Medicare Part D
Erlanger Medicare Part D in 2027: the $700 deductible, $2,400 cap and three phases
ERLANGER, Ky. — If you take prescription drugs and rely on Medicare, the rules that shape what you pay at the pharmacy counter are changing again in 2027. Part D — the part of Medicare that covers prescription drugs — will have a higher yearly out-of-pocket cap, a set maximum deductible, and the same three-phase structure that replaced the old "donut hole" in 2025.
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Key takeaways
- In 2027, Part D has a maximum deductible of $700 and a yearly out-of-pocket cap of $2,400, according to CMS.
- The old coverage gap ("donut hole") is gone; Part D now has three phases: deductible, initial coverage, and catastrophic.
- You can spread drug costs across the year using the Medicare Prescription Payment Plan, which is optional and free to join.
- The Annual Enrollment Period runs Oct. 15–Dec. 7, and Medicare Advantage Open Enrollment runs Jan. 1–March 31.
Here is what Erlanger residents should understand before the Annual Enrollment Period closes Dec. 7.
How Part D fits into Medicare
Part D is the prescription drug piece of Medicare. You can get it two ways: as a stand-alone drug plan added to Original Medicare, or built into a Medicare Advantage plan that includes drug coverage. Erlanger is in Kenton County, where both types of plans are sold by private insurers under contract with Medicare.
Every Part D plan has its own list of covered drugs (called a formulary) and its own pharmacy network. But the overall structure — the deductible, the phases, and the yearly cap — is set by Medicare, so it works the same way no matter which plan you choose.
The 2027 deductible: up to $700
Before your plan starts sharing the cost of most drugs, you may have to pay a deductible. For 2027, Medicare sets the maximum Part D deductible at $700. A plan can charge less than that, or nothing at all, but no plan can charge more.
Some plans also apply the deductible only to certain drug tiers. That means a lower-tier generic might be covered right away, while a brand-name drug counts toward the deductible first. Your plan's "Evidence of Coverage" spells out exactly how it works.
The three phases, in plain English
Since 2025, Part D has had three payment phases instead of four. Here is the order you move through in a calendar year:
1. Deductible phase. You pay the 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 a percentage of the cost, and your plan pays the rest. You stay in this phase until your out-of-pocket spending on covered drugs hits the yearly cap. 3. Catastrophic phase. Once you reach the cap, you pay $0 for the rest of the year on covered Part D drugs.
The old "donut hole" — the awkward middle phase where costs jumped — no longer exists.
The $2,400 out-of-pocket cap
This is a change many people will feel in 2027. The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027 for covered drugs. Once your spending reaches that number, you pay nothing more for covered prescriptions until the calendar flips to January.
Only your actual out-of-pocket spending on covered drugs counts toward the cap. Monthly plan premiums do not count. Drugs your plan does not cover do not count either, which is one more reason to check that your medications are on the formulary.
The Medicare Prescription Payment Plan
If a $2,100 in 2026 ($2,400 in 2027) bill in a single month sounds hard to manage, there is a newer option that can help. The Medicare Prescription Payment Plan lets you spread your Part D drug costs across the rest of the calendar year in monthly installments, instead of paying the full amount at the pharmacy.
It is free to join, does not change what you owe overall, and any Part D enrollee can opt in. You can ask your plan directly or read more at medicare.gov.
What higher earners should know
Most people pay only their plan's premium. But if your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you may owe an extra amount called IRMAA on top of your Part D premium in 2026. Medicare will notify you if this applies to you.
Deadlines to keep in mind
- Oct. 15 – Dec. 7: Annual Enrollment Period. You can join, switch, or drop a Part D or Medicare Advantage plan. Changes take effect Jan. 1.
- Jan. 1 – March 31: Medicare Advantage Open Enrollment. If you are already in an MA plan, you can switch to another MA plan or return to Original Medicare (and add a stand-alone Part D plan).
If your current plan is changing its formulary, pharmacy network, or costs for 2027, you should have received an Annual Notice of Change in the mail. It is worth reading before Dec. 7.
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). The yearly out-of-pocket cap on 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 apply to every drug I take?
Do I still have to worry about the "donut hole" in 2027?
Can I sign up for the Medicare Prescription Payment Plan anytime?
What if I have Original Medicare and no drug plan?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.
Also for Erlanger
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This page was last updated: October 6, 2026.