Medicare Part D
What the 2027 Medicare Part D Cap Means in Urbandale
URBANDALE, Iowa — If you take prescription drugs and have Medicare, 2027 continues the biggest Part D changes in years. The old "donut hole" is gone, a yearly cap on what you pay out of pocket is in place, and the structure of how your drug costs add up has been simplified.
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Will your prescriptions still be covered in 2027?
Part D plans rewrite their drug lists every year — tiers move, pharmacies change, drugs drop off. One call checks your exact medications against the 2027 plans in your area.
- Every prescription checked, name by name
- Your pharmacy checked for preferred pricing
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Speak to a Licensed Insurance Agent
Click to call 855-729-3240Key takeaways
- In 2027, Part D drug plans have just three phases (deductible, initial coverage, and catastrophic) instead of the old four-phase system with the donut hole.
- No Part D plan can charge a deductible higher than $700 in 2027, though some plans set it lower or at zero for certain drug tiers.
- Once you pay $2,400 out of pocket on covered Part D drugs in 2027, you pay $0 for the rest of the year for those drugs.
- The Medicare Prescription Payment Plan lets anyone with Part D spread their yearly drug costs into monthly bills instead of paying all at once, without paying more overall.
Here's a plain-English guide to how Part D works in 2027, what the key numbers are, and where Urbandale readers can go for help.
The three phases of Part D in 2027
Part D used to have four phases, including the confusing coverage gap known as the donut hole. That gap was eliminated in 2025. As of 2027, according to CMS, there are just three phases every Part D plan follows:
1. Deductible phase. You pay the full negotiated price for your drugs until you meet your plan's deductible. For 2027, no Part D plan can set a deductible higher than $700. Some plans set it lower, and some set it at zero for certain drug tiers. 2. Initial coverage phase. After the deductible, you pay a copay or coinsurance for each prescription, and your plan pays the rest. This continues until your out-of-pocket spending on covered drugs hits the annual cap. 3. Catastrophic phase. Once you reach the out-of-pocket cap, you pay $0 for the rest of the calendar year on covered Part D drugs.
That's it. No more donut hole, no more separate "coverage gap" math.
The $2,400 out-of-pocket cap
The single biggest change for people with high drug costs is the annual out-of-pocket cap. In 2027, once you have spent $2,400 out of your own pocket on covered Part D prescriptions, you will not pay anything more for those drugs for the rest of the year.
A few important notes:
- The cap applies to Part D drugs only. It does not cover drugs given in a doctor's office (those usually fall under Part B).
- Monthly plan premiums do not count toward the $2,400.
- Manufacturer discounts and payments made on your behalf by certain assistance programs may or may not count. Check with your plan.
For someone who takes expensive brand-name or specialty medications, the cap can make yearly costs much more predictable.
Spreading payments out: the Medicare Prescription Payment Plan
Even with the cap, a big drug bill in January can still sting. That's why Medicare offers the Medicare Prescription Payment Plan, sometimes called "M3P" or drug cost smoothing.
If you opt in, you don't pay the pharmacy at the counter. Instead, your Part D plan bills you monthly, spreading your yearly drug costs across the calendar year. You do not pay more overall — you just pay in installments. Anyone with a Part D plan can sign up, but it works best for people with high or uneven drug costs. You can enroll through your plan at any point during the year.
Where Urbandale fits in
Urbandale is in Polk County, where Medicare beneficiaries can choose from a range of stand-alone Part D drug plans as well as Medicare Advantage plans that include Part D coverage. Plan availability, formularies (the list of covered drugs), and pharmacy networks are set at the county level, so two neighbors in Urbandale generally see the same plan options — but a friend across the state line may see different ones.
The rules above — the $700 maximum deductible, the $2,400 cap, the three phases — apply to every Part D plan in the country, no matter which one you pick.
A note on higher-income enrollees (IRMAA)
Most people pay only their plan's premium for Part D. But if your income is above certain thresholds, you'll pay an extra amount called IRMAA (Income-Related Monthly Adjustment Amount) on top of your premium. For 2026, IRMAA surcharges begin for single filers with income above $109,000 (higher for married couples filing jointly). Social Security uses your tax return from two years ago to decide. If your income has dropped since then — for example, because you retired — you can ask for a reconsideration.
Key dates to remember
- Annual Enrollment Period: October 15 – December 7. This is when you can join, switch, or drop a Part D or Medicare Advantage plan for the following year.
- Medicare Advantage Open Enrollment: January 1 – March 31. If you're already in a Medicare Advantage plan, you can switch to another Advantage plan or return to Original Medicare (and pick up a stand-alone Part D plan).
Outside these windows, you generally need a Special Enrollment Period — for example, if you move or lose other drug coverage.
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 Polk County
(MA penetration in Polk 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 in 2025 (three phases now). For 2027 there’s a hard yearly cap of $2,400 on what you pay out of pocket for covered drugs, 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
Q: Does the $2,400 cap mean my plan premium is capped too?
Q: What if my drug isn't on my plan's formulary?
Q: Is the donut hole really gone?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.