Medicare Part D

Part D in Mobile: $2,400 Cap for 2027

Mobile, Ala. — Starting Jan. 1, 2027, the way Medicare pays for prescription drugs continues to look different than it did just two years ago. The most important feature for people on Medicare in Mobile: a hard, annual cap on what you pay out of pocket for covered Part D drugs.

Here's a plain-language guide to how the cap works, what happened to the old "donut hole," and the monthly payment option that can spread your drug costs across the year.

The out-of-pocket cap, explained

In 2027, once you have spent $2,400 out of pocket on covered Part D prescription drugs, you pay nothing for the rest of the calendar year on those drugs. (The same cap was $2,100 in 2026.) The limit is set by Medicare and applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.

A few things to keep in mind:

• The cap only counts money you spend on drugs that are covered by your plan's formulary.
• Premiums do not count toward the cap.
• The cap resets every Jan. 1.
• The Part D deductible can be no higher than $615 in 2026 and no higher than $700 in 2027, though individual plans may set it lower.

Source: CMS — Medicare Part D program rules (medicare.gov).

The old "donut hole" is gone

For years, Part D had a confusing middle stage called the coverage gap, or "donut hole," where your share of drug costs jumped after you hit a certain spending level. That stage was eliminated in 2025.

Part D now has three straightforward phases:

1. Deductible phase — you pay the full negotiated price until you meet your plan's deductible (up to $615 in 2026 and up to $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 more for covered drugs the rest of the year.

No more surprise jump in the middle of the year. That's the biggest structural change for people who take costly medications.

The Medicare Prescription Payment Plan

Even with the annual cap, hitting that number in January or February can hurt if you fill an expensive prescription early in the year. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program. Instead of paying the pharmacy a large amount at pickup, you can choose to spread your out-of-pocket drug costs across the remaining months of the calendar year in monthly bills from your plan.

A few points worth knowing:

• It doesn't lower your total drug costs — it just smooths the timing.
• You still owe the same amount by year's end; it's just split into monthly payments.
• You can opt in before the plan year starts or at any point during the year.
• If you miss a monthly payment, you can be removed from the program, though you'd still keep your drug coverage.

For people on a fixed monthly budget, especially those juggling several prescriptions, the payment plan can make cash flow more predictable.

What this means in Mobile

Mobile is in Mobile County, where Medicare beneficiaries have a range of stand-alone Part D plans and Medicare Advantage plans with drug coverage to choose from during the Annual Enrollment Period. For 2027, Mobile County has 71 Medicare Advantage plans from 8 carriers. The out-of-pocket cap and the payment plan option apply to all of them — this is a federal rule, not a plan-by-plan perk.

If you take expensive brand-name drugs, the cap could be the single biggest change to your yearly budget in a long time. If you take mostly low-cost generics, you may never come close to the cap, but the elimination of the donut hole still simplifies how your costs are calculated.

How to decide what to do this fall

The Annual Enrollment Period runs Oct. 15 through Dec. 7 each year. Any changes you make take effect Jan. 1. If you're already in a Medicare Advantage plan, you also have a second window — the Medicare Advantage Open Enrollment Period — from Jan. 1 through March 31.

When comparing drug coverage for 2027, focus on:

• Whether your specific drugs are on the plan's formulary.
• What tier your drugs fall into and the cost-sharing at each tier.
• Which pharmacies in Mobile the plan considers preferred.
• The plan's deductible (anywhere from nothing up to $700 in 2027).
• Whether you want to enroll in the Prescription Payment Plan for 2027.

The Plan Finder tool at medicare.gov lets you enter your drug list and ZIP code to see how different plans would handle your prescriptions.

One note on income: IRMAA surcharges, which raise your Part B and Part D premiums, begin above $109,000 in income for a single filer in 2026. If your income has changed recently, that's worth reviewing too.