Medicare Part D

$2,400 Part D Cap in 2027: Elizabeth, NJ

ELIZABETH, N.J. — Starting Jan. 1, 2027, people with Medicare drug coverage will hit a firm ceiling on what they pay out of pocket for prescriptions: $2,400 for the year. For Elizabeth residents who have juggled high pharmacy bills, especially for brand-name or specialty drugs, this is one of the biggest Medicare changes in years — and it takes effect right after Annual Enrollment, which runs through Dec. 7.

Here's a plain-language look at what the new cap means, how the old "donut hole" fits in, and a new monthly payment option that could help smooth big pharmacy bills across the year.

What the Part D cap actually covers

The cap applies to your out-of-pocket spending on covered prescription drugs under Medicare Part D. That includes standalone Part D plans and the drug coverage built into most Medicare Advantage plans.

Once your out-of-pocket spending on covered drugs reaches $2,100 in 2026, you pay $0 for the rest of the year on those covered prescriptions. The cap does not apply to drugs Part D doesn't cover, or to medications given in a doctor's office (those usually fall under Part B).

For context, the maximum Part D deductible in 2026 is $615, though many plans set theirs lower. Source: CMS — Medicare Part D program rules.

The "donut hole" is gone

For years, Medicare drug coverage had four 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 both 2026 and 2027, Part D has just three phases:

1. Deductible — you pay full negotiated cost until you meet the plan's deductible (up to $615 in 2026; up to $700 in 2027). 2. Initial coverage — you pay a copay or coinsurance for each prescription. 3. Catastrophic — once your out-of-pocket total hits the yearly cap ($2,100 in 2026; $2,400 in 2027), you pay nothing more for covered drugs the rest of the year.

Simpler math, fewer surprises.

The Medicare Prescription Payment Plan

Here's the piece a lot of people in Union County are still learning about: even with the yearly cap, you could hit it in a single month if you take an expensive drug. The pharmacy bill on Day 1 could still be big.

That's where the Medicare Prescription Payment Plan comes in. It's a free, optional program that lets you spread your out-of-pocket drug costs across the calendar year in monthly payments instead of paying the pharmacy all at once.

A few things to know:

• You still owe the same total. It doesn't lower what you pay — it just changes when you pay it.
• You pay Medicare (through your plan), not the pharmacy, once you're enrolled.
• You can opt in before the year starts or any month during the year.
• It tends to help most if you have high drug costs early in the year.

You sign up through your Part D or Medicare Advantage drug plan, not through Medicare directly.

How to decide during Annual Enrollment

Annual Enrollment runs Oct. 15 through Dec. 7, 2026, for coverage that starts Jan. 1, 2027. Elizabeth is in Union County, where Medicare beneficiaries have a range of standalone Part D and Medicare Advantage plans to compare. Availability is set at the county level, so two neighbors on the same block will see the same plan options. For the 2027 lineup, check each plan's Annual Notice of Change and Medicare.gov's Plan Finder.

A few questions worth asking before Dec. 7:

• Are my prescriptions on the plan's formulary in 2027? Drug lists change every year.
• Which pharmacies are "preferred"? Costs can differ at CVS on Elmora Avenue versus a pharmacy across the city line.
• Would monthly smoothing help me? If you take a high-cost drug, ask about the Prescription Payment Plan.
• Does my income trigger IRMAA? In 2026, Part D and Part B surcharges kick in for single filers with income above $109,000.

If you miss Dec. 7 and you're in a Medicare Advantage plan, you get one more window: Medicare Advantage Open Enrollment, Jan. 1 – March 31, when you can switch Advantage plans or return to Original Medicare.

Where to get personal help in Elizabeth

The rules are national, but the right choice is personal. Free, unbiased help is available:

• Medicare.gov — the official plan finder and drug pricing tool.
• 1-800-MEDICARE (1-800-633-4227), 24/7.
• New Jersey SHIP (State Health Insurance Assistance Program) — free one-on-one counseling for New Jersey Medicare beneficiaries. Call 1-800-792-8820.