Medicare Part D

Medicare Part D Cap & Payment Plan: Anchorage 2027

ANCHORAGE — When Medicare Part D first put a firm annual ceiling on what enrollees pay out of pocket for covered prescription drugs, that ceiling was $2,100 in 2026. For 2027, it rises to $2,400. For Anchorage residents who take expensive medications — or who have watched a spouse or parent struggle with pharmacy bills — this remains one of the biggest changes to Medicare in years.

Here is a plain-English guide to how the new cap works, what happened to the old "donut hole," and how the optional monthly payment plan can help you spread costs across the year.

What the Part D cap actually means

Once your out-of-pocket spending on covered Part D drugs reaches the annual cap — $2,100 in 2026 and $2,400 in 2027 — you pay $0 for the rest of that calendar year on those drugs. The clock resets each January.

A few important details, according to CMS:

• The cap applies to covered drugs on your plan's formulary. Drugs your plan doesn't cover don't count toward the cap.
• Your Part D deductible (up to $615 in 2026) and your cost-sharing (copays or coinsurance) both count toward the $2,100.
• Monthly plan premiums do not count toward the cap.
• The cap applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.

For someone in Anchorage taking a single high-cost specialty medication, the cap can mean hitting that ceiling early in the year and then paying nothing more for covered prescriptions until January.

The "donut hole" is gone

If you've been on Medicare for a while, you probably remember the coverage gap — the dreaded "donut hole" — where costs jumped after you and your plan hit a certain spending threshold. That phase was eliminated in 2025.

Part D now has three phases instead of four:

1. Deductible phase — you pay full negotiated price until you meet the deductible (up to $615 in 2026). 2. Initial coverage phase — you pay a copay or coinsurance; your plan pays the rest. 3. Catastrophic phase — once your out-of-pocket costs hit $2,100 in 2026 ($2,400 in 2027), you pay $0 for the rest of the year.

That is the entire structure now. No middle gap where costs suddenly spike.

The Medicare Prescription Payment Plan

Hitting the cap early in the year is good news — but it can also mean a painful bill in January or February. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly installments, instead of paying the pharmacy in one lump sum. You still owe the same total amount, but the pharmacy gets paid by your plan up front, and your plan bills you monthly.

A few things worth knowing:

• It is opt-in. You have to sign up through your Part D or Medicare Advantage drug plan.
• It works best for people with predictable, higher drug costs early in the year. If your prescriptions are inexpensive, monthly billing may not help much.
• If you miss payments, you can be removed from the program (though you keep your drug coverage).

You can join at any time during the year, but signing up before or early in the year gives you the most benefit.

What Anchorage residents should think about this fall

Anchorage is in Anchorage Municipality, which — like the rest of Alaska — has its own mix of stand-alone Part D plans and Medicare Advantage plans with drug coverage. Availability and formularies vary, so the plan that worked well for you in 2026 may look different in 2027. The 2027 lineup is in each plan's ANOC and on Medicare.gov's Plan Finder.

A few practical steps:

• Read your Annual Notice of Change (ANOC). Your current plan mailed this in September. It shows what's changing for 2027 — including which drugs are covered, tier changes, and pharmacy network updates.
• Check that your drugs are still on the formulary. Formularies change every year.
• Compare using the Plan Finder at medicare.gov, which lets you enter your specific medications and Anchorage ZIP code.
• Think about the payment plan. If you expect high drug costs, ask whether the smoothing option makes sense for your cash flow.

The Annual Enrollment Period runs October 15 through December 7. Changes you make take effect January 1. If you're in a Medicare Advantage plan, you also get a second window — January 1 through March 31 — to switch to a different Advantage plan or return to Original Medicare.

A note on higher earners

If your 2024 income (the year Social Security looks back on) was above $109,000 for a single filer or $218,000 for a couple, you'll pay an income-related monthly adjustment amount (IRMAA) on top of your Part D premium in 2026. IRMAA does not affect the cap ($2,100 in 2026, $2,400 in 2027), but it does affect what you pay each month.