Medicare Part D

$2,100: Lincoln's New Medicare Part D Out-of-Pocket Cap

LINCOLN, Neb. — Starting January 1, 2027, Medicare Part D will cap what most enrollees pay out of pocket for covered prescription drugs at $2,400 for the year. The cap rose from $2,100 in 2026, and the change lands right as Lincoln-area seniors are choosing coverage during Annual Enrollment, which runs through December 7.

For people who take expensive medications, the shift matters. The old "donut hole" is gone, the yearly ceiling is firm, and there's a new way to spread drug costs across the calendar year instead of paying them in one painful lump.

Here's a plain-English guide to what's changing — and what stays the same.

The $2,100 cap, in plain English

Under 2027 rules from the Centers for Medicare & Medicaid Services (CMS), once you spend $2,400 out of pocket on covered Part D drugs in a calendar year, you pay nothing more for the rest of the year on those drugs. That's the ceiling. It resets each January.

A few practical notes:

• The cap applies to your out-of-pocket spending on covered drugs — deductibles and copays count toward it. Monthly premiums do not.
• It applies whether your Part D coverage comes as a standalone drug plan or is built into a Medicare Advantage plan.
• Drugs your plan doesn't cover don't count toward the cap.

The Part D deductible can be no higher than $615 in 2026 and $700 in 2027, though plans can set it lower.

The coverage gap is officially over

If you've been on Medicare for a while, you probably remember the "donut hole" — a middle phase where you suddenly paid more once your drug spending hit a certain level. That phase was eliminated in 2025.

For 2027, Part D has just three phases:

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

No more surprise jump in costs partway through the year. That predictability is the whole point of the redesign.

The Medicare Prescription Payment Plan

Hitting a $2,400 ceiling is good news at year-end. But what if a big pharmacy bill lands in February? That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program offered through every Part D plan. Instead of paying the pharmacy directly at the counter, you pay $0 at pickup and your Part D plan sends you a monthly bill that spreads your drug costs across the remaining months of the year.

Key things to know:

• It doesn't lower your total drug costs — it just smooths them out.
• It's most useful for people with high drug costs early in the year.
• You can opt in before the plan year starts or any month during the year by contacting your Part D plan.

If cash flow is tight in certain months, this is worth asking your plan about.

What this means during Lincoln's enrollment season

Lincoln is in Lancaster County, where Medicare beneficiaries can choose among a range of standalone Part D plans and Medicare Advantage plans with drug coverage. For 2027, the county has 37 Medicare Advantage plans from 9 carriers, with 18 new plans, 18 not returning, and 4 renamed. The new $2,400 cap and the three-phase structure apply across all Part D coverage nationwide — but premiums, formularies (the list of covered drugs), and pharmacy networks still vary plan by plan.

That's why Annual Enrollment (October 15 – December 7) matters even in a year with big federal changes. Two things worth checking before December 7:

• Is every drug you take still on your plan's formulary for 2027?
• Are your preferred Lincoln-area pharmacies still in-network?

If you're in a Medicare Advantage plan and want to switch after January 1, the Medicare Advantage Open Enrollment Period runs January 1 – March 31.

A quick word on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 married filing jointly) based on your 2024 tax return, you'll pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part D premium in 2026. IRMAA doesn't change the $2,100 cap — it just affects your monthly premium.