Medicare Part D

Part D Out-of-Pocket Cap in Rutland, VT (2027)

By the numbers

A big change is landing for 2027

RUTLAND, Vt. — Starting Jan. 1, 2027, the way Medicare pays for prescription drugs continues to be simpler and, for many people, less expensive than before the recent reforms. The headline figure: no one enrolled in a Medicare Part D drug plan will pay more than $2,400 out of pocket for covered prescriptions in a calendar year.

That figure — set by Medicare under the Inflation Reduction Act — is up from the $2,100 cap in 2026 and the $2,000 cap that took effect in 2025. Once you hit it, your covered drugs cost you $0 for the rest of the year.

For older adults in Rutland managing multiple prescriptions, this is the kind of change worth understanding before the Annual Enrollment Period closes on Dec. 7.

The coverage gap ("donut hole") is gone

If you've been on Medicare for a while, you may remember the dreaded coverage gap — the middle phase where your share of drug costs jumped after you and your plan spent a certain amount. That's over.

As of 2025, Part D has just three phases:

1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (no more than $615 in 2026 and $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance while your plan pays the rest. 3. Catastrophic phase — once your out-of-pocket spending hits the annual cap ($2,100 in 2026, $2,400 in 2027), you pay nothing for covered drugs the rest of the year.

That's it. No donut hole to fall into.

The Medicare Prescription Payment Plan: spread the cost

Hitting the annual cap still means that money leaving your checkbook — and for someone on expensive medications, most of it could land in January or February.

That's where the Medicare Prescription Payment Plan comes in. It's a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying the pharmacy all at once.

A few things to know:

• It's offered by every Part D and Medicare Advantage drug plan.
• You don't save money — you pay the same total — but the bills are smoothed out.
• You have to opt in. Your plan won't enroll you automatically.
• It tends to help most if you have high drug costs early in the year.

You can sign up before the year starts or any month during the year by contacting your drug plan directly.

What this looks like in Rutland County

Rutland is in Rutland County, where Vermonters have access to stand-alone Part D drug plans as well as Medicare Advantage plans that include drug coverage. Availability and plan details are set at the county level, and they can change from year to year — which is why Medicare gives everyone a fresh look each fall. The 2027 lineup is spelled out in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder.

The Annual Enrollment Period runs Oct. 15 through Dec. 7. This is the window to:

• Join, switch, or drop a Part D plan.
• Switch between Original Medicare and Medicare Advantage.
• Review whether your current plan still covers your drugs at the pharmacies you use.

If you're already in a Medicare Advantage plan and want to make a change after Jan. 1, there's also the Medicare Advantage Open Enrollment Period, Jan. 1 – March 31.

A quick word on higher-income households

Most people won't pay extra for Part D beyond their plan premium. But if your income is above $109,000 (single filer, based on your 2024 tax return) or $218,000 (joint), you may owe an IRMAA surcharge on top of your Part B and Part D premiums in 2026. Medicare notifies you by mail if this applies.