Medicare Part D

Laurel Medicare drug costs in 2027: the ceiling explained

LAUREL, Md. — Starting Jan. 1, 2027, no one with Medicare Part D drug coverage will pay more than $2,400 out of pocket for covered prescriptions in a calendar year. It builds on the biggest change to how Medicare pays for drugs in years, and it lands right as the Annual Enrollment Period (Oct. 15 – Dec. 7) is giving Laurel residents a chance to review their coverage for next year.

Medicare Part DLaurel, MD

What the out-of-pocket cap actually means

The most you can be charged out of pocket for prescription drugs covered by your Part D plan is $2,100 in 2026 and $2,400 in 2027. That figure comes directly from CMS as part of the Part D redesign under the Inflation Reduction Act.

Once your out-of-pocket spending on covered drugs reaches the annual cap, you enter what Medicare calls the catastrophic phase — and you pay $0 for the rest of that year on your covered prescriptions. The cap resets each January.

A few notes to keep in mind:

• The cap applies to covered drugs. If a medication is not on your plan's formulary, what you spend on it does not count toward the cap.
• Premiums do not count toward the cap.
• The cap applies whether your drug coverage comes through a stand-alone Part D plan or is built into a Medicare Advantage plan.

The coverage gap ("donut hole") is gone

If you have been on Medicare for a while, you remember the coverage gap — that stretch where you suddenly paid a much larger share of your drug costs after hitting an early spending threshold. Starting in 2025, that phase was eliminated, and it stays gone in 2027.

Part D now has three phases instead of four:

1. Deductible phase. You pay the full negotiated price until you meet your plan's deductible. The maximum Part D deductible any plan can charge is $615 in 2026 and $700 in 2027, though plans can set it lower. 2. Initial coverage phase. You pay a share of the cost (a copay or coinsurance) and the plan pays the rest. 3. Catastrophic phase. Once your out-of-pocket spending hits the annual cap, you pay nothing for covered drugs for the rest of the year.

That is it. No more middle phase where costs jumped unexpectedly.

The Medicare Prescription Payment Plan

Even with a yearly ceiling, hitting that cap early in the year can still hurt if it lands in one or two big pharmacy trips. That is where the Medicare Prescription Payment Plan comes in.

This is a free, optional program. Instead of paying the pharmacy the full cost-share when you pick up your prescription, you pay $0 at the counter. Your Part D plan then bills you monthly for what you would have owed, spread across the remaining months of the year.

A few things to know:

• It does not save you money — you still owe the same total. It just smooths the timing.
• You have to opt in. Contact your Part D or Medicare Advantage drug plan to enroll.
• You can sign up before the plan year starts or at any point during the year, though signing up earlier spreads costs over more months.
• If you miss a monthly bill, you can be removed from the program, so be sure the payment schedule fits your budget.

The program tends to be most helpful for people who take expensive specialty drugs and would otherwise pay hundreds of dollars in a single pharmacy visit.

What Laurel residents should check during enrollment

Laurel is in Prince George's County, where Medicare beneficiaries can choose among a range of stand-alone Part D plans and Medicare Advantage plans with drug coverage. Availability is set at the county level by CMS, not by ZIP code.

Between now and Dec. 7, it is worth taking a few minutes to:

• Read the Annual Notice of Change your current plan mailed you. Formularies, pharmacy networks and cost-sharing tiers can change from year to year.
• Check that each of your prescriptions is still on the plan's 2027 formulary.
• Confirm your preferred pharmacy is still in the plan's preferred network.
• If your income is above $109,000 (single filer), remember that IRMAA surcharges may apply to your Part B and Part D premiums.

If you want to change plans, you can do it during AEP (Oct. 15 – Dec. 7). If you are on Medicare Advantage, you get one more chance to switch or drop it during the Medicare Advantage Open Enrollment Period, Jan. 1 – March 31.