Medicare Part D

Medicare Part D in 2026: New $2,100 Cap, 3 Phases

YORK, Pa. — If you take prescription drugs and have Medicare, 2027 continues some of the biggest Part D changes in years. The out-of-pocket cap rises to $2,400, the deductible tops out at $700, and the old "donut hole" is gone — replaced by a simpler three-phase design. Here's what York-area readers should know before the plan year begins.

What Part D covers, in plain terms

Part D is the part of Medicare that helps pay for prescription drugs you pick up at the pharmacy or get by mail order. It's optional, but if you don't sign up when you're first eligible and don't have other creditable drug coverage, you may owe a late enrollment penalty later.

You can get Part D two ways: as a standalone drug plan added to Original Medicare, or built into a Medicare Advantage plan that includes drug coverage. Either way, the 2027 program rules below apply.

The 2027 deductible: up to $700

Every Part D plan can set its own deductible, but no plan can charge more than $700 in 2027. Some plans set it lower, and some waive it for certain drug tiers. Until you meet the deductible, you generally pay the full negotiated price for your covered drugs.

The out-of-pocket cap in 2027

This is the headline change readers ask about most. In 2027, once your out-of-pocket spending on covered Part D drugs hits $2,400, you pay nothing more for covered drugs for the rest of the calendar year. That cap resets every January 1.

The cap applies to what you pay for covered drugs — not to premiums, and not to drugs your plan doesn't cover. It's a hard ceiling that didn't exist before 2025, and it's meant to give people with high drug costs real predictability.

The three phases, step by step

Since Medicare eliminated the coverage gap in 2025, Part D has three phases instead of four:

1. Deductible phase. You pay the full cost of your drugs (up to your plan's deductible, which can't exceed $700 in 2027). If your plan has no deductible, you skip this phase.

2. Initial coverage phase. You pay a copay or coinsurance, and your plan pays the rest. You stay in this phase until your out-of-pocket spending reaches $2,400 in 2027.

3. Catastrophic phase. Once you hit the $2,400 cap in 2027, you pay nothing more for covered drugs for the rest of the year.

There is no more "donut hole" where costs used to jump in the middle of the year. That phase is gone.

Smoothing costs with the Payment Plan

Introduced in 2025 and continuing in 2027, the Medicare Prescription Payment Plan lets you spread your drug costs across the calendar year in monthly installments instead of paying large amounts at the pharmacy counter. It's free, it's optional, and you sign up through your Part D plan. It doesn't lower your total costs — it just spreads them out. This can be especially useful if you have an expensive medication early in the year.

A 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 D premium in 2026. Social Security will notify you directly if it applies.

What's available in York

York is in York County, where residents can compare standalone Part D plans and Medicare Advantage plans with drug coverage during the Annual Enrollment Period, October 15 through December 7. If you're already in a Medicare Advantage plan, you also have the Medicare Advantage Open Enrollment Period from January 1 through March 31 to make one change. Plan availability is set at the county level, so two neighbors in York should see the same set of options.