Medicare Part D
Madison, MS: Part D Out-of-Pocket Cap in 2027
MADISON, Miss. — Since Jan. 1, 2025, the way you pay for prescription drugs under Medicare Part D has looked different than it did before. The out-of-pocket cap on covered drugs is $2,100 in 2026 and rises to $2,400 in 2027, the old "donut hole" is gone for good, and a monthly payment option is available to anyone who wants to spread drug costs across the year.
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Key takeaways
- The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once you reach the cap on covered Part D drugs, you pay nothing more for those drugs the rest of the year, and the old "donut hole" coverage gap is gone.
- Part D has just three stages: a deductible (up to $615 in 2026 and up to $700 in 2027), initial coverage, and catastrophic coverage where you pay nothing.
- A new optional Medicare Prescription Payment Plan lets you pay $0 at the pharmacy and spread your drug costs into monthly bills instead, with no change to your total yearly cost.
- These rules apply to both stand-alone Part D plans and Medicare Advantage plans with drug coverage, so it's worth reviewing your Annual Notice of Change letter before the December 7 enrollment deadline.
If you live in Madison and take regular prescriptions — or help a parent who does — here's what the changes mean and where to get straight answers before the Dec. 7 enrollment deadline.
The Part D cap, explained simply
The out-of-pocket cap on covered Part D drugs is $2,100 in 2026 and $2,400 in 2027. Once your spending reaches that amount, you pay nothing more for those drugs for the rest of the calendar year. The cap resets each January.
This is part of the hard cap Congress created in the Inflation Reduction Act. It replaced a system where high-cost patients could pay many thousands of dollars a year, with no ceiling. The Centers for Medicare & Medicaid Services (CMS) sets the maximum Part D deductible at $615 for 2026 and $700 for 2027, though individual plans may set a lower one.
The cap applies to drugs covered by your plan's formulary. Drugs your plan doesn't cover, and Part B drugs given in a clinic, don't count toward the cap.
The coverage gap is truly gone
For years, the "donut hole" was the confusing middle phase where seniors suddenly paid more after their plan hit a spending threshold. As of 2025, that phase went away, and Part D now has just three stages:
1. Deductible (if your plan has one, up to $615 in 2026 and up to $700 in 2027) 2. Initial coverage — you pay a share of the cost until you reach the out-of-pocket cap ($2,100 in 2026, $2,400 in 2027) 3. Catastrophic — you pay nothing for covered drugs the rest of the year
That's it. No more falling into a gap, no more scrambling to figure out which phase you're in.
The Medicare Prescription Payment Plan
Here's the part many people missed last year: even with the cap, you could still owe close to $2,100 in 2026 ($2,400 in 2027) in a single month if you start an expensive drug in January.
To help with that, Medicare now offers the Medicare Prescription Payment Plan, an optional program that lets you pay $0 at the pharmacy and instead receive a monthly bill from your Part D plan. Your total yearly cost is the same — it's just spread out.
This program is voluntary. You can sign up before the plan year starts or any time during the year through your Part D or Medicare Advantage drug plan. It tends to help most if you have high drug costs early in the year. If your drug costs are low and steady, it may not change much for you.
What Madison-area readers should know
Madison is in Madison County, where Medicare plan availability — including stand-alone Part D drug plans and Medicare Advantage plans that include drug coverage — is set at the county level by CMS. That means the plans you can choose from are the same whether you live in Madison, Ridgeland, or Canton.
Every plan sold in Madison County has to honor the Part D out-of-pocket cap and offer the prescription payment plan option. Beyond that, formularies, pharmacy networks, and cost-sharing vary. The 2027 lineup is in each plan's Annual Notice of Change and on the official Plan Finder at medicare.gov/plan-compare, the tool CMS built to compare plans side by side using your actual drug list.
Deadlines to circle
- Oct. 15 – Dec. 7, 2026: Medicare Annual Enrollment Period. This is when you can join, switch, or drop a Part D or Medicare Advantage plan for 2027 coverage.
- Jan. 1, 2027: New coverage — and the $2,400 cap for 2027 — take effect.
- Jan. 1 – March 31, 2027: Medicare Advantage Open Enrollment. If you're already in a Medicare Advantage plan, you get one chance to switch to another MA plan or return to Original Medicare.
If you take prescriptions, this is the season to actually open your plan's Annual Notice of Change letter. Formularies shift every year, and the drug that was covered cheaply in 2026 may be in a different tier in 2027.
A quick FAQ
Does the cap ($2,100 in 2026, $2,400 in 2027) include my monthly premium? No. The cap is on out-of-pocket costs for covered drugs — deductibles, copays, and coinsurance. Premiums are separate.
If I sign up for the payment plan, do I pay more overall? No. You pay the same total amount for the year. The plan just splits it into monthly bills instead of large charges at the pharmacy counter.
What if I can't afford my premiums or drug costs even with the cap? Ask about Extra Help (also called the Low-Income Subsidy) through Social Security, and Mississippi's Medicare Savings Programs through the Division of Medicaid. Both can significantly reduce what you pay if you qualify.
Do these changes apply to Medicare Advantage plans too? Yes. If your Medicare Advantage plan includes drug coverage (most do), the Part D out-of-pocket cap and the payment plan option apply the same way.
Where to get personalized help
Medicare rules are national, but the right choice is personal. For free, unbiased help in Mississippi:
- Medicare.gov — official information and the Plan Finder tool
- 1-800-MEDICARE (1-800-633-4227) — 24/7 phone help
- Mississippi SHIP (State Health Insurance Assistance Program) — free one-on-one counseling for Medicare beneficiaries, reachable through the Mississippi Department of Human Services, Division of Aging and Adult Services, at 1-844-822-4622
None of these services will try to sell you a plan. They're the best starting point before you make a decision that shapes your drug costs for the whole year.
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 Madison County
(MA penetration in Madison 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 on what you pay out of pocket for covered drugs — $2,100 in 2026 and $2,400 in 2027 — 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.
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.