Medicare Part D
Baltimore Medicare Part D gains a $2,100 drug cost cap
BALTIMORE — Starting January 1, 2027, people with Medicare Part D drug coverage will see the out-of-pocket safety net rise: once your spending on covered prescriptions hits $2,400 for the year, you pay nothing more for the rest of the calendar year. The cap continues a structural change that began in 2025, and it lands right as fall Open Enrollment (Oct. 15 – Dec. 7) helps Baltimore-area residents pick their 2027 coverage.
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Key takeaways
- Starting January 1, 2027, Medicare Part D out-of-pocket drug spending is capped at $2,400 for the year, and after that you pay nothing more for covered prescriptions for the rest of the year.
- The old "donut hole" coverage gap is gone, so the plan now works in three phases: a deductible (no more than $700 in 2027), then 25% coinsurance, then nothing more once you hit the $2,400 cap.
- The optional Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments instead of paying it all at the pharmacy, which can help if big costs hit early in the year.
- Open Enrollment runs October 15 through December 7, and it's a good time to check that your medications are still covered, since coverage and premiums can vary by plan even though the $2,100 cap applies to all Part D and Medicare Advantage drug plans.
Here's what's actually changing, and what it means for your prescriptions.
The $2,100 cap is the headline change
For 2027, Medicare caps what you personally spend on covered Part D drugs at $2,400 for the year, according to CMS. That figure is up from the $2,100 cap in 2026 — it's tied to inflation and will keep adjusting each year.
A few important details:
- The cap applies to covered Part D drugs. If a medication isn't on your plan's formulary, those costs don't count toward the cap.
- Your Part D deductible (up to $700 in 2027) counts toward the cap.
- Premiums do not count toward the cap.
- Once you hit $2,400, you pay nothing more for covered drugs through Dec. 31.
For anyone who takes expensive brand-name or specialty medications, this is the change that matters most.
The coverage gap ("donut hole") is gone
If you've been on Medicare for a while, you probably remember the "donut hole" — a middle phase where your share of drug costs jumped after you and your plan spent a certain amount. That phase was eliminated in 2025 and remains gone in 2027.
Part D now has just three phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (no more than $700 in 2027). 2. Initial coverage phase — you generally pay 25% of the cost of covered drugs. 3. Catastrophic phase — once your out-of-pocket spending hits $2,400, you pay nothing more for covered drugs the rest of the year.
Simpler math, and a hard ceiling on what you'll spend.
The Medicare Prescription Payment Plan spreads costs across the year
Even a $2,400 cap can feel steep if it hits in January or February. That's where the Medicare Prescription Payment Plan comes in — an optional program, run through your Part D plan, that lets you spread your out-of-pocket drug costs across monthly payments instead of paying at the pharmacy counter.
How it works:
- You still owe the same total amount for the year — nothing is added or discounted.
- Instead of paying the pharmacy, your plan bills you monthly.
- You can opt in before the plan year starts or at any point during the year.
- You can opt out later if it's not helping.
It tends to make the most sense for people with high drug costs early in the year, or anyone who'd rather budget in even monthly chunks. If your out-of-pocket drug spending is low and predictable, you may not need it. Ask your Part D plan directly to enroll.
What this means during Open Enrollment
Baltimore is in Baltimore city, where — like everywhere else in the country — Medicare's Annual Enrollment Period runs Oct. 15 through Dec. 7. Any Part D or Medicare Advantage plan you choose takes effect Jan. 1, 2027. In Baltimore city, 23 Medicare Advantage plans from 8 carriers are offered for 2027, compared with 31 plans from 10 carriers in 2026.
The 2027 rules apply to every Part D plan and every Medicare Advantage plan with drug coverage — the $2,400 cap isn't optional and isn't a feature one plan offers over another. What still varies plan-to-plan:
- Which drugs are on the formulary
- Tier placement (which affects your 25% share)
- Whether your pharmacy is preferred
- Monthly premium and deductible amount
Before you renew automatically, it's worth checking that your specific medications are still covered by your plan in 2027. The Plan Finder at medicare.gov lets you enter your drugs and compare.
A quick note on higher-income beneficiaries
If your income is above $109,000 (single filer) or $218,000 (joint) based on your 2024 tax return, you'll pay an IRMAA surcharge on top of your Part D premium in 2026. Social Security will notify you if it applies. It doesn't change the $2,100 cap — just your monthly premium.
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.
Prescription coverage
How Medicare Part D works in 2027
The old coverage gap (“donut hole”) is eliminated as of 2025 (three phases now). There’s now a hard yearly cap of $2,400 in 2027 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
Does the $2,100 cap include my monthly premium?
If I enroll in the Prescription Payment Plan, will I pay less overall?
What if my drug isn't on my plan's formulary?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.