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Medicare Part D

Medicare Part D Phases in Union City, NJ 2027

UNION CITY, N.J. — If you take prescription drugs and rely on Medicare, 2027 brings a change worth understanding before you fill your next prescription. Medicare Part D — the part of Medicare that helps pay for prescription drugs — now works in three phases, with a yearly cap on what you pay out of pocket.

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2027 DRUG LIST ALERT

Will your prescriptions still be covered in 2027?

Part D plans rewrite their drug lists every year — tiers move, pharmacies change, drugs drop off. One call checks your exact medications against the 2027 plans in your area.

  • Every prescription checked, name by name
  • Your pharmacy checked for preferred pricing

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Prescription bottles on table in Union City — illustrating this Medicare guide
Photo: Nathan Anderson Photo by Nathan Anderson on Unsplash

Key takeaways

  • The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once you reach it, you pay $0 for covered prescriptions for the rest of the calendar year.
  • Part D now works in three phases—deductible, initial coverage, and catastrophic—since the "donut hole" coverage gap was eliminated in 2025.
  • The maximum Part D deductible is $615 in 2026 and $700 in 2027, though some plans charge less or nothing.
  • Higher-income enrollees pay an extra IRMAA amount directly to Medicare, which in 2026 starts for single filers with income above $109,000 based on 2024 tax returns.

Here's a plain-language walk-through of how Part D works, what the numbers mean, and where to go for help.

The big headline: a yearly out-of-pocket cap

The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027. Once your out-of-pocket spending on covered drugs reaches that amount, you pay $0 for covered prescriptions for the rest of the calendar year.

This cap applies whether you get Part D through a stand-alone drug plan (PDP) or through a Medicare Advantage plan that includes drug coverage (MAPD). It resets every January 1.

The deductible: up to $700 in 2027

Part D plans can charge a yearly deductible before drug coverage kicks in. The maximum allowed deductible is $615 in 2026 and $700 in 2027. Plans can charge less than that — or nothing at all — but no Part D plan can charge more.

Some plans apply the deductible only to certain drug tiers, so it's worth checking your plan's Summary of Benefits to see what applies to your prescriptions.

Say goodbye to the "donut hole": Part D now has three phases

You may remember the old "donut hole" — a coverage gap where costs spiked in the middle of the year. That gap was eliminated in 2025. Part D has just three phases:

1. Deductible phase. You pay 100% of your drug costs until you meet your plan's deductible (up to $615 in 2026 and $700 in 2027). If your plan has no deductible, you skip this phase.

2. Initial coverage phase. You pay a copay or coinsurance for each prescription, and your plan pays the rest. You stay in this phase until your out-of-pocket spending reaches the yearly cap ($2,100 in 2026, $2,400 in 2027).

3. Catastrophic phase. Once you hit the yearly cap, you pay $0 for the rest of the year on covered drugs.

That's it. No more confusing gap, no more sudden jump in what you owe mid-year.

The Medicare Prescription Payment Plan: smoothing costs month to month

New in recent years and continuing in 2027 is the Medicare Prescription Payment Plan, sometimes called "M3P." It's optional and free to join. Instead of paying a large amount at the pharmacy counter — say, if you hit a big copay early in the year — you can spread your out-of-pocket drug costs across monthly bills for the rest of the calendar year.

It doesn't lower what you owe overall. It just changes when you pay. For people who take expensive medications early in the year, that predictability can help with budgeting. You sign up through your Part D plan.

What about higher-income enrollees? IRMAA

If your income is above certain levels, you pay an extra amount on top of your Part D premium called the Income-Related Monthly Adjustment Amount (IRMAA). In 2026, IRMAA begins for single filers with income above $109,000 (based on your 2024 tax return). Married couples filing jointly have a higher threshold.

IRMAA is paid directly to Medicare, not to your drug plan.

Availability in the Union City area

Union City is in Hudson County, where Medicare beneficiaries have a wide range of stand-alone Part D and Medicare Advantage prescription drug plans to choose from during enrollment. In 2027, Hudson County has 46 Medicare Advantage plans from 9 carriers, compared with 48 plans from 10 carriers in 2026. Specific plan options and their costs change each year, so the plan you had in 2026 may look different in 2027 — even if the name is the same. Always review your plan's Annual Notice of Change (ANOC), which arrives in late September.

Key dates to remember

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.

$0$50$100$150$200200820122016202020242026

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 Hudson County

55% are on Medicare Advantage
(MA penetration in Hudson County)
55%
45%
Medicare Advantage Medicare Supplement (Medigap) Original Medicare only
U.S. average

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 in 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.

Phase 1
Deductible
You pay full price for covered drugs until you meet your plan's deductible (no more than $615 in 2026).
Phase 2
Initial coverage
You and your plan share costs through copays or coinsurance.
Phase 3
Catastrophic coverage
Once your out-of-pocket drug spending hits $2,100 in 2026 ($2,400 in 2027), you pay nothing more for covered drugs for the rest of the year.

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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.

$3,000
$2,100 cap
$1,211estimated out-of-pocket
$0saved by the cap

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

JFMAMJJASOND
October 15 – December 7 — anyone with Medicare can join, switch, or drop a Medicare Advantage or Part D plan. Changes take effect January 1.

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

Q: Does the $2,100 cap include my monthly premium?
No. The cap counts what you pay out of pocket for covered drugs — deductible, copays, and coinsurance. Your monthly plan premium doesn't count toward it.
Q: What if my drug isn't on my plan's formulary?
If a drug isn't on your plan's list of covered drugs, what you pay for it typically doesn't count toward the cap. You can ask your plan for an exception, or talk to your doctor about a covered alternative.
Q: I take insulin. Are there separate rules?
Yes. Under current Medicare rules, a month's supply of each covered insulin product is capped at $35, with no deductible. That's separate from — and in addition to — the broader Part D structure.
Sources & further reading
  • CMS — Medicare Part D program rules (medicare.gov)

For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.

Part D drug lists change for 2027 — check your prescriptionsCall