Medicare Part D

Durham Part D Payment Plan Guide for 2027

DURHAM, N.C. — Starting January 1, 2027, no one with a Medicare Part D plan will pay more than $2,400 out of pocket for covered prescription drugs in a calendar year. It's one of the biggest shifts Part D has seen in years, and if you take expensive medications, it changes how you should think about the fall enrollment season that runs through December 7.

Here's a plain-English guide to what's new, what's gone, and one option that could smooth out your monthly costs.

The out-of-pocket cap, in plain terms

In 2027, Medicare has set a hard ceiling on what you pay out of pocket for prescription drugs covered by your Part D plan: $2,400. Once your spending on covered drugs reaches that amount, you pay nothing for the rest of the year on those medications.

A few things worth knowing:

• The cap applies to your out-of-pocket costs on covered drugs — deductibles, copays, and coinsurance count toward it.
• 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 (its drug list) still matters.
• The cap resets every January 1.

This rule comes from the Inflation Reduction Act and is administered through CMS Part D program rules. It applies whether your drug coverage comes through a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.

Goodbye, "donut hole"

If you've been on Medicare for a while, you probably remember the coverage gap — the middle stretch where your share of drug costs jumped once you and your plan had spent a certain amount. That gap was eliminated in 2025.

Part D now has just three phases:

1. Deductible phase — you pay full negotiated price until you meet the plan's deductible (up to a maximum of $615 in 2026). 2. Initial coverage phase — you pay copays or coinsurance until your out-of-pocket spending hits $2,100 in 2026 ($2,400 in 2027). 3. Catastrophic phase — you pay $0 for covered drugs the rest of the year.

No more donut hole math. No more sticker shock in the middle of the year.

The Medicare Prescription Payment Plan

Even with a cap ($2,100 in 2026, $2,400 in 2027), hitting that number in January or February can still hurt. That's why Medicare offers the Medicare Prescription Payment Plan — sometimes called "M3P" or drug cost smoothing.

Here's how it works:

• You opt in through your Part D or Medicare Advantage drug plan. It's free to join.
• Instead of paying the pharmacy at the counter, your plan bills you monthly.
• Your total for the year is the same. It's just spread out.

Who might benefit? People with one or two expensive prescriptions early in the year, or anyone who'd rather budget in smaller monthly amounts than face a big bill up front. Who might skip it? People with low or predictable drug costs — the paperwork may not be worth it.

You can request to join anytime during the year, but signing up before January means the smoothing starts right away.

What this means for Durham residents this fall

Durham is in Durham County, where Medicare beneficiaries choose each year among stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Plan availability and formularies are set at the county level, so what's offered in Durham County may differ from a neighboring county.

The Annual Enrollment Period runs October 15 through December 7. That's your window to:

• Compare Part D plans and check whether your medications are on the formulary.
• Switch Medicare Advantage plans or move between Original Medicare and Advantage.
• Ask about the Prescription Payment Plan for 2027.

If you have Medicare Advantage, there's also a second window — Medicare Advantage Open Enrollment, January 1 through March 31 — when you can make one change.

A quick note on higher-income enrollees

If your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you'll pay an IRMAA surcharge on top of your Part D premium in 2026. The cap ($2,100 in 2026, $2,400 in 2027) still applies to your out-of-pocket drug costs — IRMAA affects premiums, not the cap.

Common questions

Q: Does the cap ($2,100 in 2026, $2,400 in 2027) include drugs I get at a doctor's office or hospital? No. Those are usually covered under Part B, not Part D. The cap applies to Part D drugs — the ones you pick up at a pharmacy or get by mail order through your drug plan.

Q: If I already hit the catastrophic level in 2026, does that carry over? No. Out-of-pocket totals reset every January 1. Your 2027 counter starts at zero.

Q: Do I have to do anything to get the cap ($2,100 in 2026, $2,400 in 2027)? No. It applies automatically to everyone with Part D coverage. But you should still review your plan during Annual Enrollment to make sure your drugs are covered and the pharmacy network works for you.

Q: Can I sign up for the payment plan mid-year? Yes. You can request it any time, but the sooner you enroll, the sooner your costs get spread out.

Where to get help you can trust

Before making any changes, take time to compare plans against your actual medication list. Free, unbiased help is available:

• Medicare.gov — use the Plan Finder to compare Part D and Medicare Advantage options in Durham County.
• 1-800-MEDICARE (1-800-633-4227) — 24/7, including help in multiple languages.
• North Carolina SHIIP — the state's federally funded State Health Insurance Assistance Program, which offers free one-on-one Medicare counseling. In Durham, you can reach a SHIIP counselor through the local Council on Aging.

The 2027 changes are meant to make Part D more predictable. A little review this fall — of your drugs, your plan, and whether the payment plan fits — is the best way to make the new rules work for you.