Medicare Part D

Rockville, MD: Part D cap & donut hole in 2027

ROCKVILLE, Md. — Starting January 1, 2027, the way you pay for prescription drugs under Medicare continues to work under rules that took effect in 2025 and 2026. The yearly cap on out-of-pocket drug costs rises to $2,400, the old "donut hole" remains gone, and a payment plan can spread your drug bills across the year. If you have Medicare in Montgomery County, here is what to know before the Annual Enrollment Period closes on December 7.

What the Part D cap actually means

Once your out-of-pocket spending on covered Part D drugs hits the annual cap — $2,100 in 2026 and $2,400 in 2027 — you pay nothing more for the rest of the calendar year for covered prescriptions. That cap applies whether your drug coverage comes through a stand-alone Part D plan or through a Medicare Advantage plan that includes drug coverage.

The Part D deductible can be no higher than $615 in 2026, and no higher than $700 in 2027. After the deductible, you're in the initial coverage phase, where you pay a share of the cost until you reach the yearly cap and move into the catastrophic phase. These are program-level rules from CMS — the exact numbers you pay along the way still depend on the plan you choose.

The end of the "donut hole"

For years, the coverage gap — nicknamed the donut hole — was one of the most confusing parts of Medicare. You'd have solid coverage, then suddenly hit a phase where you paid a bigger share, then move into catastrophic coverage.

That middle phase is gone. Part D now has three phases: deductible, initial coverage, and catastrophic. If you've been on Medicare for a while and remember bracing for a mid-year jump in drug costs, that mental math no longer applies.

The Medicare Prescription Payment Plan

Even with the cap ($2,100 in 2026, $2,400 in 2027), hitting a big bill at the pharmacy in January or February can strain a budget. That's where the Medicare Prescription Payment Plan comes in. It's a free, optional program you can join through your drug plan.

Instead of paying the full cost at the counter, your plan bills you monthly. Your total for the year doesn't change — you'd still pay the same amount by December — but the timing is smoother. It can be especially helpful if you take one or two high-cost drugs early in the year. You can opt in before the plan year starts or any time during the year by contacting your Part D or Medicare Advantage plan.

How to decide during Annual Enrollment

Rockville is in Montgomery County, where Marylanders have a wide range of stand-alone Part D and Medicare Advantage plans to compare. The right one depends on your specific medications, your pharmacy, and your budget — not on which plan is "biggest" or most advertised.

A few things worth checking before December 7:

• Your drug list. Make sure each of your prescriptions is on the plan's formulary for 2027. Formularies change every year.
• Your pharmacy. Confirm your preferred pharmacy is in the plan's network at the preferred tier.
• Total yearly cost. Look at premium, deductible, and expected copays together — not just one number.
• The payment plan option. If your drug costs tend to hit hard in one month, ask whether monthly smoothing makes sense for you.

The Medicare Plan Finder at medicare.gov lets you enter your drugs and ZIP code to compare plans side by side.

A note on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 filing jointly) in 2026, you'll pay an Income-Related Monthly Adjustment Amount, or IRMAA, on top of your Part B and Part D premiums. IRMAA is based on your tax return from two years earlier. If your income has dropped due to a life event like retirement, you can ask Social Security to reconsider.

Where to get personal help

For free, unbiased help in Maryland, contact the State Health Insurance Assistance Program (SHIP), known locally as SHIP/SMP through the Maryland Department of Aging. You can also call 1-800-MEDICARE (1-800-633-4227), available 24/7, or visit medicare.gov.