Medicare Part D

Part D in 2027: the $700 deductible, the $2,400 cap, and the three phases explained

# Part D in 2027: the $700 deductible, the $2,400 cap, and the three phases…

MILFORD, Conn. — If you take prescriptions and you have Medicare, the way your drug coverage will work in 2027 is worth a few minutes of your time. The rules changed meaningfully in 2025, and the numbers move again for 2027. Knowing how Part D is built — the deductible, the phases, and the yearly cap — can help you plan your refills and avoid surprises at the pharmacy counter.

Here is a plain-language walk-through for Milford readers.

What Part D actually is

Part D is the part of Medicare that helps pay for prescription drugs you pick up at a pharmacy or get by mail order. It is sold by private insurance companies that follow rules set by Medicare. You can get it two ways: as a stand-alone drug plan added to Original Medicare, or built into a Medicare Advantage plan. Milford is in New Haven County, where both options are offered by several carriers.

Every Part D plan has its own list of covered drugs (called a formulary) and its own pharmacy network. That is why two people on the same street can pay very different amounts for the same medicine — the plan design, not just the drug, drives the cost.

The three phases in 2027

Since 2025, Part D has three phases instead of four. The coverage gap — the old "donut hole" — is gone. Here is how the year now flows:

1. Deductible phase. You pay the full plan-negotiated price for your drugs until you hit the deductible. The Part D maximum deductible is $615 in 2026 and $700 in 2027, but plans can set it lower or waive it for some drug tiers.

2. Initial coverage phase. Once you have met the deductible, you and your plan share the cost. You typically pay a copay or a percentage (coinsurance), and the plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the yearly cap.

3. Catastrophic phase. Once your out-of-pocket costs on covered drugs hit the yearly cap — $2,100 in 2026 and $2,400 in 2027 — you pay nothing for the rest of the calendar year on covered Part D drugs. This is the hard cap, and it is the biggest change most people will feel.

The counter resets every January 1.

The Part D cap, in real life

The cap ($2,100 in 2026, $2,400 in 2027) counts what you spend out of pocket on drugs your plan covers. Monthly premiums do not count toward it. Drugs your plan does not cover do not count toward it either — which is one reason it is worth checking that your medicines are on your plan's formulary before the year begins.

For someone on a costly specialty drug, the cap can be reached early in the year. For someone on a few generics, it may never come into play. Either way, you cannot be charged more than the yearly cap — $2,100 in 2026 and $2,400 in 2027 — for covered Part D drugs.

Smoothing costs across the year

If you would rather not face a big pharmacy bill in January or February, Medicare now offers the Medicare Prescription Payment Plan. You can opt in through your Part D plan, and instead of paying the pharmacy at pickup, you get a monthly bill from the plan that spreads your yearly drug costs across the remaining months of the year.

It does not lower what you owe — it just changes when you pay. For people with high early-year drug costs, that can make budgeting easier. You can sign up at any time during the year by contacting your plan.

A few things that trip people up

• Higher-income surcharge (IRMAA). If your income is above $109,000 as a single filer in 2026 (higher for couples), Medicare adds a surcharge to your Part D premium. It is billed separately by Medicare, not by your plan.
• Formulary changes. Plans can move drugs between tiers each year. A medicine that was a low copay in 2026 may sit on a different tier in 2027.
• Enrollment windows. The Annual Enrollment Period runs October 15 through December 7 each year. If you have Medicare Advantage, there is also an Open Enrollment Period from January 1 through March 31 to make one change.
• Late enrollment penalty. If you go without creditable drug coverage after you first become eligible, a permanent penalty can be added to your Part D premium later.

Where to get personal help

Medicare rules are national, but choosing coverage is personal. Two neighbors in Milford can have very different best-fit options depending on their drugs, their doctors, and their budgets.

• Medicare.gov has the official Plan Finder, where you can enter your medicines and compare plans available in New Haven County.
• 1-800-MEDICARE (1-800-633-4227) is open 24/7.
• Connecticut's SHIP — called CHOICES — offers free, unbiased counseling from trained volunteers who do not sell insurance.