Medicare Part D

Brooklyn Center MN Medicare Drug Cap 2027

Brooklyn Center, Minn. — On Jan. 1, 2026, Medicare Part D did something it had never done before: put a firm ceiling on what you pay out of pocket for covered prescription drugs. That ceiling was $2,100 in 2026 and rises to $2,400 in 2027. Once you hit it, you pay nothing for your covered medications for the rest of the calendar year.

This is one of the biggest shifts in Medicare drug coverage in nearly two decades, and it lands right in the middle of Fall Open Enrollment (Oct. 15 – Dec. 7). Here is what has actually changed, and what to watch out for so you do not make a costly mistake.

The Part D cap, in plain English

In 2027, no one enrolled in a Medicare Part D plan — whether it is a stand-alone drug plan or a Medicare Advantage plan that includes drug coverage — will pay more than $2,400 out of pocket for covered prescriptions in a calendar year.

A few important details from CMS:

• The $2,100 in 2026 ($2,400 in 2027) counts only what you pay for covered drugs (deductible and copays or coinsurance at the pharmacy).
• Your monthly plan premium does not count toward the cap.
• Drugs your plan does not cover (not on the formulary) do not count either.
• The cap resets on Jan. 1, 2028.

The Part D annual deductible can be as high as $700 in 2027 (it was $615 in 2026), but plans can set it lower. After the deductible, you move into cost-sharing until you hit the yearly cap — then you are done paying for the year.

The "donut hole" is gone — really gone

For years, the toughest part of Part D was the coverage gap, nicknamed the "donut hole." You would hit a middle stretch where your drug costs suddenly jumped, and many people simply stopped filling prescriptions when they got there.

That gap was eliminated in 2025. In 2027, Part D has just three phases:

1. Deductible — you pay full negotiated price until you meet it (up to $700 in 2027). 2. Initial coverage — you pay a copay or coinsurance, plan pays the rest. 3. Catastrophic coverage — once your out-of-pocket spending hits $2,400 in 2027, you pay nothing for covered drugs the rest of the year.

If you have been budgeting around the old donut hole, throw that math out. The rules are simpler now.

The Medicare Prescription Payment Plan: smoothing, not saving

Here is the piece a lot of people miss. Even with the cap ($2,100 in 2026, $2,400 in 2027), some folks — especially those on expensive specialty medications — can hit big pharmacy bills in the first month or two of the year.

To help with that, Medicare now offers the Medicare Prescription Payment Plan (sometimes called "M3P" or drug cost smoothing). It is optional and free to join. Instead of paying the pharmacy at pickup, you spread your yearly out-of-pocket drug costs across monthly bills from your plan.

A few things to understand before you opt in:

• It does not lower your total drug costs. It only changes when you pay.
• If you owe a lot early in the year, your monthly bills will start higher and taper down.
• You still have to pay the bills. If you miss payments, you can be removed from the program.
• It may not make sense for everyone — especially if your drug costs are low and predictable.

Every Part D plan is required to offer it. You can sign up before the plan year starts or any month during the year by contacting your plan.

What this means during Open Enrollment

Brooklyn Center is in Hennepin County, where residents can choose from 22 Medicare Advantage plans from 6 carriers for 2027 (down from 32 plans in 2026) during Annual Enrollment (Oct. 15 – Dec. 7). Of those, 16 plans are continuing, 6 are new, 13 are not returning, and 3 have been renamed; 6 continuing plans change something in their terms. Because the drug benefit rules continue to shift at the program level, every plan has reworked its formularies, tiers, and premiums for 2027.

That means the plan that worked well for you in 2026 may look different in 2027 — different covered drugs, different tier placements, different premiums. It is worth using Medicare's Plan Finder at medicare.gov to run your specific list of prescriptions through the tool before you decide.

Common mistakes to avoid

• Assuming your plan stays the same. Read your Annual Notice of Change (ANOC), the letter your plan sent in September.
• Confusing the cap with a discount. The $2,100 in 2026 ($2,400 in 2027) is a spending ceiling, not a coupon. You still pay along the way until you reach it.
• Signing up for the payment plan without doing the math. Smoothing helps some people and hurts others. If you rarely fill prescriptions, it may just mean monthly bills for no reason.
• Forgetting IRMAA. If your 2024 income was above $109,000 (single) or $218,000 (joint), you may pay an income-related surcharge on Part B and Part D premiums in 2026. This is separate from the cap ($2,100 in 2026, $2,400 in 2027).