Medicare Part D

Derry NH Part D: 2027 Out-of-Pocket Cap

DERRY, N.H. — The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027 for covered prescription drugs in a calendar year. Once you hit that ceiling, your plan picks up 100% of the cost of covered medications for the rest of the year.

A big change is coming to your Part D drug costs

This remains the largest overhaul of Medicare drug coverage in nearly two decades, and Annual Enrollment for 2027 coverage runs October 15 through December 7, 2026. If you or a family member takes expensive medications, this is the time to pay close attention.

What's changing for Part D in 2027

Three things are worth knowing:

• A hard out-of-pocket cap. Before 2025, there was no true limit on what you could spend on covered drugs. The cap is $2,100 in 2026 and $2,400 in 2027; once your out-of-pocket spending on covered Part D drugs reaches that amount, you owe $0 for the rest of the year.
• The "donut hole" is gone. The old coverage gap — the middle stretch where you paid a larger share of drug costs — was eliminated starting in 2025. Part D now has three simple phases: the deductible (up to a maximum of $615 in 2026), the initial coverage phase, and the catastrophic phase where you pay nothing.
• A new way to spread payments across the year. More on that below.

These are program-wide rules set by the Centers for Medicare & Medicaid Services (CMS). They apply to every Part D plan, whether it's a stand-alone drug plan or built into a Medicare Advantage plan.

The Medicare Prescription Payment Plan: paying monthly instead of at the pharmacy

Here's the piece a lot of people in Derry haven't heard about yet. The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying the full amount at the pharmacy counter.

A few important points:

• It's optional and free to join. There's no interest or fee.
• You still owe the same total — up to the cap ($2,100 in 2026, $2,400 in 2027) — but you pay your plan monthly instead of the pharmacy up front.
• It's most useful for people who face a large drug bill early in the year (say, a $600 prescription in January) and would rather smooth that out.
• You sign up through your Part D plan, not through Medicare directly. You can enroll before the plan year starts or any time during the year.

If you rarely fill prescriptions or only take low-cost generics, this program probably won't change much for you. If you take a specialty drug or brand-name medication, it's worth a serious look.

Why this matters during Annual Enrollment

Derry is in Rockingham County, where beneficiaries have a broad mix of stand-alone Part D and Medicare Advantage options to choose from during Annual Enrollment. Plan formularies (the list of drugs each plan covers), pharmacy networks, and cost-sharing tiers still vary from plan to plan — the cap ($2,100 in 2026, $2,400 in 2027) doesn't erase those differences.

That means the smart move this fall is to:

1. Log in to your Medicare account at medicare.gov and run the Plan Finder with your actual medication list. 2. Confirm every drug you take is on the plan's formulary for 2027. 3. Check whether your preferred Derry-area pharmacy is in the plan's preferred network. 4. Look at your Annual Notice of Change (ANOC) — your current plan mailed it in September. It shows what's changing for 2027.

A quick word on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 filing jointly), you'll continue to pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part D premium in 2026. The cap ($2,100 in 2026, $2,400 in 2027) still applies to you — IRMAA is a premium surcharge, not part of your drug spending.