Medicare Part D
$2,400 Part D Cap in 2027 for San Diego, CA
SAN DIEGO — Starting January 1, 2027, Medicare's Part D prescription drug benefit continues to look different than it did just a few years ago. The out-of-pocket cap on covered drugs rises to $2,400 for the year, the old "donut hole" coverage gap stays gone, and a payment plan lets you spread your drug costs across the months instead of paying big bills all at once.
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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
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Key takeaways
- Starting January 1, 2027, the yearly out-of-pocket cap for covered Part D drugs is $2,400, after which you pay nothing more for those drugs the rest of the year.
- The old Part D "donut hole" coverage gap is gone, leaving just three phases: deductible (up to $700 in 2027), initial coverage, and catastrophic.
- An optional Medicare Prescription Payment Plan lets you spread your yearly drug costs into monthly bills instead of paying large amounts at the pharmacy all at once.
- The Annual Enrollment Period runs October 15 through December 7, giving people a chance to review or change their Part D or Medicare Advantage drug coverage for the next year.
San Diego seniors get a firmer ceiling on drug costs in 2027
If you take expensive medications — or worry you might one day — these changes matter. Here's a plain-English guide to what's new, who it helps, and how to think through your options during this fall's Annual Enrollment Period.
What the $2,400 out-of-pocket cap actually means
Under Part D rules set by the Centers for Medicare & Medicaid Services (CMS), once your out-of-pocket spending on covered prescription drugs hits $2,400 in 2027, you pay $0 for the rest of the calendar year on those covered drugs. The counter resets each January.
A few things worth knowing:
- The cap applies to covered Part D drugs. If a medication isn't on your plan's formulary, those costs generally don't count.
- Premiums do not count toward the $2,400.
- The maximum Part D deductible is $615 in 2026 and $700 in 2027, though individual plans may set a lower deductible.
- The cap follows you across the year, but it doesn't carry over — you start fresh each January.
This is a big change from just a few years ago, when there was no annual limit on what a person could spend out of pocket on Part D drugs.
The coverage gap ("donut hole") is gone
For years, Part D had four phases, including a confusing middle stretch called the coverage gap. As of 2025, that gap was eliminated. In 2027, Part D has three phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance for each prescription. 3. Catastrophic phase — once your out-of-pocket spending reaches $2,400, you pay nothing more for covered drugs the rest of the year.
Simpler math, fewer surprises.
The Medicare Prescription Payment Plan: smoothing, not saving
Even with the $2,400 cap, one large refill in January can sting. That's where the Medicare Prescription Payment Plan comes in.
This is an optional program, offered through your Part D or Medicare Advantage plan with drug coverage. Instead of paying the pharmacy directly at pickup, you can choose to spread your annual out-of-pocket drug costs into monthly bills from your plan.
Important points:
- It does not reduce what you owe. It only changes when you pay it.
- You still can't spend more than $2,400 out of pocket for the year on covered drugs.
- You have to opt in — it's not automatic. You can sign up before the plan year starts or any time during the year.
- If you don't take expensive drugs, this program may not do much for you. It's most useful for people facing a large bill early in the year.
How to decide during Open Enrollment
The Annual Enrollment Period runs October 15 through December 7, and it's when most people can review and change their Part D or Medicare Advantage drug coverage for the following year. There's also a Medicare Advantage Open Enrollment Period from January 1 through March 31 for people already in a Medicare Advantage plan.
San Diego is in San Diego County, where 65 Medicare Advantage plans from 15 carriers are available for 2027. Because plans, formularies, and pharmacy networks can change every year, the smart move is to compare — even if you like your current plan.
A few questions worth asking:
- Are all my current medications on the plan's formulary for 2027?
- What tier is each of my drugs on, and what's the cost-sharing?
- Is my preferred pharmacy (or mail-order option) in the plan's network?
- If I have a higher income, will IRMAA surcharges apply? In 2026, IRMAA begins above $109,000 for a single filer (based on your tax return from two years earlier).
- Would the Prescription Payment Plan help me manage a large refill early in the year?
The official Medicare Plan Finder at medicare.gov lets you enter your specific medications and pharmacy to compare covered plans side by side.
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 San Diego County
(MA penetration in San Diego 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”) was eliminated as of 2025 (three phases now). There’s 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 Part D premium?
If I sign up for the Prescription Payment Plan, will I actually pay less overall?
I didn't hit the cap in 2026. Does anything roll over to 2027?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.