Medicare Part D
Medicare Coverage Gap & Cap: Santa Fe 2027
SANTA FE, N.M. — On Jan. 1, 2027, the firm yearly ceiling on what people with Medicare Part D pay out of pocket for covered prescription drugs rises to $2,400 for the year. Once you reach it, you pay $0 for the rest of the calendar year on covered medications. For older adults in Santa Fe managing insulin, blood thinners, or cancer drugs, the cap remains one of the biggest shifts in Part D since the program began — and it's worth understanding before Annual Enrollment closes Dec. 7.
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Will your prescriptions still be covered in 2027?
Part D plans rewrite their drug lists every year — tiers move, pharmacies change, drugs drop off. One call checks your exact medications against the 2027 plans in your area.
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Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, the Medicare Part D yearly cap on what you pay for covered drugs is $2,400, and after that you pay $0 for the rest of the year.
- The cap covers deductibles, copays, and coinsurance, but not your monthly premium or drugs your plan doesn't cover. The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027, and CMS sets the maximum Part D deductible at $615 for 2026 and $700 for 2027.
- The old "donut hole" coverage gap was eliminated in 2025 and remains gone in 2027, so there's no longer a stretch where drug costs suddenly jump.
- The Annual Enrollment Period runs October 15 through December 7, giving you a window to switch drug plans or Medicare Advantage plans before changes take effect January 1.
The Part D cap, in plain English
The cap applies to what you personally spend on covered Part D drugs — deductibles, copays, and coinsurance — during the calendar year. It does not include your monthly Part D premium, and it doesn't apply to drugs your plan doesn't cover.
The cap is a program-wide rule set by the Centers for Medicare & Medicaid Services (CMS). It applies to every Part D plan, whether that coverage comes as a stand-alone drug plan alongside Original Medicare or is built into a Medicare Advantage plan.
CMS sets the maximum Part D deductible at $700 for 2027 (it is $615 for 2026). Plans can charge less, but not more.
The "donut hole" is gone
If you've been on Medicare for a while, you probably remember the coverage gap — the "donut hole" — where your share of drug costs suddenly jumped after you hit a spending threshold. That phase was eliminated in 2025 and stays gone in 2027.
Part D now has three phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $615 in 2026 ($700 in 2027)). 2. Initial coverage phase — you pay a copay or coinsurance until your out-of-pocket total reaches $2,100 in 2026 ($2,400 in 2027). 3. Catastrophic phase — you pay $0 for covered drugs the rest of the year.
No more surprise middle stretch where costs balloon. That's the biggest practical change for people on expensive medications.
The Medicare Prescription Payment Plan
Even with a cap ($2,100 in 2026, $2,400 in 2027), hitting that number in January or February can hurt. That's where the Medicare Prescription Payment Plan comes in. It's an optional program — sometimes called "M3P" — that lets you spread your out-of-pocket drug costs across the calendar year in monthly bills instead of paying at the pharmacy counter.
A few things to know:
- It's free to join. It does not lower your total cost; it just smooths it out.
- You sign up through your Part D or Medicare Advantage drug plan, not through Medicare directly.
- It tends to help most if you have high drug costs early in the year. It may not help — and could feel like extra paperwork — if your drug costs are low or steady.
- You can opt in at any point during the year.
If you're weighing it, ask your plan to walk you through what your monthly bill would look like based on your current prescriptions.
What this means locally
Santa Fe is in Santa Fe County, where Medicare beneficiaries can compare stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Plan availability, formularies (the list of covered drugs), and pharmacy networks are set at the county level, so two neighbors in Santa Fe generally see the same menu of options — but a cousin in Albuquerque or Las Vegas, N.M., may see something different.
The Annual Enrollment Period runs Oct. 15 through Dec. 7. That is the window to switch drug plans, join a Medicare Advantage plan, or return to Original Medicare with a stand-alone Part D plan. Changes take effect Jan. 1.
If you already have a Medicare Advantage plan, there's also the Medicare Advantage Open Enrollment Period from Jan. 1 through March 31, when you can switch to a different Advantage plan or drop back to Original Medicare.
A quick note on higher-income surcharges
If your income is above $109,000 as a single filer (or roughly double that for a married couple filing jointly) based on your 2024 tax return, you may pay an income-related monthly adjustment amount (IRMAA) on top of your Part D premium in 2026. IRMAA is separate from the cap ($2,100 in 2026, $2,400 in 2027) and doesn't count against it. Social Security notifies you by mail if it applies to you.
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 Santa Fe County
(MA penetration in Santa Fe 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 $2,100 in 2026 ($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 $2,100 cap include my monthly premium?
If I join the Prescription Payment Plan, do I still hit the cap?
What if my drug isn't on my plan's formulary?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.