Medicare Part D

$2,100: The New Medicare Part D Ceiling in Scottsdale

SCOTTSDALE, Ariz. — Starting Jan. 1, 2026, Medicare's Part D prescription drug benefit looks different than it did just two years ago. The most important change for anyone who takes expensive medications: once your out-of-pocket spending on covered drugs hits $2,100 in a calendar year, you pay $0 for the rest of that year's covered prescriptions.

This is the biggest shift to Part D in a generation, and it lands right in the middle of Medicare's Annual Enrollment Period, which runs through Dec. 7. Here's what changed, what stayed the same, and what Scottsdale-area readers should keep in mind before the 2027 plan year begins.

The $2,400 cap, in plain English

For 2026, Medicare has set a hard annual limit on what you can be charged out-of-pocket for covered prescription drugs under Part D. That cap is $2,100, up from $2,000 in 2025. Once you reach it, your share of the cost for covered drugs drops to zero for the rest of the year.

A few things to know:

• The cap applies to covered Part D drugs — the medications on your plan's formulary.
• It counts your deductible, copays, and coinsurance for those drugs.
• It resets every January.
• It does not include your monthly premium or drugs Part D doesn't cover.

The cap applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.

The "donut hole" is gone

If you've been on Medicare for a while, you probably remember the coverage gap — often called the donut hole. That was the awkward middle stretch where your costs went up after you and your plan had spent a certain amount, and then came back down once you hit catastrophic coverage.

That gap was eliminated as of 2025, and it stays gone in 2027. Part D now has just three phases:

1. Deductible — up to a maximum of $700 in 2027 (plans can set it lower). 2. Initial coverage — you pay a share of the cost until you hit the $2,400 cap. 3. Catastrophic coverage — you pay nothing for covered drugs the rest of the year.

Simpler, and easier to plan around.

The Medicare Prescription Payment Plan

Hitting a $2,400 cap is a relief, but $2,400 in January or February can still sting. 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 all at once. You still owe the same total amount — you just pay it to your plan over time rather than up front at the counter.

A few basics:

• It's voluntary. You have to opt in.
• You can sign up before the year starts or any time during the year.
• It tends to help most if you have a large drug bill early in the year.
• If you take only low-cost generics, it may not be worth the paperwork.

You can ask your Part D or Medicare Advantage drug plan how to enroll.

What this means during Annual Enrollment

Scottsdale is in Maricopa County, where Medicare beneficiaries have a wide range of stand-alone Part D and Medicare Advantage plans with drug coverage to choose from. The specific list changes every year, and so do formularies, pharmacy networks, and premiums.

Because the $2,400 cap and the payment plan apply across all Part D coverage, the smart move during the Oct. 15 – Dec. 7 Annual Enrollment Period is to compare:

• Whether your current drugs are still on the plan's formulary for 2027.
• What tier they're on.
• Which pharmacies are preferred in-network.
• The plan's deductible (up to the $700 maximum in 2027).

You can compare plans that cover your specific medications using the Plan Finder at medicare.gov.

A quick note on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 married filing jointly) based on your 2024 tax return, you may pay an IRMAA surcharge on top of your standard Part B and Part D premiums in 2026. IRMAA isn't a penalty — it's an income-related adjustment. Social Security will notify you if it applies.