Medicare Part D

Monthly Payment Option Comes to Medicare in Lynnwood

LYNNWOOD, Wash. — This fall, people choosing Medicare drug coverage for 2027 are weighing an updated Part D out-of-pocket cap — $2,400 per enrollee for covered prescriptions — along with the monthly payment option that lets you spread drug costs across the year. The old "donut hole" remains gone. With the Annual Enrollment Period running October 15 through December 7, here is what Lynnwood readers should know before they lock in coverage.

The out-of-pocket cap, in plain English

Starting January 1, 2027, no one enrolled in a Medicare Part D plan will pay more than $2,400 out of pocket for covered prescription drugs during the calendar year. (The same cap is $2,100 in 2026.) Once your spending on covered drugs reaches that ceiling, you pay nothing for the rest of the year on covered medications from your plan.

This cap applies to what you pay — deductibles, copays, and coinsurance for covered drugs. It does not include your monthly Part D premium, and it does not apply to drugs your plan doesn't cover. The cap is set by Medicare and applies the same way across every Part D plan in the country, including plans sold in Snohomish County.

For context, the maximum Part D deductible a plan can charge is $615 in 2026 and $700 in 2027. Plans can set a lower deductible, but no plan can go above that.

The coverage gap is officially gone

For years, the "donut hole" was the confusing middle phase of Part D where enrollees suddenly paid a bigger share of their drug costs. That phase ended in 2025.

Part D now has three phases:

1. Deductible phase — you pay full negotiated cost 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 the annual cap ($2,400 in 2027). 3. Catastrophic phase — you pay nothing for covered drugs for the rest of the year.

It's a cleaner structure, and it means the math is much easier to plan around than it used to be.

The Medicare Prescription Payment Plan

Even with the annual cap, hitting that ceiling early in the year can still be a strain — especially if you take a high-cost specialty drug in January and get a big bill right away.

That's what the Medicare Prescription Payment Plan is for. It's a free, optional program that lets you pay your out-of-pocket drug costs to your Part D plan in monthly installments instead of paying the pharmacy all at once. You still owe the same total; it's just spread out across the remaining months of the plan year.

A few things to know:

• It's optional. You have to opt in with your Part D plan.
• It doesn't save you money — it changes the timing of your payments.
• If you have very low drug costs, it may not be worth the paperwork.
• People who face a large bill early in the year tend to benefit most.

You can sign up before the plan year starts or at any point during the year through your Part D plan.

What Lynnwood readers should check during AEP

Lynnwood is in Snohomish County, where residents can choose from a range of stand-alone Part D drug plans and Medicare Advantage plans that include drug coverage. The Annual Enrollment Period — October 15 through December 7 — is your window to compare those options for 2027. The 2027 plan lineup is detailed in each plan's ANOC and on Medicare.gov's Plan Finder.

A few practical steps:

• Read your plan's Annual Notice of Change (ANOC), which arrives by late September. It tells you what's changing in 2027 — formulary, pharmacy network, and cost-sharing.
• Check that your prescriptions are still on the plan's 2027 formulary.
• Check that your preferred Lynnwood-area pharmacy is still in-network.
• Use the Plan Finder at medicare.gov to compare plans by your specific drug list.

If you have higher income, remember that IRMAA surcharges — extra amounts added to Part B and Part D premiums — kick in above $109,000 in modified adjusted gross income for a single filer in 2026 (based on your 2024 tax return).

If you miss AEP, people already on a Medicare Advantage plan have another window — the Medicare Advantage Open Enrollment Period, January 1 through March 31 — to switch Advantage plans or return to Original Medicare.