Medicare Part D
Part D Out-of-Pocket Cap in Lancaster, Pa. 2027
Lancaster, Pa. — If you take prescription drugs and have Medicare, the Part D out-of-pocket cap continues in 2027, with a higher dollar figure than this year. Here is what that means, how the three payment phases work, and where to get help sorting it out.
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Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, Medicare Part D out-of-pocket drug costs are capped at $2,400 per year, after which the plan covers covered drugs at 100% for the rest of the year.
- The old "donut hole" coverage gap is gone, leaving just three phases: a deductible phase, an initial coverage phase, and a catastrophic phase where you pay $0.
- The maximum deductible any Part D plan can charge is $615 in 2026 and $700 in 2027, though some plans set it lower.
- A free, voluntary option called the Medicare Prescription Payment Plan (M3P) lets you spread your yearly drug costs into monthly payments through your plan instead of paying it all at the pharmacy.
The Big News: A Part D Out-of-Pocket Cap
The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once you hit that number in a calendar year, your plan covers 100% of your covered drugs for the rest of the year.
This cap applies whether you get Part D through a stand-alone drug plan or as part of a Medicare Advantage plan that includes drug coverage. It resets every January.
For people with high drug costs — think insulin, cancer medications, or specialty drugs — this is a meaningful safety net. In past years, there was no ceiling at all.
Source: CMS — Medicare Part D program rules (medicare.gov).
The Three Phases of Part D in 2027
The old “donut hole” coverage gap was eliminated in 2025. So in 2027, your Part D year has just three phases:
1. The deductible phase. You pay the full negotiated price for your drugs until you meet your plan's deductible. The maximum deductible any Part D plan can charge is $615 in 2026 and $700 in 2027. Some plans set it lower, and some drugs may be covered before the deductible is met — that depends on the plan.
2. The initial coverage phase. After the deductible, you pay a copay or coinsurance for each prescription, and your plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the annual cap — $2,100 in 2026 and $2,400 in 2027.
3. The catastrophic phase. Once you hit the annual cap, you pay nothing for covered drugs for the rest of the year.
That's it. No more confusing gap in the middle.
The Monthly Payment Option (M3P)
Even with the cap, a big drug bill in January can sting. That's why Medicare now offers the Medicare Prescription Payment Plan, sometimes called M3P.
It's free and voluntary. Instead of paying the pharmacy at pickup, you let Medicare spread your yearly drug costs into monthly payments billed by your plan. You'll still pay the same total amount — you just pay it in smoother pieces across the year.
This option can help if you'd otherwise face a large upfront cost early in the year. You can sign up before the year starts or any month during the year by contacting your Part D plan.
What Lancaster Residents Should Know Locally
Lancaster is in Lancaster County, where Part D plans are offered by multiple private insurance companies approved by Medicare. The specific plans available, their formularies (drug lists), and their pharmacy networks are set at the county level.
That means two neighbors on the same street generally have the same menu of plans to choose from — but the “right” plan for each of them can be very different, depending on the drugs they take and the pharmacies they use.
You can see the full list of plans available in Lancaster County at medicare.gov/plan-compare.
A Word on Higher-Income Surcharges (IRMAA)
Most people just pay their plan premium. But if your income is above certain thresholds, you'll also pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part D premium.
For 2026, IRMAA surcharges begin at income above $109,000 for a single filer (higher for married couples filing jointly). Medicare uses your tax return from two years ago to decide. If your income has dropped since then — for example, because you retired — you can ask Social Security to reconsider.
Key Dates to Remember
- October 15 – December 7, 2026: Annual Enrollment Period. This is when you can join, switch, or drop a Part D plan for 2027 coverage that starts January 1.
- January 1 – March 31: Medicare Advantage Open Enrollment. If you're in a Medicare Advantage plan, you can make one change during this window.
Reviewing your Part D plan every fall is worth the hour it takes. Plans change their formularies and pharmacy networks every year, and so do the drugs you may be taking.
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 Lancaster County
(MA penetration in Lancaster 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). The yearly cap on what you pay out of pocket for covered drugs is $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 $2,400 cap include my monthly premium?
What if my drug isn't on my plan's formulary?
Do I have to sign up for the monthly payment option?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.