Medicare Part D

Medicare Part D 2027 changes in Gaithersburg, Md.

Gaithersburg, Md. — Starting January 1, 2027, the Medicare Part D out-of-pocket limit for covered prescriptions rises to $2,400 for the year, up from $2,100 in 2026. The change arrives during the Annual Enrollment Period that runs through December 7, 2026.

For older adults in Gaithersburg who have watched pharmacy bills climb, the cap — along with a monthly payment option that spreads costs across the year — could reshape how you plan for 2027. Here is what to know, and what to think about while you still have time to compare plans.

The out-of-pocket cap, in plain English

Once your out-of-pocket spending on covered Part D drugs reaches the annual cap, you pay $0 for the rest of the calendar year on those drugs. The cap is $2,100 in 2026 and $2,400 in 2027, and it resets each January.

That out-of-pocket total includes your deductible and your share of the cost during the initial coverage phase. It does not include your monthly Part D premium, and it does not apply to drugs your plan does not cover. If a medication is not on your plan's formulary, spending on it will not count toward the cap.

Part D plans can charge a deductible of up to $615 in 2026, according to CMS; the maximum deductible is $700 in 2027. After the deductible, you pay a share of your drug costs until you hit the annual out-of-pocket cap, and then coverage kicks in fully for the rest of the year.

Goodbye, donut hole

For years, Medicare drug coverage had a confusing middle phase called the coverage gap, or "donut hole," where beneficiaries suddenly paid a bigger share of their drug costs. That phase was eliminated in 2025 and remains gone in 2027.

Part D now has three phases: 1. Deductible phase — you pay full price (up to the plan's deductible, no more than $615 in 2026 and $700 in 2027). 2. Initial coverage phase — you pay a share of the cost until your out-of-pocket total hits the annual cap ($2,100 in 2026, $2,400 in 2027). 3. Catastrophic phase — you pay $0 for covered drugs the rest of the year.

This is a simpler structure, and it means the surprise mid-year cost spike many people used to face is finished.

The Medicare Prescription Payment Plan

If your drug costs come in big chunks — say, one expensive prescription that eats through the deductible in January — the new Medicare Prescription Payment Plan may help.

It is free and optional. Instead of paying the pharmacy at the counter, you pay Medicare in monthly installments spread across the calendar year. Your total for the year does not change; it is just smoothed out. You can sign up before the plan year starts or any month during the year, but the earlier you enroll, the more months you have to spread costs over.

To decide if it fits you, think about whether cash flow is the pinch point — not the total price. If your prescriptions are inexpensive and steady, this may not help much. If one or two drugs are pricey, it can make budgeting easier.

How to decide during Annual Enrollment

Gaithersburg is in Montgomery County, where beneficiaries can choose from a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Every plan sets its own formulary (the list of covered drugs), pharmacy network, and premium — and those change every year. The 2027 lineup is in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder.

A few things worth checking before December 7:

• Is every drug you take on the plan's 2027 formulary? A drug that was covered in 2026 may not be in 2027.
• What tier is each of your drugs on? Higher tiers generally mean a higher share of the cost.
• Is your pharmacy in the plan's preferred network? This can affect what you pay at the counter.
• Would the payment plan help? If yes, confirm your plan participates (all Part D plans are required to offer it).

You can compare plans side-by-side using the Plan Finder at medicare.gov, or call 1-800-MEDICARE (TTY 1-877-486-2048), available 24/7.

For free, one-on-one help in Maryland, contact the State Health Insurance Assistance Program (SHIP), known locally as SHIP/SMP Maryland, at 1-800-243-3425. Counselors are unbiased and do not sell plans.

A quick note on higher-income beneficiaries

If your 2024 income was above $109,000 as a single filer (or $218,000 filing jointly), you may pay an income-related monthly adjustment amount (IRMAA) on top of your Part D premium in 2026. Social Security notifies you if this applies, and you can appeal if your income has dropped due to a life event like retirement.