Medicare Part D

Part D's $2,400 Drug Cap Explained for Bloomington

# A plain-language guide to Medicare prescription drug…

BLOOMINGTON, Ind. — If you take prescription drugs and you're on Medicare, 2027 continues one of the biggest shifts to Part D in years. There's a firm ceiling on what you'll pay out of pocket for covered drugs, the old "donut hole" is gone, and the way you move through the year is simpler than it used to be.

Here's a plain-language walk-through of how Part D works in 2027, written for readers here in Bloomington and the rest of Monroe County.

The headline number: a $2,100 out-of-pocket cap

In 2027, once your out-of-pocket spending on covered Part D drugs reaches $2,400, you're done paying for the rest of the calendar year. Medicare calls this the annual out-of-pocket cap, and it applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.

That $2,400 counts what you actually pay — deductibles and copays or coinsurance on covered drugs. It does not include your monthly plan premium.

For anyone managing an expensive medication, this cap is the single most important number to know. (Source: CMS — Medicare Part D program rules, medicare.gov.)

The deductible: up to $700 in 2027

Part D plans can charge a deductible before cost-sharing kicks in. In 2027, the maximum allowed deductible is $700. Plans can set theirs lower, and some don't charge one at all, but no plan can charge more than that.

The deductible resets on January 1 each year, so if you fill a prescription in early January, you may see a higher bill until you've met it.

The three phases of Part D in 2027

Since 2025, the coverage gap — the old "donut hole" — has been eliminated. That leaves three phases you move through during the year:

1. Deductible phase. You pay the full negotiated price of your covered drugs until you meet your plan's deductible (up to $700 in 2027). If your plan has no deductible, you skip this phase.

2. Initial coverage phase. After the deductible, you pay a copay or coinsurance for each prescription while your plan pays the rest. You stay in this phase until your out-of-pocket spending hits $2,400.

3. Catastrophic phase. Once you reach $2,100 in 2026 ($2,400 in 2027) out of pocket, you pay $0 for the rest of the year on your covered Part D drugs.

That's it — three phases, one ceiling, and a clean reset each January.

Spreading costs over the year: the Payment Plan option

If you have a month with a big drug bill, 2027 continues to offer another tool: the Medicare Prescription Payment Plan. It's a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly installments, instead of paying it all at the pharmacy counter.

You still pay the same total amount over the year — the cap is $2,400 in 2027 — but the monthly billing can help if a large prescription would otherwise land all at once. You can sign up through your Part D or Medicare Advantage drug plan.

Higher-income surcharge (IRMAA)

Most people pay only their plan's premium. But if your income is above a certain level, you'll pay an extra amount called IRMAA on top of your Part D premium, paid directly to Medicare. In 2026, IRMAA surcharges start for single filers with income above $109,000 (with higher thresholds for married couples filing jointly). Social Security uses your tax return from two years earlier to decide whether IRMAA applies.

What this looks like locally

Bloomington is in Monroe County, where Medicare beneficiaries can choose between Original Medicare paired with a stand-alone Part D drug plan, or a Medicare Advantage plan that bundles drug coverage in. Both routes follow the same 2027 rules — the same $700 maximum deductible, the same $2,400 cap, and the same three phases. The 2027 plan lineup is in each plan's ANOC and on Medicare.gov's Plan Finder.

Formularies (the lists of covered drugs), pharmacy networks, and copays vary from plan to plan, so the plan that fits a neighbor's prescriptions may not be the best fit for yours. Medicare's Plan Finder at medicare.gov lets you enter your drugs and compare covered options in Monroe County side by side.

Key dates to keep in mind

• October 15 – December 7, 2026: Medicare Annual Enrollment Period. This is when you can join, switch, or drop a Part D or Medicare Advantage plan for 2027.
• January 1 – March 31, 2027: Medicare Advantage Open Enrollment. If you're already in a Medicare Advantage plan, you get one chance to switch to another Advantage plan or return to Original Medicare (and add a stand-alone Part D plan).