Medicare Part D

Part D in Jackson: Deductible, Cap, Phases 2027

# How Part D Works in 2027: The Deductible, the Cap, and the Three…

JACKSON, Wyo. — If you take prescription drugs and have Medicare, 2027 continues some of the friendliest math Part D has ever offered. There's still a deductible, still a stretch where you pay a share of costs, but once your out-of-pocket spending hits the annual cap — $2,400 in 2027 — you're done paying for covered drugs at the pharmacy counter.

That's the big picture. Here's how it actually works — and the mistakes worth avoiding as you sort through your options during this fall's enrollment window.

The three phases of Part D in 2027

Since 2025, Medicare's prescription drug benefit has three phases instead of four. The confusing "coverage gap" — the donut hole people used to dread — is gone.

Here's the flow in 2027:

1. Deductible phase. You pay the full negotiated price of your drugs until you meet your plan's deductible. The deductible maximum is $615 in 2026 and $700 in 2027. Some plans use the full amount, some use less, and some skip it entirely for certain drug tiers.

2. Initial coverage phase. After the deductible, you pay a copay or a percentage (coinsurance) for each prescription, and your plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the annual cap.

3. Catastrophic phase. Once your out-of-pocket costs reach the annual cap — $2,100 in 2026 and $2,400 in 2027 — you pay nothing for covered Part D drugs for the rest of the calendar year. That's the hard cap, and it's the piece most people are still learning about.

These figures come from CMS's Part D program rules for 2026 and 2027.

What counts toward the Part D cap

Only your out-of-pocket spending on covered Part D drugs counts — things like your deductible, copays, and coinsurance for medications on your plan's formulary. Your monthly premium does not count toward the cap. Drugs your plan doesn't cover don't count either, which is one reason it pays to check that your medications are on the plan's list before you enroll.

If you get "Extra Help" (the low-income subsidy), your costs are already lower and the cap works differently in practice, because you're paying very little to begin with.

The Medicare Prescription Payment Plan

Even with the cap ($2,100 in 2026, $2,400 in 2027), some people hit big bills early in the year — especially if one expensive drug pushes them close to the cap in January or February. To help with that cash-flow squeeze, Medicare offers the Medicare Prescription Payment Plan, an optional program that spreads your out-of-pocket drug costs across monthly payments instead of all at once at the pharmacy.

It doesn't lower what you owe overall. It just smooths it out. You can opt in through your Part D or Medicare Advantage drug plan. It's worth asking about if a large pharmacy bill would strain your budget.

A quick word on IRMAA

Most people pay just the standard Part D premium set by their plan. But if your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you'll pay an extra amount called IRMAA — the Income-Related Monthly Adjustment Amount — on top of your Part D premium in 2026. Social Security bills this separately. If your income has dropped due to retirement, divorce, or the death of a spouse, you can ask Social Security to reconsider.

What Jackson residents should know about local availability

Jackson is in Teton County, where Medicare beneficiaries can compare Part D stand-alone plans and Medicare Advantage plans that include drug coverage. The exact number of plans available changes each year, and every plan sets its own formulary, pharmacy network, and cost-sharing within the federal rules above. The Medicare Plan Finder at medicare.gov lets you enter your ZIP code and your specific medications to see how each plan would handle your prescriptions.

Wyoming's State Health Insurance Information Program (SHIIP) offers free, unbiased one-on-one help to Jackson-area residents — a good call before you enroll, not after.

Mistakes to avoid this enrollment season

• Auto-renewing without checking. Formularies and tiers change every year. A drug that sat on one tier in 2026 may land on a different tier in 2027 — check your plan's Annual Notice of Change.
• Ignoring the late enrollment penalty. If you go 63 days or more without creditable drug coverage after becoming eligible, Medicare adds a permanent penalty to your Part D premium.
• Assuming "no deductible" always wins. A plan with a deductible can still be cheaper overall depending on your specific drugs. Run your prescriptions through Plan Finder.
• Missing the deadline. The Annual Enrollment Period ends Dec. 7. After that, you generally wait until next fall unless you qualify for a Special Enrollment Period.