Medicare Part D

Part D's 2027 Cap Arrives Jan. 1 for Rialto

RIALTO, Calif. — Starting Jan. 1, 2027, the way Medicare pays for prescription drugs is changing again — and for people who take expensive medications, the change could be one of the biggest in the program's history. A new $2,400 yearly cap on what you pay out of pocket for Part D drugs takes effect, replacing the $2,100 cap that applied in 2026. Here is what that means, in plain English, before the Annual Enrollment Period closes on Dec. 7.

The Part D out-of-pocket cap, explained

In 2027, once you have paid $2,400 out of pocket for covered prescription drugs under Part D, you pay nothing for the rest of the calendar year on those covered drugs. This cap applies whether your drug coverage comes through a standalone Part D plan or a Medicare Advantage plan that includes drug coverage.

A few things worth knowing:

• The cap counts what you pay — your deductible and copays or coinsurance on covered drugs. Monthly premiums do not count toward it.
• The cap resets each January.
• Manufacturer discounts on brand-name drugs also help you reach the cap under the current program design.

The Part D deductible can be no higher than $700 in 2027, though many plans set it lower.

The "donut hole" is gone — for good

If you have been on Medicare for a while, you probably remember the coverage gap, nicknamed the donut hole. That was the confusing middle stretch where your drug costs could suddenly jump after you and your plan hit a spending threshold.

That phase was eliminated in 2025. Part D now has just three phases:

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

No more surprise middle stage. It is a cleaner design that is easier to plan around.

The Medicare Prescription Payment Plan

Even with the $2,400 cap, some people hit big drug bills early in the year — for example, if a specialty medication costs $800 in January alone. That is where the Medicare Prescription Payment Plan comes in.

This is a free, optional program. Instead of paying the pharmacy at pickup, you can spread your out-of-pocket drug costs into monthly payments across the calendar year. The total you pay does not change — it just gets smoothed out.

A few points to understand:

• You have to opt in. Every Part D and Medicare Advantage drug plan must offer it, but it is not automatic.
• It only covers Part D drug costs — not premiums, and not Part B drugs given in a clinic.
• If you sign up mid-year, remaining costs are spread over the months left.

For someone facing a big one-time drug bill, this can make cash flow much more manageable. For someone with small, steady drug costs, it may not be worth the paperwork. There is no one right answer — it depends on your prescriptions and budget.

Why this matters right now in Rialto

Rialto is in San Bernardino County, where residents typically have a wide selection of standalone Part D plans and Medicare Advantage plans that include drug coverage. For 2027, the county has 75 Medicare Advantage plans from 17 carriers, with 14 new plans, 17 not returning, and 20 renamed. Plan details — formularies, pharmacy networks, and costs — can change every year, so the plan that worked well for you in 2026 may look different in 2027.

The Annual Enrollment Period runs Oct. 15 through Dec. 7. That is your window to switch Part D or Medicare Advantage plans for coverage that starts Jan. 1. If you are already in a Medicare Advantage plan, there is a second window — the Medicare Advantage Open Enrollment Period, Jan. 1 through March 31 — when you can make a one-time change.

Before you pick, log in to Medicare.gov and use the Plan Finder with your current drug list. That single step tends to reveal more than any brochure.

A quick word on higher incomes (IRMAA)

If your income is above $109,000 (single filer) or $218,000 (married filing jointly) based on your 2024 tax return, you may pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your standard Part B and Part D premiums in 2026. IRMAA does not affect the cap ($2,100 in 2026, $2,400 in 2027) itself, but it does affect what you pay monthly. If your income has recently dropped due to retirement or another life event, you can ask Social Security to reconsider.