Medicare Part D
Part D's New $2,100 Cap: What Parsippany Should Know
PARSIPPANY-TROY HILLS, N.J. — Starting January 1, 2027, Medicare Part D's hard ceiling on what you pay out of pocket for covered prescription drugs rises to $2,400 for the calendar year, up from $2,100 in 2026. And the old "donut hole" that tripped up so many seniors? It's already gone.
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Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, Medicare Part D has a hard out-of-pocket cap of $2,400 per calendar year for covered drugs, up from $2,100 in 2026.
- The old "donut hole" coverage gap is gone, so Part D now works in three phases: deductible (up to $700 in 2027), initial coverage (you pay 25%), and catastrophic (you pay $0 after hitting $2,400 in 2027).
- The Medicare Prescription Payment Plan is a free, optional program that lets you spread your Part D out-of-pocket costs into monthly installments instead of paying it all at once, though it doesn't reduce your total drug costs.
- These 2027 rules (the $2,400 cap, $700 deductible limit, and payment plan option) are program-wide and apply the same way no matter which Part D or Medicare Advantage drug plan you choose, though plans still differ on formulary, pharmacy network, and premiums.
Here's what that means for people on Medicare in Parsippany-Troy Hills as the Annual Enrollment Period (October 15 – December 7, 2026) approaches and 2027 coverage begins.
The $2,100 out-of-pocket cap, in plain English
Under the rules from CMS, once you've spent $2,400 out of pocket on covered Part D drugs in 2027, you pay $0 for the rest of the calendar year on those covered prescriptions. That figure rose from the $2,100 cap in 2026 and is set by Medicare, so it applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan with drug coverage.
This is a real shift. Before 2025, there was no yearly limit at all on Part D spending. People with cancer treatments, insulin, or specialty drugs could face bills of $5,000, $10,000, or more per year. That ceiling is now $2,100.
The Part D deductible is also capped in 2027 — plans can't charge more than $700 before cost-sharing kicks in. Many plans set it lower.
Goodbye, "donut hole"
If you've been on Medicare for a while, you probably remember the coverage gap — the frustrating middle stage where your drug costs suddenly jumped. That phase was eliminated in 2025 and remains gone in 2027.
Part D now has three simple phases:
1. Deductible phase — you pay full negotiated price until you meet the plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay 25% of the cost of covered drugs. 3. Catastrophic phase — once your out-of-pocket total hits $2,400 in 2027, you pay nothing more for covered drugs that year.
No more mid-year surprise. No more math about which "stage" you're in.
The Medicare Prescription Payment Plan
Hitting $2,400 in January or February is still a real bill. That's where the Medicare Prescription Payment Plan comes in. It's a free, optional program that lets you spread your Part D out-of-pocket costs across the calendar year in monthly installments instead of paying a large amount at the pharmacy counter.
You still owe the same total — this doesn't lower your drug costs — but the timing is smoother. You sign up through your Part D plan (not at the pharmacy), and you can enroll any time during the year. It tends to help most if you take an expensive drug early in the year or have predictably high costs.
What this looks like in Parsippany-Troy Hills
Parsippany-Troy Hills is in Morris County, where Medicare beneficiaries choose from a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Because plan availability is set at the county level by CMS, every Morris County resident — Parsippany, Denville, Morristown — sees the same menu of options. The 2027 lineup is detailed in each plan's ANOC and on Medicare.gov's Plan Finder.
The 2027 rules above apply the same way across all of them: the $2,400 cap, the $700 maximum deductible, and access to the payment plan are program-wide standards, not plan perks. What varies between plans is which drugs they cover (their formulary), which pharmacies are in network, and monthly premiums.
If your medications changed this year, or if your plan sent an Annual Notice of Change letter in September, it's worth reviewing before December 7.
A note on higher-income households
If your 2024 income was above $109,000 as a single filer (or $218,000 for a couple filing jointly), you'll pay an IRMAA surcharge on top of your Part B and Part D premiums in 2026. This is set by the IRS and Social Security based on your tax return from two years ago. It doesn't change the $2,100 cap.
Key dates to keep on the fridge
- October 15 – December 7, 2026: Annual Enrollment Period. Change Part D or Medicare Advantage plans for 2027.
- January 1, 2027: New coverage and the $2,400 cap take effect.
- January 1 – March 31, 2027: Medicare Advantage Open Enrollment. If you're in a Medicare Advantage plan, you get one chance to switch to another MA plan or return to Original Medicare with a stand-alone Part D plan.
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 Morris County
(MA penetration in Morris 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 of $2,400 in 2027 on what you pay out of pocket for covered drugs, 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 $2,400 cap include my monthly premium?
What if my drug isn't on my plan's list?
Do I have to sign up for the payment plan?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.