Medicare Part D
Medicare Part D in 2026: $2,100 Cap and 3 Phases Explained
NORTH CHARLESTON, S.C. — If you take prescription drugs and have Medicare, 2027 brings another round of changes to Part D. The yearly cap on what you'll pay out of pocket for covered drugs is going up, and the old "donut hole" remains gone. Here's a plain-language look at how the coverage works, and what North Charleston residents should keep in mind before the enrollment deadline.
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Key takeaways
- Starting in 2027, Medicare Part D has a $2,400 yearly cap on what you pay out of pocket for covered drugs, and once you hit it, covered prescriptions cost $0 for the rest of the year.
- The "donut hole" coverage gap is gone, and Part D now has just three phases: deductible, initial coverage, and catastrophic.
- For 2027, plans can charge a deductible of no more than $700 before coverage starts, and an optional Medicare Prescription Payment Plan lets you spread drug costs into monthly bills instead of paying it all at the pharmacy.
- Higher earners may pay an extra IRMAA surcharge on top of their Part D premium, which for 2026 starts above $109,000 in income for single filers, based on tax returns from two years earlier.
What Part D Is, in One Paragraph
Part D is the part of Medicare that helps pay for prescription drugs. It's sold by private insurance companies that follow rules set by the federal Medicare program. You can get Part D either as a stand-alone drug plan (added to Original Medicare) or built into a Medicare Advantage plan. Each plan has its own list of covered drugs, called a formulary, and its own pharmacy network.
The $2,400 Cap Is the Big Headline for 2027
Starting in 2027, the most you'll pay out of pocket for covered Part D drugs in a calendar year is $2,400. (The cap is $2,100 in 2026.) Once your out-of-pocket spending on covered drugs hits that number, you pay $0 for covered prescriptions for the rest of the year.
This cap applies to what you pay — not what your plan pays. Premiums don't count toward it, and drugs that aren't on your plan's formulary don't count either. But copays and coinsurance on covered drugs do.
According to CMS — Medicare Part D program rules (medicare.gov) — this cap replaces the older system that had no annual ceiling on drug spending.
The Deductible: Up to $700 in 2027
Part D plans can charge a deductible before coverage kicks in. For 2027, the maximum allowed deductible is $700 (it is $615 in 2026). Plans can charge less than that, or nothing at all, but no plan can charge more.
A deductible is the amount you pay yourself before the plan starts sharing costs. Some plans apply it to all drugs; others only to certain drug tiers.
The Three Phases (Yes, the Donut Hole Is Gone)
The old four-phase system, including the confusing coverage gap known as the "donut hole," was eliminated in 2025. In 2027, as in 2026, Part D has just three phases:
1. Deductible phase. You pay the full negotiated price for your drugs until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase. You pay a copay or coinsurance, and your plan pays the rest, until your out-of-pocket spending reaches $2,400. 3. Catastrophic phase. After you hit the $2,400 cap, you pay $0 for covered drugs for the rest of the year.
That's it. No more gap where costs suddenly jumped.
The Medicare Prescription Payment Plan
New in the last couple of years, and still available in 2027, is the Medicare Prescription Payment Plan. This is an optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly bills, instead of paying a big amount at the pharmacy counter.
It doesn't lower what you owe overall — the total is the same — but it can smooth the timing, which helps if you have expensive drugs early in the year. You have to opt in through your Part D plan. If it sounds useful, ask your plan or call 1-800-MEDICARE.
A Note on Higher Incomes: IRMAA
If your income is above certain thresholds, you'll pay an extra amount on top of your Part D premium. This is called IRMAA (Income-Related Monthly Adjustment Amount). For 2026, IRMAA surcharges begin above $109,000 in income for a single filer (higher thresholds apply for joint filers). Social Security uses your tax return from two years ago to decide.
Plan Availability in Charleston County
North Charleston is in Charleston County, where Medicare beneficiaries can choose from a range of stand-alone Part D drug plans and Medicare Advantage plans that include drug coverage. Because Medicare sets plan availability at the county level, the specific number of plans you can pick from is a Charleston County figure — not a North Charleston-only figure.
The exact list changes each year. The best place to see what's available for your ZIP code is the Plan Finder at medicare.gov.
Key Dates You Shouldn't Miss
- Annual Enrollment Period (AEP): October 15 – December 7, 2026. This is when you can join, switch, or drop a Part D or Medicare Advantage plan for 2027 coverage.
- Medicare Advantage Open Enrollment: January 1 – March 31. If you're already in a Medicare Advantage plan, you get one more chance to switch to another MA plan or return to Original Medicare with a stand-alone Part D plan.
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 Charleston County
(MA penetration in Charleston 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.
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
Q: I hit the donut hole every year. What happens to me in 2027?
Q: Does my monthly premium count toward the $2,400 cap?
Q: Do I have to sign up for the Medicare Prescription Payment Plan?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.