Medicare Part D
How the Part D Payment Plan Works in Chandler, Arizona
CHANDLER, Ariz. — Starting January 1, 2027, no one with a Medicare Part D plan will pay more than $2,400 out of pocket for covered prescription drugs in a calendar year. The out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027, and the next change lands right in the middle of Annual Enrollment, which runs October 15 through December 7.
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Will your prescriptions still be covered in 2027?
Part D plans rewrite their drug lists every year — tiers move, pharmacies change, drugs drop off. One call checks your exact medications against the 2027 plans in your area.
- Every prescription checked, name by name
- Your pharmacy checked for preferred pricing
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Speak to a Licensed Insurance Agent
Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, Medicare Part D out-of-pocket drug costs are capped at $2,400 per year, up from $2,100 in 2026, under a CMS rule that applies to every Part D plan.
- As of 2025, the confusing "donut hole" coverage gap is gone, leaving three simple phases: deductible, initial coverage, and catastrophic coverage where you pay nothing more once you hit the cap.
- The optional, free Medicare Prescription Payment Plan (M3P) lets you spread your drug costs into monthly installments instead of paying it all at the pharmacy, and you can join before the year starts or anytime during it.
- Annual Enrollment runs October 15 through December 7, so it's important to read the Annual Notice of Change (ANOC) your plan mailed you, since missing the deadline generally means waiting until the next enrollment period to switch plans.
For people who take expensive medications, this is a real shift. Here is what changed, what stayed the same, and the mistakes to avoid before the deadline.
The $2,100 cap is now the ceiling
In 2027, once your out-of-pocket spending on covered Part D drugs reaches $2,400, you pay nothing more for the rest of the year on those drugs. That figure applies to every Medicare Part D plan, whether it is a stand-alone drug plan or the drug coverage built into a Medicare Advantage plan.
The cap was $2,100 in 2026 and rises to $2,400 in 2027 based on the annual adjustment set by the Inflation Reduction Act. It is not tied to any specific plan or carrier — it is a program-wide rule from the Centers for Medicare & Medicaid Services (CMS).
One important note: the cap applies to drugs that your plan actually covers. If a medication is not on your plan's formulary, what you spend on it does not count toward the $2,400.
The "donut hole" is gone
For years, Part D had a confusing middle stage called the coverage gap — the "donut hole" — where costs jumped after you hit a certain spending level, then dropped again once you reached catastrophic coverage.
As of 2025, that middle stage is eliminated. Part D now has three simpler phases:
1. Deductible phase — you pay full negotiated cost until you meet your plan's deductible (no more than $700 in 2027). 2. Initial coverage phase — you and your plan share costs. 3. Catastrophic phase — once you hit $2,400 out of pocket, you pay nothing more for covered drugs that year.
If you remember dreading the donut hole, you can stop. It is not coming back.
The Medicare Prescription Payment Plan: smoothing, not saving
Along with the cap, Medicare now offers the Medicare Prescription Payment Plan, sometimes called "M3P." It is optional and free to join. Instead of paying a large amount at the pharmacy counter in a single month, you can spread your out-of-pocket drug costs across the rest of the calendar year in monthly installments billed by your plan.
Two things to understand:
- It does not lower your total drug costs. You still pay the same amount over the year — you just pay it in smaller monthly pieces.
- It works best for people who face a big cost early in the year. If your out-of-pocket drug bill is small and even, monthly billing may not help much.
You can opt in before the plan year starts or at any point during the year by contacting your Part D plan.
What this means during Annual Enrollment
Chandler is in Maricopa County, where Medicare beneficiaries have a wide range of stand-alone Part D and Medicare Advantage options to choose from. For 2027, Maricopa County has 79 Medicare Advantage plans from 16 carriers, down from 88 plans in 2026. Formularies, pharmacy networks, and premiums are being reset by every carrier for 2027.
That is why CMS urges everyone on Part D to do one thing between October 15 and December 7: read your Annual Notice of Change (ANOC). Your current plan mailed it to you in September. It tells you exactly what will be different in 2027.
Common mistakes to avoid:
- Assuming your plan is the same. A drug that was covered in 2026 may not be in 2027.
- Ignoring the pharmacy network. Preferred pharmacies can change year to year.
- Skipping the comparison on Medicare.gov. The Plan Finder tool lets you enter your drugs and see estimated annual costs across every plan available to you.
- Forgetting about IRMAA. Higher-income beneficiaries pay a surcharge on top of their Part B and Part D premiums. In 2026, those surcharges begin above $109,000 in income for a single filer (based on your 2024 tax return).
If you miss the December 7 deadline, you generally cannot switch Part D plans until the next AEP, though people already in a Medicare Advantage plan get a second window from January 1 to March 31.
By the numbers
Medicare Part B premium, 2006–2026
The standard monthly Part B premium has climbed from $88.50 in 2006 to $202.90 in 2026. Hover any point for that year’s premium.
Source: CMS. Standard premium shown; in some hold-harmless years many existing enrollees paid less. Confirm at Medicare.gov.
By the numbers
How people get Medicare in Maricopa County
(MA penetration in Maricopa County)
MA penetration from CMS enrollment data; Medigap share is an estimate. U.S. average is about 54% Medicare Advantage. These are area-level figures, not plan-specific.
Prescription coverage
How Medicare Part D works in 2027
The old coverage gap (“donut hole”) is eliminated as of 2025 (three phases now). There's now a hard yearly cap of $2,400 in 2027 on what you pay out of pocket for covered drugs, and you can spread those costs across the year with the Medicare Prescription Payment Plan.
Try it
How the 2026 Part D drug cap works
Slide to your estimated yearly prescription costs and see how the new $2,100 out-of-pocket cap protects you. This illustrates the standard Part D benefit; your plan may structure costs differently.
Once your out-of-pocket spending on covered drugs reaches $2,100, you pay nothing more for the rest of 2026. Confirm details at Medicare.gov.
Explore
When can you enroll? An interactive year
Enrollment windows are federal and the same nationwide. Confirm your personal dates at Medicare.gov or 1-800-MEDICARE.
Good to know
Frequently asked questions
Does the $2,400 cap include my monthly premium?
If I sign up for the payment plan, do I still get the $2,400 protection?
What if my drug is not on my plan's formulary?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.