Medicare Part D
Part D Cap for Racine Medicare Users in 2027
RACINE, Wis. — The Medicare Part D out-of-pocket safety net continues in 2027: once your out-of-pocket spending on covered prescription drugs hits $2,400 in a calendar year, you pay $0 for the rest of that year. The cap, which started at $2,100 in 2026, is adjusting as the Annual Enrollment Period (Oct. 15–Dec. 7) closes and new coverage begins.
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Will your prescriptions still be covered in 2027?
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Key takeaways
- The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once you reach it, covered drugs cost $0 for the rest of that calendar year.
- This cap applies to both stand-alone Part D plans and Medicare Advantage plans with drug coverage, and it resets on January 1 each year.
- The old coverage gap, or "donut hole," was eliminated in 2025, leaving a simpler three-phase structure: deductible (up to $615 in 2026 ($700 in 2027)), initial coverage, then catastrophic coverage at $0.
- An optional Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments across the year, though it doesn't lower your total costs.
Racine seniors see a big Part D shift take effect
For Racine residents managing insulin, blood thinners, cancer therapies, or other high-cost prescriptions, the change is worth understanding before your first refill of the new year.
The Part D cap, in plain English
The $2,400 figure is a hard ceiling on what you personally pay for covered drugs under Part D in 2027. It applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.
A few details to keep in mind:
- The cap counts what you pay out of pocket — deductibles, copays, and coinsurance for covered drugs.
- Monthly premiums do not count toward the $2,100 in 2026 ($2,400 in 2027).
- Drugs that aren't on your plan's formulary generally don't count either.
- The Part D deductible can be up to $700 in 2027, depending on the plan.
Once you reach $2,400, you stay at $0 for covered Part D drugs through the end of 2027. The counter resets on Jan. 1, 2028.
The "donut hole" is gone
If you've had Medicare for a while, you may remember the coverage gap, often called the donut hole — a middle phase where you paid more out of pocket after your plan's initial coverage ran out. That phase was eliminated in 2025.
Part D now has just three phases:
1. Deductible phase — you pay full negotiated cost until you meet the deductible (up to $700 in 2027). 2. Initial coverage phase — you pay copays or coinsurance until your out-of-pocket total hits $2,400. 3. Catastrophic phase — you pay $0 for covered drugs the rest of the year.
That's a much simpler structure than what Medicare had for nearly two decades.
The Medicare Prescription Payment Plan
Hitting $2,400 early in the year can still be a shock if it happens in January or February. That's where the Medicare Prescription Payment Plan comes in.
This is an optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly payments instead of paying the full amount at the pharmacy counter. You still owe the same total — the program doesn't lower your costs — but it smooths the timing.
Key points:
- You opt in through your Part D or Medicare Advantage drug plan. It isn't automatic.
- You can join before the plan year starts or during the year.
- The pharmacy charges $0 at pickup for covered drugs; your plan bills you monthly.
- It tends to help most if you have a large expected drug bill early in the year.
If your prescriptions are inexpensive and spread out, the payment plan may not add much value. Medicare has a self-check tool on medicare.gov to help you decide.
What this means during Annual Enrollment
Racine is in Racine County, where Medicare beneficiaries choose among a range of stand-alone Part D and Medicare Advantage plans available in the county. The 2027 lineup is detailed in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder. Because every plan sets its own formulary, deductible, and pharmacy network, the same medication can cost very different amounts from one plan to another — even with the same $2,400 cap in place.
That's why AEP (Oct. 15–Dec. 7) matters. It's your chance to:
- Compare how your specific drugs are covered in 2027.
- Check whether your pharmacy is still in network.
- Look at each plan's deductible and cost-sharing tiers.
- Decide whether the Prescription Payment Plan makes sense for you.
If you're already in a Medicare Advantage plan, you also have the Medicare Advantage Open Enrollment Period from Jan. 1 to March 31 to make a one-time switch.
A quick 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 added to your Part B and Part D premiums in 2026. IRMAA doesn't change the cap ($2,100 in 2026, $2,400 in 2027) — it just affects your monthly premium.
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 Racine County
(MA penetration in Racine 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”) was eliminated as of 2025 (three phases now). There's a hard yearly cap on what you pay out of pocket for covered drugs — $2,100 in 2026 and $2,400 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
Q: Does the $2,400 cap include my monthly premium?
Q: If I take only a couple of low-cost generics, will I ever reach $2,400?
Q: Do I have to sign up for the Prescription Payment Plan?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.