Medicare Part D

$2,400 Part D Out-of-Pocket Cap in Florence, KY 2027

If you take prescription drugs and have Medicare, 2027 continues some of the friendliest changes Part D has seen in years. The way you pay for medicine at the pharmacy is simpler, and there is a hard ceiling on what you can spend out of pocket in a calendar year.

Here in Florence, Kentucky, that matters. Florence is in Boone County, where — like everywhere else in the country — Part D plans follow the same federal rules for the deductible, the phases of coverage, and the annual out-of-pocket cap. Below is a plain-language walk-through of how those rules work in 2027.

The $2,400 out-of-pocket cap

This is the headline change. In 2027, once your out-of-pocket spending on covered Part D drugs reaches $2,400 in a calendar year, you pay nothing for covered prescriptions for the rest of the year. That cap is set by Medicare and applies to every Part D plan, whether it is a stand-alone drug plan or the drug coverage built into a Medicare Advantage plan.

A few things to know:

• Only what you actually spend on covered drugs counts toward the $2,400. Premiums do not count.
• The cap resets every January 1.
• The cap only applies to drugs on your plan's formulary (its list of covered drugs).

The deductible: up to $700 in 2027

Medicare sets a maximum Part D deductible each year. The maximum is $615 in 2026 and $700 in 2027. A plan can choose a lower deductible, or none at all, but it cannot charge more than the yearly maximum.

The deductible is what you pay out of pocket before your plan starts sharing the cost. Some plans apply it to all drugs; some apply it only to certain tiers. Your plan's documents will spell this out.

The three phases of Part D in 2027

Before 2025, Part D had four phases, including the coverage gap most people called the "donut hole." That gap is gone. In 2027, there are three phases, and you move through them in order:

1. Deductible phase. You pay the full negotiated price for your drugs until you have spent up to your plan's deductible (no more than $700 in 2027).

2. Initial coverage phase. You and your plan share the cost. You typically pay a copay or a percentage (coinsurance) for each prescription. This continues until your total out-of-pocket spending on covered drugs reaches $2,400.

3. Catastrophic phase. Once you hit $2,400, you pay nothing for covered drugs for the rest of the calendar year.

That is the whole map. No more surprise jump in prices halfway through the year.

The Medicare Prescription Payment Plan

Even with the cap, hitting $2,400 early in the year can sting if it lands all at once. That is why Medicare offers the Medicare Prescription Payment Plan, sometimes called "M3P" or drug-cost smoothing.

If you opt in, instead of paying the pharmacy directly, your Part D plan bills you monthly for your share of drug costs, spread across the remaining months of the year. It does not lower what you owe, and it does not add fees or interest — it just changes the timing. You can sign up through your Part D plan.

What this looks like around Florence

Florence sits in Boone County, and every Medicare-eligible resident of the county has access to stand-alone Part D drug plans as well as Medicare Advantage plans that include drug coverage. The specific plans, formularies, and pharmacy networks vary, but the federal rules above — the $700 maximum deductible in 2027, the three phases, and the $2,400 cap — apply to all of them. For the 2027 lineup, check each plan's ANOC and the Plan Finder at Medicare.gov.

To compare plans available in Boone County, use the Plan Finder at medicare.gov, where you can enter your ZIP code and your drug list to see how each plan would handle your specific medications.

Important dates to remember

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

One more note on income: if your income is above $109,000 as a single filer (or $218,000 filing jointly) in 2026, you may pay an income-related surcharge called IRMAA on top of your Part D premium. Social Security notifies you if this applies.