Medicare Part D
Jackson, Miss.: 2027 Part D Out-of-Pocket Cap
JACKSON, Miss. — Starting Jan. 1, 2027, Medicare's prescription drug coverage will look different than it did just a couple of years ago. The most important change for people who take expensive medications: once you spend $2,400 out of pocket on covered drugs in a calendar year, you won't pay another penny for them until January.
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Key takeaways
- Starting Jan. 1, 2027, once you pay $2,400 out of pocket for covered drugs in a year, your Part D plan covers 100% of covered drug costs for the rest of that year.
- The old "donut hole" coverage gap is gone, replaced by a three-phase design with a deductible phase, an initial coverage phase, and a catastrophic phase.
- The Prescription Payment Plan (M3P) is a free, optional way to spread out-of-pocket drug costs across monthly bills instead of paying it all at the pharmacy at once.
- The Annual Enrollment Period runs Oct. 15 through Dec. 7, and it's important to review your Annual Notice of Change to check your drug list, pharmacy network, and drug tier before it ends.
For families in Jackson stretching Social Security checks to cover insulin, cancer pills, or heart medicine, that ceiling can bring real peace of mind. But the new rules also come with choices — and a few easy mistakes to avoid.
Here's a plain-language guide to what's changing, and where to get help before the Dec. 7 enrollment deadline.
The Part D cap, explained
Under Medicare Part D program rules, the out-of-pocket cap for covered prescription drugs is $2,100 in 2026 and $2,400 in 2027. Once you hit that number, your Part D plan pays 100% of the cost of your covered drugs for the rest of the calendar year.
A few things worth knowing:
- The cap resets every Jan. 1.
- It applies to Part D drugs — the prescriptions you pick up at the pharmacy. It does not cover drugs administered in a doctor's office (those fall under Part B).
- The $2,100 in 2026 ($2,400 in 2027) counts what you pay in deductibles and copays. Premiums don't count toward it.
- The annual Part D deductible can be no higher than $615 in 2026.
This is a big shift from a few years ago, when there was no yearly limit at all.
The "donut hole" is gone
If you or a loved one has been on Medicare for a while, you may remember the dreaded coverage gap — the "donut hole" — where costs suddenly jumped in the middle of the year.
That's gone. As of 2025, Part D moved to a simpler three-phase design: a deductible phase, an initial coverage phase, and a catastrophic phase where you pay nothing more after hitting the cap. In 2027, that same structure continues with a $2,400 ceiling.
No more surprise price hikes mid-year. What you see in your plan's cost-sharing is what you'll pay, right up to the cap.
The Medicare Prescription Payment Plan
Here's the piece a lot of people miss: even with the cap ($2,100 in 2026, $2,400 in 2027), you could still owe that much in January if your first refill of the year is a pricey specialty drug.
To help, Medicare now offers the Prescription Payment Plan — sometimes called "M3P" or drug cost smoothing. It's free and optional. Instead of paying the pharmacy at the counter, you spread your out-of-pocket drug costs across monthly bills from your plan for the rest of the year.
A few honest points:
- It doesn't lower your total drug costs — it just spreads them out.
- It works best for people with high or unpredictable drug bills early in the year.
- If your prescriptions are cheap and steady, it may not help much and could actually feel like extra paperwork.
- You can sign up any time during the year by contacting your Part D or Medicare Advantage plan.
If you're not sure whether it makes sense for you, that's a great question for your local counselor (more on that below).
What Jackson residents should check during AEP
Jackson is in Hinds County, where Medicare beneficiaries have a range of stand-alone Part D drug plans and Medicare Advantage plans with drug coverage to choose from. The number of options changes every year, and so do the drugs each plan covers (the "formulary").
The Annual Enrollment Period runs Oct. 15 through Dec. 7. This is the window when you can:
- Join a Part D plan for the first time.
- Switch from one Part D plan to another.
- Switch between Original Medicare and Medicare Advantage.
If you already have coverage, don't just auto-renew without looking. Review the Annual Notice of Change your plan mailed you in September. Check whether your prescriptions are still on the formulary, whether the pharmacy you use is still in network, and whether the tier your drug sits on has moved.
There's a second window — the Medicare Advantage Open Enrollment Period, Jan. 1 through March 31 — but it only lets you switch or drop an Advantage plan. It's not a second chance for stand-alone Part D changes.
A quick note on higher-income households
If your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you may pay an IRMAA surcharge on top of your Part D premium in 2026. Social Security notifies you by mail. If your income has dropped due to retirement, divorce, or the death of a spouse, you can appeal.
Mistakes to avoid
- Skipping the ANOC review. A plan that fit you in 2026 may not in 2027.
- Assuming the cap ($2,100 in 2026, $2,400 in 2027) covers everything. It's for Part D drugs only.
- Signing up for the payment plan without doing the math. For some folks, it helps a lot. For others, it just adds a monthly bill.
- Waiting past Dec. 7. Missing the deadline usually means waiting another year.
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.
By the numbers
How people get Medicare in Hinds County
(MA penetration in Hinds County)
MA penetration from CMS enrollment data; Medigap share is an estimate. U.S. average is about 54% Medicare Advantage. These are area-level figures, not plan-specific.
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 on what you pay out of pocket for covered drugs — $2,100 in 2026 and $2,400 in 2027 — 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?
I have Medicare Advantage with drug coverage. Does the cap apply to me?
If I join the Prescription Payment Plan, do I still pay the pharmacy?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.