Medicare Part D
Medicare's 2027 Drug Cap in Lake Oswego, Ore.
LAKE OSWEGO, Ore. — Starting January 1, 2027, no one with a Medicare Part D drug plan will pay more than $2,400 out of pocket for covered prescriptions in a calendar year. The Part D out-of-pocket cap continues to climb modestly from its first year, and it lands right in the middle of Annual Enrollment, which runs through December 7.
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Speak to a Licensed Insurance Agent
Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, Medicare Part D drug plans will cap out-of-pocket prescription costs at $2,400 per year, after which covered drugs cost $0 for the rest of the year.
- This cap applies to both stand-alone Part D plans and drug coverage included in Medicare Advantage plans, and it follows the elimination of the old coverage gap in 2025, leaving just three phases: deductible, initial coverage, and catastrophic.
- The Part D deductible can be as high as $700 in 2027, and an optional, free program called the Medicare Prescription Payment Plan (M3P) lets people spread their out-of-pocket drug costs into level monthly payments instead of paying large amounts at once.
- Annual Enrollment runs October 15 through December 7, with changes taking effect January 1, so it's worth reviewing plan options each year since formularies, tiers, and pharmacy networks can change.
For older adults in Lake Oswego who take costly medications — think brand-name drugs for cancer, diabetes, autoimmune conditions, or blood thinners — the ceiling could reshape the math on which drug plan makes sense for 2027.
What the Part D cap actually does
Under the 2027 Part D rules from the Centers for Medicare & Medicaid Services (CMS), once your out-of-pocket spending on covered prescription drugs hits $2,400, you pay $0 for the rest of the year on those covered drugs. The cap applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.
A few things to keep in mind:
- The cap counts what you pay for covered drugs — deductibles, copays, and coinsurance.
- Monthly premiums do not count toward the $2,100 in 2026 ($2,400 in 2027).
- Drugs your plan doesn't cover don't count either. That's why the plan's formulary (its drug list) still matters a lot during Annual Enrollment.
The Part D deductible in 2027 can be as high as $700, though many plans set it lower. After the deductible, you're in the standard cost-sharing phase until you reach $2,400 — then coverage kicks in fully for the rest of the year.
The "donut hole" is gone
If you remember the dreaded coverage gap — that middle stretch where you suddenly paid more — it's officially in the rear-view mirror. The coverage gap was eliminated in 2025, and Part D now has just three phases: deductible, initial coverage, and catastrophic (where the cap ($2,100 in 2026, $2,400 in 2027) sits).
That's a real simplification. You no longer have to track four phases or fear a mid-year price jump. Once your true out-of-pocket costs cross the threshold, you're done paying for covered drugs that year.
Meet the Medicare Prescription Payment Plan
Here's the piece a lot of people are still learning about: the Medicare Prescription Payment Plan, sometimes called "M3P" or drug-cost smoothing.
It's optional and free to join. Instead of paying the pharmacy a large amount at once — say, several hundred dollars in January for a specialty drug — you can spread your out-of-pocket drug costs across the remaining months of the calendar year in level monthly payments billed by your Part D plan.
A few honest notes:
- It doesn't lower your total costs. You still owe the same amount over the year.
- It's most helpful for people with high, front-loaded drug bills.
- If your prescriptions are inexpensive and steady, signing up may not be worth the extra bill to track.
- You can opt in before the plan year begins or anytime during the year by contacting your Part D plan.
Why this matters right now in Clackamas County
Lake Oswego is in Clackamas County, where Medicare beneficiaries choose each fall between Original Medicare paired with a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage. Availability is set at the county level, and Oregon residents typically have a wide range of Part D and Medicare Advantage options to compare.
Because plans reset their formularies, tiers, and pharmacy networks every year, the plan that worked in 2026 may not be the strongest fit for 2027 — especially as the out-of-pocket cap changes how drug costs play out.
Annual Enrollment Period: October 15 – December 7. Changes made during this window take effect January 1. Medicare Advantage Open Enrollment: January 1 – March 31, for people already in an Advantage plan who want to switch once.
Higher-income households: watch IRMAA
If your 2024 income was above $109,000 for a single filer (or the higher married-filing-jointly thresholds), you may pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part B and Part D premiums in 2026. IRMAA is set by Social Security based on your tax return from two years earlier, and life-changing events (retirement, loss of a spouse) can be appealed.
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 Clackamas County
(MA penetration in Clackamas 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 of $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 hit $2,400 in March, do I really pay $0 for the rest of the year?
Do I have to sign up for the payment plan?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.