Medicare Part D
January 2027 Medicare Part D Changes for Gloucester Township
GLOUCESTER TOWNSHIP, N.J. — Starting January 1, 2027, no one with a Medicare Part D drug plan will pay more than $2,400 out of pocket for covered prescriptions in a calendar year. It's one of the biggest changes to how seniors pay for medicine in a generation, and it lands right in the middle of Medicare's Annual Enrollment Period, which runs through December 7.
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Click to call 855-729-3240Key takeaways
- Starting January 1, 2027, the most anyone with a Medicare Part D plan will pay out of pocket for covered prescriptions in a year is $2,400, up from $2,100 in 2026.
- The old four-phase Part D system, including the "donut hole" coverage gap, is gone for good, leaving just three phases: deductible, initial coverage, and catastrophic coverage where you pay nothing for covered drugs.
- The Medicare Prescription Payment Plan (M3P) is a free, optional program that lets you spread your yearly drug costs into monthly bills instead of paying it all at the pharmacy, but you have to sign up through your Part D plan since it isn't automatic.
- Before the Annual Enrollment Period ends December 7, it's worth reading your plan's Annual Notice of Change, checking your drugs on the Medicare Plan Finder, and asking about the payment plan if you take high-cost medications, since higher earners may also owe an IRMAA surcharge on their premium.
For people in Gloucester Township — and anyone else weighing their drug coverage this fall — here's what the new rules actually do, and what to check before enrollment closes.
The Part D cap, in plain English
Under the Inflation Reduction Act, Medicare Part D has a true annual out-of-pocket limit. In 2026, that limit is $2,100. For 2027, it rises to $2,400, according to CMS.
Once your out-of-pocket spending on covered Part D drugs reaches $2,400 in a calendar year, you pay $0 for covered prescriptions for the rest of that year. That cap applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan.
A few things to know:
- The $2,400 counts what you pay for covered drugs — deductibles, copays, and coinsurance.
- Monthly premiums do not count toward the cap.
- Drugs your plan doesn't cover don't count either. That's why the plan's formulary still matters.
The "donut hole" is gone
For years, Part D had four confusing phases, including the dreaded coverage gap — the "donut hole" — where costs jumped in the middle of the year. That phase was eliminated in 2025 and stays gone in 2027.
Part D now has just three phases: 1. Deductible — up to $700 in 2027 (plans can set a lower deductible, or none at all). 2. Initial coverage — you pay a share of the cost until you hit $2,400 out of pocket. 3. Catastrophic coverage — you pay $0 for covered drugs the rest of the year.
That's it. No more re-entering a gap, no more math to figure out which phase you're in.
The Medicare Prescription Payment Plan
Even with the $2,400 cap, a bad month can still hurt — especially if you fill an expensive specialty drug in January and get hit with a big bill up front.
That's why Medicare offers the Medicare Prescription Payment Plan, sometimes called "M3P." It's free and optional. Instead of paying the pharmacy at the counter, you get a monthly bill from your Part D plan that spreads your yearly drug costs across the remaining months of the year.
Key points from Medicare.gov:
- You still pay the same total for the year — the payment plan smooths costs, it doesn't lower them.
- You can sign up before the plan year starts or any time during the year.
- It works best for people with high drug costs early in the year, or with one very expensive prescription.
- If you rarely hit your deductible, this program may not help much.
You have to opt in — it isn't automatic. Your Part D plan handles the sign-up.
What Gloucester Township residents should check this AEP
Gloucester Township is in Camden County, where Medicare beneficiaries have a broad choice of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. The number of plans, the drugs each plan covers, and the pharmacies in each network are set at the county level and can change from year to year. The 2027 lineup is detailed in each plan's Annual Notice of Change and on Medicare.gov's Plan Finder.
Before December 7, it's worth doing three things: 1. Read your plan's Annual Notice of Change (ANOC). Your 2027 plan may cover different drugs, use different tiers, or use a different pharmacy network than it did in 2026. 2. Run your drug list through the Plan Finder at medicare.gov. It shows your estimated yearly cost under each plan, based on the medications you actually take. 3. Ask about the payment plan if you take high-cost drugs. Not every plan explains it clearly up front.
A note on higher-income enrollees
If your income is above $109,000 as a single filer (or $218,000 filing jointly), you'll pay an IRMAA surcharge on top of your Part D premium in 2026. Income is generally based on your 2024 tax return. This doesn't change the cap ($2,100 in 2026, $2,400 in 2027) — it only affects your monthly premium.
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 Camden County
(MA penetration in Camden 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 $2,100 cap include my insulin or vaccines?
If I hit $2,400 in June, do I really pay nothing the rest of the year?
Do I have to sign up for the payment plan every year?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.