Medicare Part D

The Villages Part D Phases Guide for 2027

THE VILLAGES, Fla. — If you take prescription drugs and have Medicare, 2027 brings another adjustment to the hard cap on what you pay out of pocket at the pharmacy. For retirees here in The Villages, that means a more predictable year — once you understand the three phases your drug coverage now moves through.

Here's a plain-English guide to how Part D works in 2027, using the program-level rules from CMS.

The Part D out-of-pocket cap

The headline change continues in 2027: once your out-of-pocket spending on covered prescription drugs reaches the annual cap, you pay $0 for the rest of the calendar year on drugs covered by your Part D plan. The cap is $2,100 in 2026 and $2,400 in 2027. This applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.

The cap resets each January 1. It's a program-wide rule set by CMS, so it applies no matter which plan you're enrolled in.

The deductible: up to $700 in 2027

Before your plan starts sharing costs, you may have to meet a deductible. Medicare sets the maximum Part D deductible at $615 for 2026 and $700 for 2027. Plans are allowed to charge less than that — some charge nothing at all — but no Part D plan can charge more.

Some plans also apply the deductible only to certain drug tiers (often the more expensive ones), so it's worth checking how your specific plan handles it.

The three phases in 2027

Since 2025, Part D has had three phases instead of four. The old coverage gap — the "donut hole" — is gone. Here's what's left:

1. Deductible phase. You pay the full negotiated price for your drugs until you meet your plan's deductible (up to $700 in 2027).

2. Initial coverage phase. You and your plan share the cost. You typically pay a copay or coinsurance for each prescription, and the plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the annual cap ($2,400 in 2027).

3. Catastrophic phase. Once you reach the annual cap, you pay nothing for covered drugs for the rest of the year.

That's it — three phases, one cap.

Spreading costs with the Payment Plan

If a high-cost drug would push you toward the annual cap early in the year, a single pharmacy trip could be expensive up front — even though spending is capped annually. The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly bills instead of paying it all at the counter.

It's free to sign up, it doesn't change what you pay overall, and it's available through your Part D plan. Not everyone benefits from it — if your drug costs are low and steady, monthly billing may not help — but for people facing a big prescription bill, it can smooth the year out.

What this looks like in The Villages

The Villages sits in Sumter County (with parts extending into Lake and Marion counties), and Medicare plan availability is set at the county level. That means the specific stand-alone Part D plans and Medicare Advantage plans with drug coverage offered to you depend on which county your address falls in.

The program rules above — the annual out-of-pocket cap, the maximum deductible, the three phases — apply the same way everywhere. What varies by plan is the premium, the exact deductible (up to the yearly ceiling), the formulary (list of covered drugs), and the pharmacy network. The 2027 plan lineup is in each plan's ANOC and on Medicare.gov's Plan Finder.

When you can make changes

Two windows matter most:

• Annual Enrollment Period: October 15 – December 7. You can join, switch, or drop a Part D plan or a Medicare Advantage plan. Changes take effect January 1.
• Medicare Advantage Open Enrollment: January 1 – March 31. If you're already in a Medicare Advantage plan, you can switch to another one or return to Original Medicare (and pick up a stand-alone Part D plan).

A quick note on higher incomes: if your modified adjusted gross income is above $109,000 as a single filer in 2026 (based on your 2024 tax return), you'll pay an income-related surcharge — IRMAA — on top of your Part D premium. Medicare will notify you if this applies.