615 in 2026 and $700 in 2027, depending on the plan. Whatever you pay toward that deductible does count toward the yearly cap.

The cap resets each January.

Why the "donut hole" is gone

For years, Part D had a confusing middle stage called the coverage gap, or donut hole, where costs suddenly jumped after you and your plan had spent a certain amount. Congress phased that out.

As of 2025 and continuing in 2027, Part D has just three phases:

1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance while your plan pays the rest. 3. Catastrophic phase — once your out-of-pocket total reaches the yearly cap ($2,400 in 2027), you pay nothing more for covered drugs that year.

No more donut hole. No more sudden mid-year price spike.

The Medicare Prescription Payment Plan

Here's the piece a lot of people miss. Even with the cap ($2,100 in 2026, $2,400 in 2027), you could still get hit with a big bill in January or February if you fill an expensive prescription early in the year.

The Medicare Prescription Payment Plan is a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly payments to your plan, instead of paying it all at the pharmacy counter. You still owe the same total — it's just smoothed out.

You can sign up before the plan year starts or at any point during the year. It's most useful for people with high or unpredictable drug costs early in the year. If your out-of-pocket spending is low and steady, it may not change much for you. You can ask your Part D or Medicare Advantage drug plan directly to opt in.

What this means during Annual Enrollment

Huntsville is in Madison County, where — like everywhere in the country — Part D and Medicare Advantage plans are set at the county level. For 2027, Madison County has 70 Medicare Advantage plans from 8 carriers, compared with 66 plans from 8 carriers in 2026: 55 plans continue, 15 are new, 5 are not returning, and 6 have been renamed. Among the continuing plans, 18 are changing something in their terms, and plans more broadly have adjusted formularies and tiers to reflect the higher cap. That means the plan that worked well for you in 2026 may not be the same fit in 2027, and vice versa.

During Annual Enrollment (Oct. 15 – Dec. 7), it's worth doing three things:

• Log in to medicare.gov and use the Plan Finder to compare Part D or Medicare Advantage drug coverage against your actual medication list.
• Check whether each drug you take is on the plan's formulary and what tier it's on.
• If you want personal, unbiased help, call 1-800-MEDICARE or contact Alabama SHIP (the State Health Insurance Assistance Program), which offers free one-on-one counseling.

Changes made during AEP take effect Jan. 1, 2027. If you have Medicare Advantage, you get one more chance to switch during the Medicare Advantage Open Enrollment Period, Jan. 1 – March 31.

A note on higher-income beneficiaries

If your income is above certain thresholds, you'll pay an income-related monthly adjustment amount (IRMAA) on top of your Part D premium. For 2026, IRMAA begins above $109,000 in income for a single filer (higher for joint filers). Social Security uses your tax return from two years earlier to decide. If your income has dropped since then — retirement, a spouse's death, work reduction — you can appeal.