Medicare Part D
Germantown MD Part D 2027: $2,400 Cap
Starting Jan. 1, 2027, the way Medicare covers prescription drugs continues to evolve. The headline figure: a hard $2,400 cap on what you pay out of pocket for covered Part D drugs in a calendar year. Once you hit that number, you pay nothing more for covered prescriptions for the rest of the year.
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Key takeaways
- Starting Jan. 1, 2027, Medicare Part D has a hard $2,400 cap on what you pay out of pocket for covered drugs each year, up from $2,100 in 2026.
- Once you reach that $2,400 cap, you pay nothing more for covered prescriptions for the rest of the year.
- The old "donut hole" coverage gap is gone, leaving just three payment phases: deductible, initial coverage, and catastrophic.
- A new optional Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly installments instead of paying it all at once at the pharmacy.
Germantown, Md. — A big shift in how you pay for prescriptions
For Germantown residents comparing coverage during the Annual Enrollment Period — Oct. 15 through Dec. 7, 2026 — this is one of the most important updates to understand before making a decision for 2027.
The Part D out-of-pocket cap, in plain English
Here is how the cap works, according to CMS Part D program rules:
- The cap applies to your out-of-pocket spending on covered Part D drugs — things like deductibles and copays or coinsurance at the pharmacy.
- Monthly Part D premiums do not count toward the cap.
- Drugs not on your plan's formulary, and most Part B drugs (like many drugs given in a doctor's office), do not count either.
- The cap resets each January.
The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. The Part D maximum deductible is $615 in 2026 and $700 in 2027, though many plans set theirs lower.
The "donut hole" is gone — here's what replaced it
For years, Part D had four payment phases, including a confusing middle stretch called the coverage gap, or "donut hole," where costs could jump unexpectedly.
That gap was eliminated in 2025. In 2027, there are still just three phases:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (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 $2,400 in 2027, you pay nothing more for covered drugs the rest of the year.
No more surprise price spike halfway through the year. That is the biggest structural change most people will feel.
The Medicare Prescription Payment Plan: spreading costs over the year
Hitting $2,400 in January or February can still be a shock if you take an expensive specialty drug. That's why Medicare offers the Medicare Prescription Payment Plan — an optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying the pharmacy all at once.
A few things to know:
- It is free to join, but it does not lower your total costs — it just smooths them out.
- You still owe the same amount by year's end; you just pay the plan monthly instead of the pharmacy at pickup.
- You can sign up before the plan year begins or any month during the year.
- It tends to help most if you have high drug costs early in the year. If your prescriptions are inexpensive, it may add paperwork without much benefit.
You opt in through your Part D or Medicare Advantage drug plan, not through Medicare directly.
What this means during Annual Enrollment
Germantown is in Montgomery County, where a range of stand-alone Part D plans and Medicare Advantage plans with drug coverage are offered each year. The exact plans and their prices change annually, so even if you liked your coverage in 2026, it is worth checking your Annual Notice of Change letter for 2027. The full 2027 lineup is detailed in each plan's ANOC and on Medicare.gov's Plan Finder.
A few tips as you compare:
- Look at the full year's projected drug cost, not just the monthly premium.
- Confirm each of your prescriptions is on the plan's formulary.
- Check the pharmacy network — a preferred pharmacy can matter more than the sticker price of the plan.
- If your income is above $109,000 (single filer, 2026), be aware IRMAA surcharges may apply to your Part B and Part D premiums.
If you miss the Dec. 7 deadline and are in a Medicare Advantage plan, you still have the Medicare Advantage Open Enrollment Period from Jan. 1 to March 31 to make one change.
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 Montgomery County
(MA penetration in Montgomery 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 of $2,400 in 2027 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 premium?
If I join the Prescription Payment Plan, will I save money?
What happens if I don't take expensive drugs? Does any of this matter?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.