Medicare Part D

Medicare's $2,400 Drug Cap in 2027: What St. Louis Should Know

ST. LOUIS — If you take prescription drugs and have Medicare, the Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. That figure, set by the Centers for Medicare & Medicaid Services (CMS), is what you'll pay at the pharmacy counter before covered Part D drugs cost you nothing more for the rest of the calendar year.

For St. Louis residents comparing coverage during the Annual Enrollment Period (Oct. 15 – Dec. 7, 2026), understanding how this cap actually works — and how a monthly payment option fits in — can help you avoid the most common mistakes people make when they pick a drug plan.

The $2,400 cap, in plain English

Starting Jan. 1, 2027, no one with a Medicare Part D plan (whether a stand-alone drug plan or the drug portion of a Medicare Advantage plan) will pay more than $2,400 out of pocket for covered prescriptions in a single year.

That cap counts what you personally pay — your deductible and your share of the cost after that. It does not count your monthly premium.

A few things to remember:

• The cap resets every January 1.
• Only covered drugs on your plan's formulary count toward it. If a drug isn't on your plan's list, what you pay for it generally does not apply.
• The maximum Part D deductible a plan can charge in 2026 is $615. Plans can charge less, but not more.

The "donut hole" is gone — here's what replaced it

For years, Medicare drug coverage had a confusing "coverage gap" (the donut hole) in the middle of the year, where your costs would suddenly jump. That's over.

As of 2025, Part D 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 until your out-of-pocket spending hits the annual cap. 3. Catastrophic phase — once you reach $2,400 in 2027, you pay nothing for covered drugs the rest of the year.

That's it. No more gap. No more sticker shock in the summer months.

The Medicare Prescription Payment Plan: spread the cost

Even with the annual cap, a big bill early in the year can still sting. If you fill an expensive prescription in January, you could owe hundreds of dollars at the counter before you've had a chance to plan for it.

That's where the Medicare Prescription Payment Plan comes in. It's a free, optional program (sometimes called "M3P") that lets you spread your out-of-pocket drug costs across monthly payments instead of paying the pharmacy all at once.

How it works:

• You still enroll in a Part D or Medicare Advantage drug plan the normal way.
• You opt in to the payment plan through that plan — either before the year starts or during the year.
• The plan pays the pharmacy. You get a monthly bill from the plan.
• You never pay more in total than you would have without the program — it just changes when you pay.

It won't help everyone. If your drug costs are low and steady, it may just add a bill to keep track of. But if you're facing a large cost early in the year, it can smooth things out.

Mistakes to avoid this enrollment season

A few things trip up St. Louis Medicare beneficiaries every fall:

• Skipping the yearly review. Formularies, pharmacy networks, and tiers change every year. A plan that worked in 2026 may treat your medications differently in 2027. Check your plan's Annual Notice of Change (ANOC) and the 2027 lineup on Medicare.gov's Plan Finder.
• Assuming the cap eliminates all drug costs. You can still owe up to $2,400 in 2027 before catastrophic coverage kicks in.
• Forgetting about IRMAA. Higher-income beneficiaries pay an income-related surcharge on Part B and Part D. In 2026, IRMAA begins above $109,000 in income for a single filer (higher thresholds apply to joint filers). This is based on your tax return from two years earlier.
• Missing the deadline. Dec. 7, 2026 is the last day to change your Part D or Medicare Advantage plan for coverage starting Jan. 1, 2027. There's also a Medicare Advantage Open Enrollment Period (Jan. 1 – March 31, 2027) for people already in Medicare Advantage to make one change.
• Not checking every drug you take. Use the Plan Finder tool at Medicare.gov and enter each prescription, dose, and preferred pharmacy.

What St. Louis residents can do locally

St. Louis is in the City of St. Louis (an independent city that functions as its own county for Medicare purposes), and plan availability is set at the county level. That means the number and type of Part D and Medicare Advantage plans available to you depends on the county you live in, not the city name itself. If you live in St. Louis County, St. Charles County, or Jefferson County, your available plans may look different.

For an unbiased look at what's offered where you live, Missouri's State Health Insurance Assistance Program (SHIP) — called CLAIM in Missouri — provides free, one-on-one Medicare counseling. Counselors do not sell insurance and are not paid by plans.