Medicare Part D
How Medicare Part D's New Drug Cap Works in Fort Worth
FORT WORTH, Texas — 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 out-of-pocket cap keeps climbing modestly, and it lands right as Fort Worth residents are working through their Annual Enrollment Period choices (October 15 through December 7).
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Key takeaways
- - Starting January 1, 2027, Medicare Part D out-of-pocket spending on covered drugs is capped at $2,400 per year, up from $2,100 in 2026.
- - Once you reach that $2,400 limit through deductibles and copays or coinsurance, you pay nothing for covered drugs for the rest of the calendar year.
- - The old "donut hole" coverage gap was eliminated in 2025 and remains gone in 2027, leaving just three simple phases: deductible, initial coverage, and catastrophic.
- - If a big bill early in the year is a concern, the free Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments without changing your total cost.
Here is what actually changes, in plain language, and what to think about before the new year.
The new $2,400 out-of-pocket cap
For 2027, Medicare sets the annual out-of-pocket limit for Part D covered drugs at $2,400, up from $2,100 in 2026. Once your spending on covered prescriptions hits that number — through deductibles and copays or coinsurance — you pay nothing for covered drugs for the rest of the calendar year.
This cap applies whether your Part D coverage comes through a stand-alone drug plan or is built into a Medicare Advantage plan that includes drug coverage. It resets every January 1.
One important detail: the cap counts spending on drugs your plan actually covers. Medicine your plan does not list on its formulary generally does not count toward the $2,400.
The coverage gap is gone
Older Medicare guides still talk about the “donut hole” — a stretch where you paid more out of pocket after your plan hit a spending threshold. That phase was eliminated in 2025 and stays gone in 2027.
Part D now has three simple phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (no more than $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance; your plan pays the rest. 3. Catastrophic phase — once your out-of-pocket spending reaches $2,400, you pay nothing for covered drugs for the rest of the year.
No more confusing middle stage. No more sudden price jumps mid-year for people on expensive medications.
The Medicare Prescription Payment Plan
Hitting the $2,400 cap is helpful, but $2,400 in January is still a rough bill. That is where the Medicare Prescription Payment Plan comes in.
This is a free, optional program from Medicare. Instead of paying the pharmacy at the counter, you spread your Part D out-of-pocket costs across monthly payments to your plan for the rest of the calendar year. Your total cost does not change — the timing does.
A few things to know:
- It is voluntary. You have to opt in with your Part D plan (or the Part D portion of your Medicare Advantage plan).
- You can sign up before the year starts or any month during the year.
- If you opt in mid-year, the remaining months absorb your costs, so monthly bills will be higher the later you start.
- It works best for people with predictable, higher drug costs. For someone with a couple of low-cost generics, it can actually feel like more paperwork than it is worth.
Medicare.gov has a worksheet to help you decide if smoothing your payments makes sense.
How to think through your choice this fall
Fort Worth is in Tarrant County, where Medicare beneficiaries can compare 73 Medicare Advantage plans from 12 carriers for 2027. Rather than chasing a specific plan, use the 2027 rules as a checklist:
- Look at the drugs you actually take. Check each plan's formulary on medicare.gov's Plan Finder.
- Check the pharmacy network. A plan's cost-sharing can differ between preferred and standard pharmacies.
- Notice the deductible. Plans can charge up to $700 in 2027, but many charge less or none for certain tiers.
- Think about timing. If you know you will hit the cap early, the Payment Plan may help. If your drug spending is low, it may not matter.
- Watch for IRMAA. Higher-income enrollees pay an added Part D surcharge; it begins above $109,000 in income for a single filer in 2026.
Key deadlines to keep in mind
- October 15 – December 7: Medicare Annual Enrollment Period. Changes take effect January 1.
- January 1 – March 31: Medicare Advantage Open Enrollment. If you are already in a Medicare Advantage plan, you get one switch during this window.
- Anytime: You can join or leave the Medicare Prescription Payment Plan for the current year.
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 Tarrant County
(MA penetration in Tarrant 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 a hard yearly cap of $2,400 on what you pay out of pocket for covered drugs 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 $2,100 cap apply to Medicare Advantage plans too?
Do insulin and vaccines count toward the cap?
What happens if I don't opt into the payment plan and get a big pharmacy bill in January?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.