Medicare Part D
Part D in Indian Trail: Cap, Coverage Gap, Payment Plan
INDIAN TRAIL, N.C. — Since Jan. 1, 2026, the way Medicare pays for prescription drugs has looked different than it ever had before. For the first time, there is a firm ceiling on what people with Part D coverage pay out of pocket for their medications in a calendar year: $2,100 in 2026, rising to $2,400 in 2027.
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Key takeaways
- The Part D yearly cap on out-of-pocket drug costs is $2,100 in 2026 and $2,400 in 2027; after you reach it, covered drugs cost nothing for the rest of that year.
- The Part D deductible is capped at $615 in 2026 and $700 in 2027, and the old "donut hole" coverage gap stays eliminated, leaving just three phases: deductible, initial coverage, and catastrophic coverage.
- The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly installments across the year instead of paying it all at the pharmacy, though it doesn't lower your total costs.
- People with 2024 income above $109,000 (single) or $218,000 (joint) may pay an IRMAA surcharge on premiums in 2026, but this is separate from the $2,100 drug cost cap.
For older adults here in Union County who take costly prescriptions — the kind that used to blow through household budgets by summer — this is one of the biggest changes to Medicare in years. Here is what is actually changing, and what stays the same.
The $2,100 cap, in plain English
In 2027, once your out-of-pocket spending on covered Part D drugs reaches $2,400, you pay nothing more for those drugs for the rest of the year. (The same cap in 2026 is $2,100.) It applies whether your drug coverage comes through a standalone Part D plan or a Medicare Advantage plan that includes drug coverage.
A few things to know about how that $2,100 is counted:
- Only what you pay counts toward the cap — your deductible, copays, and coinsurance on covered drugs.
- Your monthly premium does not count.
- Manufacturer discounts on brand-name drugs still help you, but they don't count toward your $2,100 either.
The Part D deductible is capped at $615 in 2026 and $700 in 2027. After you meet it, you're in the standard cost-sharing phase until your out-of-pocket spending hits the yearly cap — then you're done paying for covered drugs for the year.
The "donut hole" is really gone
If you've been on Medicare for a while, you probably remember the coverage gap — the so-called donut hole — where costs suddenly jumped in the middle of the year. That gap was eliminated in 2025, and it stays gone in 2026 and 2027.
Part D now has just three phases: the deductible, the initial coverage phase, and catastrophic coverage (where you pay $0 once you hit the cap). It's simpler, and for people on expensive drugs, it's a much softer landing.
Spreading the cost: the Medicare Prescription Payment Plan
Here's the piece a lot of folks miss. Even with the $2,100 cap, some people could still face a big pharmacy bill in January or February — imagine hitting a $500 copay on the first fill of the year.
The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly installments, instead of paying it all at the pharmacy counter. It doesn't change how much you pay overall — it just smooths it out.
A few basics:
- It's optional. You have to opt in.
- You can sign up before the year starts or any month during the year.
- You keep getting your drugs at the pharmacy as usual; your plan bills you monthly for the cost.
- It tends to help most if you have high drug costs early in the year, or steady high costs throughout.
If you're not sure whether it fits your situation, your plan can walk you through it, and so can a local SHIP counselor (details below).
What this means locally
Indian Trail is in Union County, where Medicare beneficiaries choose from a mix of Medicare Advantage plans (with and without drug coverage) and standalone Part D plans. The rules above — the $2,100 cap, the $615 deductible ceiling, the payment plan — apply the same way to every Part D plan sold in the county, regardless of the insurer's name on the card.
That's worth remembering during Annual Enrollment (Oct. 15 – Dec. 7). Plans still differ on which drugs they cover, which pharmacies are in network, and how they tier medications. But the outer guardrails on out-of-pocket cost are now set by federal law.
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 may pay an IRMAA surcharge on top of your Part B and Part D premiums in 2026. The $2,100 cap still applies to you — IRMAA is a premium adjustment, not a change in your drug cost-sharing.
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 Union County
(MA penetration in Union 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 insulin?
If I join the Prescription Payment Plan, do I save money?
What if I only take one or two low-cost generics?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.