Medicare Part D
Medicare Part D Phases in Union City, NJ 2027
UNION CITY, N.J. — If you take prescription drugs and rely on Medicare, 2027 brings a change worth understanding before you fill your next prescription. Medicare Part D — the part of Medicare that helps pay for prescription drugs — now works in three phases, with a yearly cap on what you pay out of pocket.
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Key takeaways
- The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once you reach it, you pay $0 for covered prescriptions for the rest of the calendar year.
- Part D now works in three phases—deductible, initial coverage, and catastrophic—since the "donut hole" coverage gap was eliminated in 2025.
- The maximum Part D deductible is $615 in 2026 and $700 in 2027, though some plans charge less or nothing.
- Higher-income enrollees pay an extra IRMAA amount directly to Medicare, which in 2026 starts for single filers with income above $109,000 based on 2024 tax returns.
Here's a plain-language walk-through of how Part D works, what the numbers mean, and where to go for help.
The big headline: a yearly out-of-pocket cap
The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once your out-of-pocket spending on covered drugs reaches that amount, you pay $0 for covered prescriptions for the rest of the calendar year.
This cap applies whether you get Part D through a stand-alone drug plan (PDP) or through a Medicare Advantage plan that includes drug coverage (MAPD). It resets every January 1.
The deductible: up to $700 in 2027
Part D plans can charge a yearly deductible before drug coverage kicks in. The maximum allowed deductible is $615 in 2026 and $700 in 2027. Plans can charge less than that — or nothing at all — but no Part D plan can charge more.
Some plans apply the deductible only to certain drug tiers, so it's worth checking your plan's Summary of Benefits to see what applies to your prescriptions.
Say goodbye to the "donut hole": Part D now has three phases
You may remember the old "donut hole" — a coverage gap where costs spiked in the middle of the year. That gap was eliminated in 2025. Part D has just three phases:
1. Deductible phase. You pay 100% of your drug costs until you meet your plan's deductible (up to $615 in 2026 and $700 in 2027). If your plan has no deductible, you skip this phase.
2. Initial coverage phase. You pay a copay or coinsurance for each prescription, and your plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the yearly cap ($2,100 in 2026, $2,400 in 2027).
3. Catastrophic phase. Once you hit the yearly cap, you pay $0 for the rest of the year on covered drugs.
That's it. No more confusing gap, no more sudden jump in what you owe mid-year.
The Medicare Prescription Payment Plan: smoothing costs month to month
New in recent years and continuing in 2027 is the Medicare Prescription Payment Plan, sometimes called "M3P." It's optional and free to join. Instead of paying a large amount at the pharmacy counter — say, if you hit a big copay early in the year — you can spread your out-of-pocket drug costs across monthly bills for the rest of the calendar year.
It doesn't lower what you owe overall. It just changes when you pay. For people who take expensive medications early in the year, that predictability can help with budgeting. You sign up through your Part D plan.
What about higher-income enrollees? IRMAA
If your income is above certain levels, you pay an extra amount on top of your Part D premium called the Income-Related Monthly Adjustment Amount (IRMAA). In 2026, IRMAA begins for single filers with income above $109,000 (based on your 2024 tax return). Married couples filing jointly have a higher threshold.
IRMAA is paid directly to Medicare, not to your drug plan.
Availability in the Union City area
Union City is in Hudson County, where Medicare beneficiaries have a wide range of stand-alone Part D and Medicare Advantage prescription drug plans to choose from during enrollment. In 2027, Hudson County has 46 Medicare Advantage plans from 9 carriers, compared with 48 plans from 10 carriers in 2026. Specific plan options and their costs change each year, so the plan you had in 2026 may look different in 2027 — even if the name is the same. Always review your plan's Annual Notice of Change (ANOC), which arrives in late September.
Key dates to remember
- Annual Enrollment Period: October 15 – December 7. This is when you can join, switch, or drop a Part D or Medicare Advantage plan for the following year.
- Medicare Advantage Open Enrollment: January 1 – March 31. If you're already in a Medicare Advantage plan, you can switch to another MA plan or return to Original Medicare (and add a 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 Hudson County
(MA penetration in Hudson 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 in 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
Q: Does the $2,100 cap include my monthly premium?
Q: What if my drug isn't on my plan's formulary?
Q: I take insulin. Are there separate rules?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.