Medicare Part D
Ames Medicare drug costs in 2027: how the out-of-pocket ceiling and monthly payment option work
AMES, Iowa — Starting Jan. 1, 2027, no one with a Medicare Part D drug plan will pay more than $2,400 out of pocket for covered prescriptions in a calendar year. The out-of-pocket ceiling that took effect in 2026 rises for 2027 — and it continues to come paired with the option to spread those costs across the year in monthly installments.
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Will your prescriptions still be covered in 2027?
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Key takeaways
- In 2027, out-of-pocket spending on covered Part D drugs is capped at $2,400 for the year, and the coverage gap remains gone.
- The Part D deductible can be no higher than $700 in 2027, though many plans set it lower.
- The Medicare Prescription Payment Plan lets you spread your drug costs into monthly bills instead of paying at the pharmacy counter.
- Review your plan's 2027 formulary and pharmacy network before Dec. 7 — the cap protects you, but your plan choice still matters.
If you take expensive drugs, or if you have ever hit the old "donut hole" and been startled by the bill, this is the year to understand what changed, what didn't, and what mistakes to avoid during the Oct. 15 – Dec. 7 Annual Enrollment Period.
What the $2,100 cap actually covers
The $2,400 figure is a hard ceiling on what you personally spend at the pharmacy for drugs your Part D plan covers. Once your out-of-pocket spending on covered drugs reaches $2,400 in 2027, you pay $0 for the rest of the year on those medications.
A few important limits:
- The cap only applies to covered drugs — medicines on your plan's formulary, filled at an in-network pharmacy.
- Monthly premiums do not count toward the $2,100.
- Drugs your plan does not cover, and Part B drugs (usually given in a doctor's office), are handled separately.
This cap applies whether you get Part D through a stand-alone drug plan or as part of a Medicare Advantage plan that includes drug coverage. Ames is in Story County, where residents can compare both types during open enrollment.
The coverage gap is really gone
For years, Part D had four phases, and the third — the "donut hole" — is where many people got hit with big bills. That gap was eliminated in 2025. In 2027, Part D has just three phases:
1. Deductible phase — you pay the full negotiated price until you meet the plan's deductible (no more than $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance for each prescription. 3. Catastrophic phase — once your out-of-pocket spending hits $2,400, you pay nothing more for covered drugs that year.
There is no longer a middle phase where your share of the cost suddenly jumps. That is the change most likely to matter for anyone on brand-name or specialty medications.
The Medicare Prescription Payment Plan
Even with a $2,400 ceiling, hitting that ceiling in January or February can still sting. That is what the Medicare Prescription Payment Plan is designed to address.
Here is how it works:
- You opt in through your Part D plan (it is voluntary and free to join).
- Instead of paying the pharmacy at pickup, your plan bills you monthly for your share.
- Your total yearly cost does not change — you are simply spreading it out.
The program is most useful for people who face a large bill early in the year, since those costs get divided across the remaining months. It is less useful for people whose drug costs are small and steady. You can join at any point during the year, but joining early spreads the cost over more months.
Common mistakes to avoid this fall
A few slip-ups tend to trip people up during the Oct. 15 – Dec. 7 enrollment window:
- Assuming the cap means all plans are equal. Formularies, tier placement and pharmacy networks still vary. A drug you take could be on one plan's formulary and not another's.
- Skipping the Annual Notice of Change. Your current plan sent one this fall. It tells you what is changing for 2027 — premium, deductible, drug tiers, preferred pharmacies.
- Waiting until January to think about the payment plan. You can enroll then, but you will have fewer months to spread the balance.
- Forgetting about IRMAA. Higher-income beneficiaries pay an income-related surcharge on Part D and Part B premiums. In 2026, IRMAA begins above $109,000 in income for a single filer.
Where to get unbiased help in Ames
For personalized questions, three free resources are worth knowing:
- Medicare.gov — the official Plan Finder lets you enter your prescriptions and compare 2027 plans available in Story County.
- 1-800-MEDICARE — available 24/7.
- Iowa SHIIP (Senior Health Insurance Information Program) — Iowa's State Health Insurance Assistance Program offers free, one-on-one counseling. Counselors do not sell plans.
Story County residents can reach SHIIP through the Iowa Insurance Division to schedule a session, in person or by phone.
By the numbers
Medicare Part B premium, 2006–2026
The standard monthly Part B premium has climbed from $88.50 in 2006 to $202.90 in 2026. Hover any point for that year’s premium.
Source: CMS. Standard premium shown; in some hold-harmless years many existing enrollees paid less. Confirm at Medicare.gov.
By the numbers
How people get Medicare in Story County
(MA penetration in Story County)
MA penetration from CMS enrollment data; Medigap share is an estimate. U.S. average is about 54% Medicare Advantage. These are area-level figures, not plan-specific.
Prescription coverage
How Medicare Part D works in 2027
The old coverage gap (“donut hole”) was eliminated as of 2025 (three phases now). The yearly cap on what you pay out of pocket for covered drugs is $2,100 in 2026 and $2,400 in 2027, and you can spread those costs across the year with the Medicare Prescription Payment Plan.
Try it
How the 2026 Part D drug cap works
Slide to your estimated yearly prescription costs and see how the new $2,100 out-of-pocket cap protects you. This illustrates the standard Part D benefit; your plan may structure costs differently.
Once your out-of-pocket spending on covered drugs reaches $2,100, you pay nothing more for the rest of 2026. Confirm details at Medicare.gov.
Explore
When can you enroll? An interactive year
Enrollment windows are federal and the same nationwide. Confirm your personal dates at Medicare.gov or 1-800-MEDICARE.
Good to know
Frequently asked questions
Does the $2,100 cap include my monthly Part D premium?
If I already hit the cap, do I still need to fill prescriptions at an in-network pharmacy?
Can I sign up for the Medicare Prescription Payment Plan mid-year?
What if my plan drops a drug I take for 2027?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.
Also for Ames
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This page was last updated: October 6, 2026.