Medicare Part D

Albuquerque Medicare: Coverage Gap & 2027 Cap

ALBUQUERQUE, N.M. — The Part D out-of-pocket cap is $2,100 in 2026 and rises to $2,400 in 2027 for covered prescription drugs in a calendar year. It's the biggest change to Medicare drug coverage in a generation, and the next step lands right in the middle of Fall Open Enrollment — the window when Albuquerque seniors can review their coverage for 2027.

Here's what actually changed, what stayed the same, and where to go for real answers.

The Part D cap, in plain English

Once your out-of-pocket spending on covered prescriptions hits the annual cap, you pay nothing more for the rest of the year on those drugs. The cap is $2,100 in 2026 and $2,400 in 2027. It applies to Part D and to the drug portion of Medicare Advantage plans that include drug coverage.

A few things to know:

• The cap applies to covered drugs on your plan's formulary. Drugs your plan doesn't cover don't count toward it.
• Premiums don't count toward the $2,100 in 2026 ($2,400 in 2027).
• The cap resets every January 1.

This is a program-wide rule from the Centers for Medicare & Medicaid Services (CMS). It applies whether you live in Albuquerque, Rio Rancho, or anywhere else in the country.

The "donut hole" is gone

If you've had Medicare for a while, you probably remember the coverage gap — the dreaded "donut hole" where your drug costs suddenly jumped after you hit a spending threshold. That phase was eliminated in 2025.

Part D now has just three phases:

1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (no more than $615 in 2026). 2. Initial coverage phase — you pay a copay or coinsurance while the plan pays the rest. 3. Catastrophic phase — once you hit $2,100 in 2026 ($2,400 in 2027) in out-of-pocket spending, you pay nothing for covered drugs the rest of the year.

Simpler math. Fewer surprises.

The Medicare Prescription Payment Plan

Even with the annual ceiling, hitting $2,400 in January is a lot to swing at once. That's where the Medicare Prescription Payment Plan comes in — a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly bills instead of paying it all at the pharmacy counter.

A few key points:

• It's optional. You have to opt in.
• It doesn't lower your total costs — it just smooths them out.
• Your Part D or Medicare Advantage plan handles the billing.
• You can sign up before the plan year or any month during the year.

This program is most helpful for people who take high-cost specialty medications early in the year. It may be less useful for people with steady, low monthly costs. Your plan can walk you through the math.

Why this matters during Open Enrollment

The Annual Enrollment Period runs October 15 through December 7, 2026. That's the window to switch Part D plans or change Medicare Advantage plans for 2027. After that, there's a Medicare Advantage Open Enrollment Period from January 1 through March 31, 2027 for people already in a Medicare Advantage plan.

Albuquerque is in Bernalillo County, where Medicare beneficiaries have a range of stand-alone Part D and Medicare Advantage plans to choose from. Every plan has to honor the new cap ($2,100 in 2026, $2,400 in 2027), but formularies (the list of covered drugs), pharmacy networks, and cost-sharing before you hit the cap still vary widely. That's why comparing plans on your actual medication list matters more than ever.

The official plan finder at Medicare.gov lets you enter your prescriptions and see how each plan handles them for 2027.

A quick note on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you'll pay an IRMAA surcharge on top of your standard Part B and Part D premiums in 2026. The $2,100 in 2026 ($2,400 in 2027) drug cap still applies to you — IRMAA just affects what you pay in premiums, not what counts toward out-of-pocket drug spending.