Medicare Part D
Rochester Part D drug costs capped at $2,400 in 2027
ROCHESTER, N.Y. — Starting Jan. 1, 2026, no one with a Medicare Part D drug plan will pay more than $2,100 out of pocket for covered prescriptions in a calendar year. It's the biggest change to Medicare drug coverage in a generation, and it lands right in the middle of Fall Open Enrollment, which runs through Dec. 7.
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Key takeaways
- Starting Jan. 1, 2027, Medicare Part D drug plans will cap out-of-pocket costs for covered prescriptions at $2,400 per year, and once you hit that amount you pay nothing more for covered drugs the rest of the year.
- The old "donut hole" coverage gap was eliminated in 2025, leaving Part D with three phases in 2027: deductible, initial coverage, and catastrophic.
- A new option called the Medicare Prescription Payment Plan lets you spread out-of-pocket drug costs into monthly bills instead of paying it all at the pharmacy, but it does not lower your total yearly costs.
- Fall Open Enrollment runs Oct. 15 through Dec. 7, and any plan changes made during that time take effect Jan. 1.
If you take expensive medications — or you're just trying to plan ahead — here's what the new cap really means, what happened to the old "donut hole," and how a new monthly payment option can help you avoid a common, costly mistake.
The Part D cap, explained plainly
For 2027, Medicare has set a hard ceiling on what you pay out of pocket for covered prescription drugs under Part D: $2,400 per year. Once your out-of-pocket spending on covered drugs hits that number, you pay nothing more for the rest of the calendar year for those drugs.
A few things worth knowing:
- The cap applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.
- Only what you pay for covered drugs counts toward the cap — premiums do not count.
- The Part D annual deductible can be no higher than $615 in 2026. Plans can set it lower, but that's the legal ceiling.
- The cap resets every January.
This is a federal rule set by the Centers for Medicare & Medicaid Services (CMS), so the $2,400 figure is the same in Rochester as it is anywhere else in the country.
The "donut hole" is gone
For years, Part D had four phases, including the infamous coverage gap — the "donut hole" — where people paid a bigger share of their drug costs in the middle of the year before catastrophic coverage kicked in.
That gap was eliminated in 2025. In 2027, Part D has just three phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance for each prescription. 3. Catastrophic phase — once your out-of-pocket spending reaches $2,400, you pay nothing more for covered drugs the rest of the year.
No more surprise price jumps mid-year. That's the biggest practical change for people on multiple medications.
The Medicare Prescription Payment Plan
Here's the part a lot of folks don't hear about — and where mistakes happen.
The Medicare Prescription Payment Plan (sometimes called "M3P" or drug cost smoothing) lets you spread your out-of-pocket drug costs across the calendar year in monthly bills, instead of paying them all at once at the pharmacy counter.
You don't save money overall — your total for the year is still capped at $2,400 in 2027. But instead of, say, handing over several hundred dollars at the pharmacy in January for a pricey prescription, that cost is billed to you in monthly installments from your Part D plan.
A few things to keep in mind:
- It's optional. You have to opt in through your Part D or Medicare Advantage drug plan.
- You can sign up before the year starts or any time during the year.
- If you miss a monthly bill, you can be removed from the program — though you'll still have your regular drug coverage.
- It tends to help people most who have high drug costs early in the year. If your prescriptions are inexpensive, this program may just add a bill to keep track of.
The common mistake? Assuming this program lowers your drug prices. It doesn't. It just changes when you pay.
What this means during Open Enrollment
Rochester is in Monroe County, where — like the rest of the country — Medicare beneficiaries can compare stand-alone Part D plans and Medicare Advantage plans that include drug coverage during the Annual Enrollment Period, Oct. 15 through Dec. 7. Changes take effect Jan. 1.
If you already have a plan, watch for your Annual Notice of Change (ANOC) letter, which arrives in September. It tells you what's changing in your plan for 2027 — including the drug formulary, tiers, and pharmacy network.
Because the cap ($2,100 in 2026, $2,400 in 2027) is a federal rule, every Part D plan must honor it. But plans still differ in:
- Which drugs they cover (the formulary)
- Which tier your drug is on
- Which pharmacies are in-network
- The monthly premium and deductible (up to the $700 max in 2027)
The Plan Finder tool at Medicare.gov lets you enter your medications and preferred pharmacy and see how different plans would price out your specific drugs for the year.
A quick note on higher incomes (IRMAA)
If your income is above certain levels, you pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part B and Part D premiums. In 2026, IRMAA begins for single filers with income above $109,000 (and joint filers above $218,000), based on your 2024 tax return. It's worth factoring in if you're near those thresholds.
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 Monroe County
(MA penetration in Monroe 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 as of 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
Does the $2,100 cap include my monthly premium?
What if my drug isn't on my plan's formulary?
Can I join the Prescription Payment Plan mid-year?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.