Medicare Part D

How the 2026 Part D changes affect Lafayette Medicare enrollees

Lafayette, Colorado — The Part D out-of-pocket cap that began on January 1, 2026 continues in 2027 at a higher amount. The cap is $2,100 in 2026 and $2,400 in 2027. Once you reach the cap on covered drugs in a calendar year, you pay nothing more for the rest of the year, whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.

For Lafayette residents comparing coverage during the Annual Enrollment Period — October 15 through December 7, 2026, for coverage that starts January 1, 2027 — this is one of the biggest reasons to take a fresh look at your plan. Here is what changed, and how to think it through.

The Part D out-of-pocket cap, in plain language

Before 2024, there was no yearly limit on what you could spend on Part D drugs. People with serious illnesses sometimes paid tens of thousands of dollars a year. Congress changed that through the Inflation Reduction Act.

In 2027, once your out-of-pocket spending on covered Part D drugs reaches $2,400, you move into "catastrophic coverage" and pay nothing more for covered drugs for the rest of the year. The cap resets each January 1.

A few important details from Medicare:

• The $2,400 only counts what you pay for covered drugs — including your deductible and copays.
• Premiums do not count toward the cap.
• Drugs your plan does not cover do not count toward the cap.
• The maximum Part D deductible any plan can charge is $615 for 2026 and $700 for 2027. Some plans set it lower.

The "donut hole" is gone

If you have been on Medicare for a while, you probably remember the coverage gap — the "donut hole" — where costs jumped in the middle of the year. That phase was eliminated in 2025 and stays gone in 2027.

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 for 2026 and $700 for 2027). 2. Initial coverage phase — you pay a copay or coinsurance for each drug. 3. Catastrophic phase — once your out-of-pocket spending reaches the yearly cap ($2,100 in 2026, $2,400 in 2027), you pay nothing more for covered drugs.

No more surprise middle stage. That is a real simplification, and it is worth understanding before you compare plans.

The Medicare Prescription Payment Plan

Reaching the yearly cap is helpful — but what if a big bill lands in January? That is where the Medicare Prescription Payment Plan comes in. It is sometimes called "M3P" or "drug cost smoothing."

Here is how it works:

• You opt in through your Part D or Medicare Advantage drug plan (it is free to join).
• Instead of paying the pharmacy at the counter, your plan bills you monthly.
• Your total yearly cost is the same — you are just spreading it out over the calendar year.

This can help if you take an expensive medication early in the year and would rather pay $175 a month than $600 at once in February. It will not help if your drug costs are low and steady. And if you sign up mid-year, your monthly payments will be higher because they are spread over fewer months.

You can call your plan directly to enroll, or ask about it during Annual Enrollment.

What this means for people in Lafayette

Lafayette is in Boulder County, where Medicare beneficiaries choose from a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. The yearly cap and the payment plan option apply to all Part D coverage, no matter which plan you pick. For the 2027 lineup of plans and carriers available locally, check each plan's Annual Notice of Change and Medicare.gov's Plan Finder. Plans still differ in their formularies (which drugs they cover), pharmacy networks, deductibles, and copays.

That is why comparing coverage every fall matters. A plan that worked well in 2026 may cover your drugs differently in 2027.

How to decide during Annual Enrollment

A few practical steps before December 7:

• Make a current list of every prescription, dose, and how often you take it.
• Use the Plan Finder at medicare.gov to see how each available plan would handle your specific drug list in 2027.
• Check the pharmacy you use — in-network status changes.
• Think about smoothing. If any of your drugs are expensive, ask whether the Prescription Payment Plan makes sense for your budget.
• Watch your income. If your income is above $109,000 (single) or $218,000 (joint) in 2026, IRMAA surcharges may add to your Part D premium.

If you want unbiased, one-on-one help, Colorado's State Health Insurance Assistance Program (SHIP) offers free counseling. You can also call 1-800-MEDICARE (1-800-633-4227), 24 hours a day.