Medicare Part D

Southfield Medicare Part D: Donut Hole Ends Jan. 1, 2026

SOUTHFIELD, Mich. — Starting Jan. 1, 2027, the way Medicare pays for prescription drugs continues to look different than it did a few years ago. The yearly cap on what enrollees pay out of pocket for covered Part D drugs moves to $2,400, the old "donut hole" coverage gap remains gone, and a payment plan option lets people spread their drug costs across the calendar year. For Oakland County residents comparing coverage during this fall's Annual Enrollment Period, these are details worth understanding before Dec. 7.

What the out-of-pocket cap actually covers

The out-of-pocket limit applies to what you personally pay for covered prescription drugs under Part D. The cap is $2,100 in 2026 and $2,400 in 2027. Once your spending on covered drugs hits that number, you pay nothing for the rest of the calendar year on those prescriptions. The cap resets each January.

A few important details from CMS:

• The cap applies to drugs covered by your Part D plan's formulary. Drugs not on the formulary don't count toward it.
• Your monthly plan premium does not count toward the cap.
• The maximum Part D deductible any plan can charge is $615 in 2026 and $700 in 2027, though many plans set it lower.

This is a meaningful shift. Just a few years ago, there was no annual ceiling on Part D out-of-pocket costs, and people taking expensive specialty drugs could spend many thousands of dollars a year.

The coverage gap is officially gone

For years, Part D worked in four phases, including a stretch in the middle — the "donut hole" — where enrollees paid a larger share of their drug costs until catastrophic coverage kicked in. That gap was closed as of 2025.

In 2027, Part D still has just three phases:

1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance for each prescription until your out-of-pocket total reaches $2,400. 3. Catastrophic phase — you pay nothing for covered drugs for the rest of the year.

If you remember dreading the donut hole every summer, that worry is off the table.

How the Medicare Prescription Payment Plan works

Even with the cap, some people could still face a large bill in a single month — for example, if an expensive medication is filled in January before other costs have built up. The Medicare Prescription Payment Plan, sometimes called "M3P," addresses that.

Here's the idea: instead of paying the pharmacy each time you pick up a prescription, you opt in with your Part D plan, and the plan bills you monthly for your share of drug costs, spread across the remaining months of the year. Your total for the year doesn't change — it's simply smoothed out.

A few things to know:

• It's optional. You have to sign up with your drug plan.
• There's no interest or fee for participating.
• It may help most if you have high drug costs early in the year.
• If your drug costs are low and steady, it may not change much for you.

You can enroll before the plan year starts or at any point during the year. Contact your Part D plan directly to opt in.

How to decide during Annual Enrollment

Southfield is in Oakland County, where Medicare beneficiaries typically have a wide range of stand-alone Part D plans and Medicare Advantage plans with drug coverage to choose from. The Annual Enrollment Period runs Oct. 15 through Dec. 7, and any changes you make take effect Jan. 1.

A few practical steps:

• Make a list of your current medications, including doses. You'll need this to compare formularies.
• Log in to medicare.gov's Plan Finder and enter your drugs and preferred pharmacies. The tool estimates your total yearly cost under each plan.
• Check whether your pharmacy is preferred under a plan — the same drug can cost different amounts at different pharmacies within the same plan's network.
• Think about IRMAA if you're a higher earner. In 2026, income-related surcharges on Part B and Part D premiums begin above $109,000 for single filers (higher for joint).
• Don't forget Medicare Advantage Open Enrollment (Jan. 1 – March 31), when Advantage enrollees can make one change if their choice isn't working out.

If you'd rather talk to a human, Michigan's MMAP (Medicare/Medicaid Assistance Program) is the state's SHIP. Counselors give free, unbiased help and don't sell anything.

Where to get official answers

For the most current information on Part D rules, the out-of-pocket cap, and the payment plan:

• Medicare.gov — for plan comparisons and program details.
• 1-800-MEDICARE (1-800-633-4227) — 24/7 help.
• MMAP (Michigan SHIP) — free local counseling at 1-800-803-7174.