Medicare Part D

Duluth Part D in 2027: how the $2,400 cap and monthly payment plan work

DULUTH, Ga. — For the millions of people who lean on Medicare Part D to help pay for prescriptions, the yearly out-of-pocket ceiling on covered drugs rises from $2,100 in 2026 to $2,400 in 2027. Once you hit that number, you pay nothing more for covered prescriptions until January.

Medicare Part DDuluth, GA

That cap, along with the end of the old "donut hole" and the option to spread drug costs across the year, is reshaping how Duluth residents should think about their Part D coverage this Annual Enrollment Period, which runs through Dec. 7.

What the $2,400 cap actually means

Starting Jan. 1, 2027, no one enrolled in a Medicare Part D plan will pay more than $2,400 out of pocket for covered prescription drugs during the year. That limit is set by Medicare and applies whether your drug coverage comes through a standalone Part D plan or is built into a Medicare Advantage plan.

The cap only counts what you spend on drugs your plan covers. Medications your plan doesn't cover, and Part D premiums, do not count toward the cap. Once you hit it, you move into the catastrophic phase and pay nothing for covered drugs the rest of the year.

The Part D maximum deductible is $615 for 2026 and $700 for 2027, though many plans set it lower.

Goodbye to the donut hole

The "coverage gap," known for years as the donut hole, is officially gone. Part D now has three phases instead of four:

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

The old fourth phase, where people sometimes got stuck paying a bigger share mid-year, no longer exists. This is the change that will feel most different to anyone who has ever fallen into the gap.

The new monthly payment plan

Even with the cap, some people hit big pharmacy bills early in the year — for example, if a costly drug is filled in January. To help with that, Medicare now offers the Medicare Prescription Payment Plan.

Here's how it works:

• It's free and voluntary.
• Instead of paying the full amount at the pharmacy, your Part D plan bills you monthly for what you owe.
• Your yearly total doesn't change — you still pay up to the cap ($2,400 in 2027) — but the cost is spread across the calendar year.
• You can sign up before the plan year begins or any month during the year through your Part D plan.

This option can help if a large drug cost would strain your budget in a single month. It won't help if your drug spending is low and steady; in that case, paying at the pharmacy may be simpler.

What Duluth residents should check before Dec. 7

Duluth is in Gwinnett County, where Medicare beneficiaries can choose from a range of standalone Part D plans and Medicare Advantage plans that include drug coverage. The 2027 lineup for your area is listed in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder. Every plan is required to follow the yearly out-of-pocket cap, but plans still differ in premiums, deductibles, formularies (the list of covered drugs), pharmacy networks, and tier structures.

A few things worth reviewing before the Dec. 7 deadline:

• Your Annual Notice of Change. Your current plan mailed this in the fall. It spells out what's changing for 2027.
• Your drug list. Make sure every medication you take is still on your plan's formulary and in a reasonable tier.
• Your pharmacy. Preferred pharmacies can affect your costs, even under the new cap.
• Whether you'd benefit from smoothing. If you take a high-cost drug, ask about the payment plan.

If you miss Dec. 7, people already in a Medicare Advantage plan get another window — the Medicare Advantage Open Enrollment Period from Jan. 1 through March 31 — to switch Advantage plans or return to Original Medicare.

A note on higher incomes

Most people pay only their plan's premium for Part D. But if your income is above $109,000 as a single filer (or $218,000 filing jointly) in 2026, an Income-Related Monthly Adjustment Amount (IRMAA) is added to your Part D and Part B premiums. Social Security uses your tax return from two years earlier to make that call.