Medicare Part D
Medicare's 2027 Drug Cap: Covington, Ky.
COVINGTON, Ky. — Starting Jan. 1, 2027, Medicare Part D will cap what enrollees pay out of pocket for covered prescription drugs at $2,400 for the year, up from $2,100 in 2026. It's the next step in a phased overhaul that already erased the old "donut hole" in 2025, and it's a key change Covington-area retirees will weigh this Annual Enrollment Period, which runs Oct. 15 through Dec. 7.
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Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, Medicare Part D will cap out-of-pocket costs for covered prescription drugs at $2,400 for the year, and this cap resets every January 1.
- Part D drug coverage now works in three phases—deductible, initial coverage, and catastrophic—instead of the old four-phase system, since the "donut hole" gap was eliminated in 2025 and stays gone in 2027.
- In 2027, no Part D plan can charge a deductible higher than $700, and once you reach the $2,400 out-of-pocket cap, you pay nothing for the rest of the year on covered drugs.
- A free, optional Medicare Prescription Payment Plan lets you spread your drug costs into monthly installments instead of paying large amounts at the pharmacy, and you can sign up before the plan year starts or during any month by contacting your Part D plan.
Covington seniors get a new safety net on prescription costs
If you've ever hit the pharmacy counter and been shocked by a four-figure bill for a single specialty medicine, this is the rule that changes that math.
How the new out-of-pocket cap actually works
Under Part D program rules set by the Centers for Medicare & Medicaid Services (CMS), your drug plan now runs in three phases instead of four:
1. Deductible phase. You pay the full negotiated price for your drugs until you meet your plan's deductible. In 2027, no Part D plan can set a deductible higher than $700. 2. Initial coverage phase. You pay a copay or coinsurance while the plan pays the rest. 3. Catastrophic phase. Once your out-of-pocket spending on covered drugs reaches $2,400, you pay nothing for the rest of the calendar year on covered Part D drugs.
That $2,400 counter resets every Jan. 1. Premiums don't count toward it. Drugs your plan doesn't cover don't count toward it either — which is why checking your plan's formulary still matters.
The coverage gap is gone
If you've been on Medicare for a while, you may remember the "donut hole" — a stretch where you suddenly paid a much larger share of your drug costs mid-year. That gap was eliminated in 2025 and remains gone in 2027. There are now just three phases, and once you hit the cap, you're done paying for the year on covered prescriptions.
The Medicare Prescription Payment Plan: spreading the cost
Even with a $2,400 ceiling, some people hit big bills early in the year — especially if one expensive medication pushes them near the cap in January or February.
That's where the Medicare Prescription Payment Plan comes in. 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 owe the same total; you just pay your plan monthly rather than the pharmacy up front.
You can opt in before the plan year starts or any month during the year by contacting your Part D plan. It tends to help most if you have high drug costs concentrated early in the year. It may not help — and could feel like extra paperwork — if your drug costs are low or spread evenly.
What this means for choosing coverage in Covington
Covington is in Kenton County, where Medicare beneficiaries choose Part D coverage either through a stand-alone prescription drug plan paired with Original Medicare or through a Medicare Advantage plan that includes drug coverage. The number of plans available in Kenton County changes each year; the 2027 lineup is listed in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder once you enter your ZIP code.
A few things worth checking during Open Enrollment (Oct. 15 – Dec. 7):
- Your drug list. Make sure each medication you take is on the plan's formulary and note its tier.
- Your pharmacy. Preferred vs. standard pharmacy status can change your cost.
- The deductible. Plans can charge up to $700 in 2027, but some charge less.
- IRMAA. If your 2024 income was above $109,000 (single) or $218,000 (joint), you'll pay an income-related surcharge on top of your Part D premium in 2026. That's set by Social Security, not your plan.
Key dates to circle
- Oct. 15 – Dec. 7, 2026: Annual Enrollment Period. Changes take effect Jan. 1, 2027.
- Jan. 1, 2027: $2,400 out-of-pocket cap and $700 maximum deductible take effect.
- Jan. 1 – Mar. 31, 2027: Medicare Advantage Open Enrollment. If you're in a Medicare Advantage plan, you get one chance to switch to another MA plan or return to Original Medicare (with a stand-alone Part D plan).
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 Kenton County
(MA penetration in Kenton 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). There's now a hard yearly cap of $2,400 on what you pay out of pocket for covered drugs 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 $2,400 cap include my monthly premium?
I take just one generic. Does any of this matter to me?
If I sign up for the payment plan, do I save money?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.