Medicare Part D
$2,100 Part D Cap Starts January 2026 for Liberty
LIBERTY, Mo. — Since January 1, 2026, the way you pay for prescription drugs under Medicare has changed in a big way. For the first time, there is a hard ceiling on what you spend out of pocket for covered medications at the pharmacy counter — $2,100 in 2026, rising to $2,400 in 2027. Once you hit that number, you're done paying for covered drugs for the rest of the year.
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Key takeaways
- Medicare Part D caps yearly out-of-pocket costs for covered drugs at $2,100 in 2026 and $2,400 in 2027, and once you hit that amount you pay nothing more for covered drugs the rest of the year.
- The old "donut hole" coverage gap ended in 2025, leaving three simple phases: deductible (up to $615 in 2026 and up to $700 in 2027), initial coverage (usually 25% of drug costs), and catastrophic (no more costs after the yearly cap).
- The optional, free Medicare Prescription Payment Plan lets you spread out-of-pocket drug costs across the year instead of paying them all at once, but you must opt in through your drug plan since it isn't automatic.
- The Annual Enrollment Period runs October 15 through December 7, and higher earners (above $109,000 for single filers in 2026) may pay an added IRMAA surcharge on their premium, though the $2,100 cap still applies to their out-of-pocket drug costs.
For people who take costly medications, this is one of the most significant Medicare updates in years. Here's how it works, what happened to the old "donut hole," and how a new monthly payment option might help you plan ahead.
The $2,100 cap, in plain English
In 2027, Medicare Part D — the part of Medicare that helps pay for prescription drugs — will cap your out-of-pocket spending at $2,400 (up from $2,100 in 2026). That cap applies to covered drugs on your plan's formulary (its list of covered medicines).
A few things worth knowing:
- The cap only counts what you pay out of pocket for covered drugs — deductibles, copays, and coinsurance.
- It does not include your monthly Part D premium.
- It applies whether your drug coverage comes through a stand-alone Part D plan or is built into a Medicare Advantage plan.
- The Part D deductible can be no more than $615 in 2026 and no more than $700 in 2027, according to CMS.
Once you reach the yearly cap in out-of-pocket costs for covered drugs ($2,100 in 2026 and $2,400 in 2027), you pay $0 for the rest of the plan year.
The "donut hole" is gone
If you've been on Medicare for a while, you probably remember the coverage gap — nicknamed the "donut hole" — where your share of drug costs jumped after you hit a certain spending level, then dropped again once you hit "catastrophic" coverage.
That gap ended in 2025. Medicare Part D now has three simple phases:
1. Deductible phase — you pay full negotiated price until the deductible is met (up to $615 in 2026; up to $700 in 2027). 2. Initial coverage phase — you pay a share (usually 25%) of the cost of covered drugs. 3. Catastrophic phase — once your out-of-pocket spending hits the yearly cap ($2,100 in 2026, $2,400 in 2027), you pay nothing more for covered drugs the rest of the year.
No more surprise cost swings mid-year. What you pay is more predictable from January through December.
The Medicare Prescription Payment Plan
Even with the cap, hitting $2,100 or $2,400 in January or February can be a real problem if your prescriptions are expensive up front. That's where the Medicare Prescription Payment Plan comes in.
This is a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year instead of paying them all at the pharmacy counter. Here's the idea:
- You still get your medications at the pharmacy — but you pay $0 there.
- Your Part D plan bills you monthly for what you owe.
- Your total for the year won't be more than it would have been anyway; it's just spread out.
It doesn't lower your drug costs — it smooths them. If you're someone who might hit the cap early in the year, or if a large copay in January would strain your budget, it's worth a look. You have to opt in through your drug plan; it isn't automatic.
What Liberty-area readers should watch during AEP
Liberty is in Clay County, where Medicare beneficiaries choose from a mix of stand-alone Part D drug plans and Medicare Advantage plans that include drug coverage. Availability is set at the county level by CMS, so your options in Liberty are the same as elsewhere in Clay County.
The Annual Enrollment Period runs October 15 through December 7. That's the window to:
- Compare your current plan's 2027 formulary to the drugs you actually take.
- Check whether your pharmacy is still in the plan's preferred network.
- Decide whether the Prescription Payment Plan option makes sense for you.
If you're in a Medicare Advantage plan, you also have the Medicare Advantage Open Enrollment Period from January 1 to March 31 to switch to a different Advantage plan or return to Original Medicare.
A quick word on higher-income surcharges
If your income is above certain thresholds, you may pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part D premium. For 2026, the IRMAA surcharge starts above $109,000 in income for a single filer (and higher for joint filers). Social Security uses your tax return from two years ago to determine this.
The yearly out-of-pocket cap still applies to you — IRMAA affects your premium, not your out-of-pocket drug costs.
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 Clay County
(MA penetration in Clay 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”) was eliminated as of 2025 (three phases now). There's 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 drugs my plan doesn't cover?
If I sign up for the Prescription Payment Plan, will I pay less overall?
What happens if I hit the $2,100 cap in, say, June?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.