Medicare Part D

Tuscaloosa Part D 2027: the $2,400 cap

Tuscaloosa, Alabama — Starting January 1, 2027, Medicare Part D will cap what you pay out of pocket for covered prescription drugs at $2,400 for the year. It's a continuation of the biggest shift in drug coverage in years, and if you take expensive medications, it could change how you plan your budget in 2027.

Here's a plain-English walk-through of what's changing, what stays the same, and the mistakes to avoid during this Annual Enrollment Period (October 15 through December 7).

The Part D cap, in plain English

Under the old Part D design, there was no ceiling on what you could spend on covered drugs in a year. In 2025, Medicare set that ceiling at $2,000. It was $2,100 in 2026, and for 2027 it rises to $2,400, adjusted for inflation.

Once your out-of-pocket spending on covered Part D drugs reaches $2,400 in a calendar year, you pay nothing for those covered drugs for the rest of the year. The cap resets every January 1.

A few things to keep in mind:

• The cap applies to covered drugs on your plan's formulary. If a drug isn't covered, what you pay for it doesn't count toward the cap.
• Part D premiums don't count toward the $2,400.
• The cap applies whether your drug coverage is a stand-alone Part D plan or built into a Medicare Advantage plan with drug coverage.

The "donut hole" is gone

If you've been on Medicare for a while, you probably remember the coverage gap — the "donut hole" — where your share of drug costs jumped in the middle of the year. That phase was eliminated in 2025 and remains gone in 2027.

Part D now has three phases:

1. Deductible phase — You pay full negotiated cost until you meet your plan's deductible (up to a maximum of $700 in 2027). 2. Initial coverage phase — You pay a share (usually 25%) of the cost of covered drugs. 3. Catastrophic phase — Once your out-of-pocket spending hits $2,400, you pay nothing more for covered drugs that year.

No more mid-year price spike. It's a simpler structure.

The Medicare Prescription Payment Plan

Even with the cap, a $2,400 bill early in the year can hit hard if you take a costly medication in January. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program offered through every Part D plan. Instead of paying the pharmacy at the counter, you can spread your out-of-pocket drug costs into monthly payments across the calendar year. You still owe the same total — it's not a discount — but the payments are smoothed out.

A few things to know before opting in:

• You have to sign up with your Part D or Medicare Advantage drug plan. It's not automatic.
• You can join before the year starts or anytime during the year.
• If you miss a monthly payment, you can be removed from the program, though you keep your drug coverage.
• It tends to help most if you have high drug costs early in the year. If your drug costs are low and steady, it may not make much difference.

Mistakes to avoid this fall

Tuscaloosa is in Tuscaloosa County, where — as in the rest of Alabama — Part D plans and Medicare Advantage plans with drug coverage are chosen at the county level. Here are the missteps we see most often:

• Assuming your plan will look the same in 2027. Every fall, plans send an Annual Notice of Change. Formularies, tiers, and pharmacy networks can shift. Read it. For the 2027 lineup, check each plan's ANOC and Medicare.gov's Plan Finder.
• Skipping the drug list check. Even with the $2,400 cap, if your medication isn't on your plan's formulary, you'll pay full price and it won't count toward the cap.
• Confusing the cap with "free drugs." You still pay cost-sharing until you reach $2,400.
• Forgetting the deadline. Annual Enrollment ends December 7. Medicare Advantage Open Enrollment runs January 1 through March 31, but that window is more limited in what you can change.
• Overlooking IRMAA. Higher-income enrollees pay an income-related surcharge on Part D. For 2026, IRMAA begins above $109,000 in income for a single filer (based on your 2024 tax return).

Where to get personal help

The rules above are program-wide. What matters for your household is how your specific drugs, pharmacy, and income line up with the plans available in Tuscaloosa County. For that, use trusted, no-cost sources:

• Medicare.gov Plan Finder — Enter your drugs and pharmacy to compare plans side by side.
• 1-800-MEDICARE (1-800-633-4227) — 24/7 help from Medicare directly.
• Alabama SHIP (State Health Insurance Assistance Program) — Free, unbiased counseling from trained volunteers. In Alabama, SHIP is run through the Alabama Department of Senior Services.