Medicare Part D
$2,100: the new Part D out-of-pocket limit for Pearl City
PEARL CITY, Hawaii — On January 1, 2026, Medicare Part D did something it had never done before: it put a firm annual limit on what you pay out of pocket for your covered prescription drugs. For 2027, that limit is $2,400. Once you hit it, your covered Part D medications cost you nothing for the rest of the calendar year.
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Key takeaways
- Starting January 1, 2027, Medicare Part D caps your out-of-pocket drug costs at $2,400 for the year, up from $2,100 in 2026 and the first-ever $2,000 cap set in 2025.
- The year has three phases now: you pay 100% until you hit your deductible (up to $700 in 2027), then a copay or coinsurance, then nothing once you reach the $2,400 cap.
- The old coverage gap, known as the donut hole, is gone for good, so there's no more sudden jump in costs partway through the year.
- The Medicare Prescription Payment Plan is a free, optional program that lets you spread your Part D costs into monthly payments instead of paying it all at the pharmacy at once.
For Pearl City residents who take expensive medications — whether for cancer, diabetes, heart conditions, or autoimmune disease — this is one of the biggest changes to Medicare in a generation. Here's what it means, and what you can do during Open Enrollment (October 15 – December 7) to be ready.
The $2,100 cap, in plain English
Before 2025, there was no cap on Part D out-of-pocket spending. People with high-cost drugs could pay thousands of dollars a year with no ceiling. In 2025, Medicare set the first-ever cap at $2,000. It rose to $2,100 in 2026, and for 2027 it rises to $2,400, according to CMS.
Here's how the year works under the new rules:
1. Deductible phase. You pay 100% of your drug costs until you meet your plan's deductible. The maximum allowed deductible for 2027 is $700, though some plans set it lower. 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 $2,400, you pay nothing for covered Part D drugs for the rest of the year.
That's it. Three phases. No more confusing fourth stage.
The "donut hole" is gone
If you've been on Medicare for a while, you probably remember the coverage gap, better known as the donut hole. It was the middle stretch where your drug costs suddenly jumped after you and your plan had spent a certain amount together.
That gap was eliminated in 2025 and remains gone in 2027. There is no longer a phase where your share of drug costs suddenly spikes. If someone at a kitchen table in Pearl City is still worried about "falling into the donut hole," you can reassure them: that phase no longer exists.
The Medicare Prescription Payment Plan: spreading the cost out
Hitting $2,400 sounds manageable over a full year — but what if most of your drug costs land in January and February? For people on high-cost specialty medications, that early-year bill can be brutal.
That's what the Medicare Prescription Payment Plan is for. It's a free, optional program that lets you spread your out-of-pocket Part D costs across the calendar year in monthly payments, instead of paying the pharmacy all at once.
A few things to know:
- It doesn't lower your total costs — it just smooths them out.
- You still owe the same amount by year-end; you just pay your plan monthly instead of paying the pharmacy at the counter.
- You can opt in before the year starts or during the year. Sign-up is done through your Part D plan.
- It tends to help most if you have predictable high drug costs early in the year.
If you've ever had to choose between a prescription and a utility bill in January, this program is worth asking about.
What Pearl City residents should check during Open Enrollment
Pearl City is in Honolulu County, where Medicare beneficiaries have a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Availability, formularies (the list of covered drugs), and pharmacy networks are set at the county level and can change every year.
A few things worth reviewing between now and December 7:
- Your drug list. Make sure every medication you take is still on your plan's formulary for 2027.
- Your pharmacy. Preferred pharmacies can change. A drug that's cheap at one pharmacy may cost more at another, even under the same plan.
- Your Annual Notice of Change (ANOC). Every plan mailed one in September. It shows what's changing for 2027.
- Whether the Payment Plan makes sense for you. If your drugs are expensive and front-loaded, ask your plan how to enroll.
You can compare plans on the official Plan Finder at medicare.gov, or get free one-on-one help from Hawaii SHIP (the State Health Insurance Assistance Program).
A note on higher incomes and IRMAA
If your income is above $109,000 as a single filer (or $218,000 filing jointly) in 2026, you may pay an IRMAA surcharge on top of your Part B and Part D premiums. IRMAA is based on your tax return from two years ago. It does not change the $2,100 drug cap — but it does affect your monthly premium costs.
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 Honolulu County
(MA penetration in Honolulu 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). For 2027, there’s a hard yearly cap of $2,400 on what you pay out of pocket for covered drugs, 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
Does the $2,400 cap include my monthly plan premium?
What if my drug isn't on my plan's formulary?
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.