Medicare Part D

Medicare's Part D Drug Cap in Fountain, CO

FOUNTAIN, Colo. — Starting Jan. 1, 2026, Medicare's prescription drug program crosses a threshold it has never crossed before: no one with Part D coverage will pay more than $2,100 out of pocket for covered drugs in a calendar year. For families in Fountain who have watched pharmacy bills climb year after year, this is one of the biggest shifts in Medicare since Part D began.

The change builds on a rule that took effect in 2025 — the end of the old "donut hole" — and the Annual Enrollment Period (Oct. 15 – Dec. 7) is the window to review your drug coverage for 2027.

What the $2,100 cap actually means

Once your out-of-pocket spending on covered Part D drugs hits $2,100 in 2026, you pay $0 for the rest of the calendar year for those drugs. The cap resets each January.

A few important details to keep in mind:

• The cap applies to what you pay for covered drugs — deductibles and copays or coinsurance count toward it.
• Monthly premiums do not count toward the cap.
• Drugs that aren't on your plan's formulary (its covered list) don't count either.
• The maximum Part D deductible any plan can charge is $615 in 2026 and $700 in 2027. Plans can set a lower deductible, but not higher.

The cap works the same whether your drug coverage comes through a stand-alone Part D plan or through a Medicare Advantage plan that includes drug coverage.

Goodbye, donut hole

For years, Part D had four phases: deductible, initial coverage, coverage gap ("donut hole"), and catastrophic. The gap was the stage where many people suddenly paid a bigger share of the cost — and it caught a lot of retirees off guard.

As of 2025, that gap is gone. 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 until your out-of-pocket total reaches the annual cap ($2,400 in 2027). 3. Catastrophic — you pay $0 for covered drugs the rest of the year.

Simpler math, and a firm ceiling.

The Medicare Prescription Payment Plan

Hitting the cap is good news, but $2,100 in a single year is still a real amount of money — especially if most of it lands in January and February because of a high-cost prescription.

That's what the new Medicare Prescription Payment Plan is designed to smooth out. It's a free, optional program that lets you pay your share of drug costs to your plan in monthly installments across the calendar year, instead of paying the pharmacy in one lump at pickup.

A few things to know:

• You still owe the same total; you just spread it out.
• You have to opt in — it isn't automatic.
• You can sign up before the year starts, or any month during the year.
• It tends to help most if you have high drug costs early in the year. If your drug costs are low and steady, it may not change much for you.

You enroll through your Part D or Medicare Advantage drug plan, not through Medicare directly.

How this affects your 2027 decision

Fountain is in El Paso County, where residents typically have a wide selection of stand-alone Part D plans and Medicare Advantage plans with drug coverage to choose from. The specific number and mix change each year, so it's worth a fresh look during Annual Enrollment rather than assuming last year's plan is still the right fit.

A practical way to compare coverage for 2027:

• Make a current list of your prescriptions, doses, and preferred pharmacies.
• Use the Plan Finder at medicare.gov to see how each plan's formulary and pharmacy network handle your specific drugs.
• Look at the plan's deductible and cost-sharing tiers, not just the premium.
• Ask whether the plan offers the Medicare Prescription Payment Plan and how to enroll if you want it.

Higher-income enrollees should also remember IRMAA — an income-related surcharge that begins above $109,000 for a single filer in 2026 (higher for joint filers). It's based on your tax return from two years earlier.

Key dates to remember

• Oct. 15 – Dec. 7, 2026: Medicare Annual Enrollment Period. Changes take effect Jan. 1, 2027.
• Jan. 1, 2027: Updated Part D cap ($2,400) and deductible maximum ($700) take effect.
• Jan. 1 – March 31, 2027: Medicare Advantage Open Enrollment Period, if you're already in a Medicare Advantage plan and want to switch or return to Original Medicare.