Medicare Part D

Medicare's $2,400 Drug Cap in 2027: What Delaware Residents Should Know

DELAWARE, Ohio — Starting January 1, 2027, the hard yearly cap on what you pay out-of-pocket for prescription drugs under Part D rises to $2,400, up from $2,100 in 2026. For people who take costly medications, this is the kind of change that can reshape a household budget — and it comes with an optional payment plan that spreads those costs across the year.

Here's what's actually changing, and where to get straight answers close to home.

The Part D cap, in plain English

In 2027, once your out-of-pocket spending on covered Part D drugs hits $2,400, you pay $0 for the rest of the calendar year on those drugs. That's it. No more catastrophic coinsurance. No more open-ended costs.

This cap applies whether you have a stand-alone Part D drug plan or a Medicare Advantage plan that includes drug coverage. It resets every January.

For context, the cap was $2,000 in 2025 and $2,100 in 2026, and it is indexed to rise modestly with drug-cost inflation — hence $2,400 in 2027.

Only what you pay counts toward the cap: deductibles, copays, and coinsurance for covered drugs. Your monthly premium does not count.

The "donut hole" is gone

If you've been on Medicare for a while, you probably remember the coverage gap — the dreaded "donut hole" where your share of drug costs jumped once you and your plan hit a spending threshold.

That gap was eliminated in 2025 and remains gone in 2027. Part D now has just three phases:

1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (no more than $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance until your out-of-pocket total reaches $2,400. 3. Catastrophic phase — you pay $0 for covered drugs the rest of the year.

Simpler, and much easier to plan around.

The Medicare Prescription Payment Plan

Hitting a $2,400 cap is great news at year's end. But what if a big prescription cost lands in February? That's where the Medicare Prescription Payment Plan — sometimes called "M3P" or drug-cost smoothing — comes in.

Here's how it works:

• It's optional and free to join.
• Instead of paying the pharmacy at pickup, you pay $0 at the counter.
• Your plan bills you monthly, spreading your yearly drug costs into predictable installments through December.
• You never pay more overall than you would have without it — it just changes when you pay.

This option tends to help most if you have a high-cost drug early in the year, or if a steady monthly bill is easier to manage than an unexpected pharmacy charge. It may not help as much if your drug costs are low or spread evenly across the year.

You can ask your Part D or Medicare Advantage plan to opt in at any time during the year.

What this means locally

Delaware is in Delaware County, and Medicare plan availability is set at the county level. That means every Part D and Medicare Advantage plan offered in Delaware County must follow the same 2027 federal rules — the $2,400 cap, the $700 maximum deductible, and access to the payment plan. The specific plan lineup for 2027 is in each plan's ANOC and on Medicare.gov's Plan Finder.

If you're comparing plans during the Annual Enrollment Period (October 15 – December 7, 2026) for coverage that starts January 1, 2027, the cap and the elimination of the donut hole apply across the board. What still varies plan by plan is which drugs are on the formulary, what tier your medication falls into, and which pharmacies are in-network. Those details are where a careful comparison pays off.

A quick note on higher earners

Most people on Medicare pay the standard Part B and Part D premiums. But if your income is above $109,000 as a single filer (or $218,000 filing jointly) in 2026, you may owe an IRMAA surcharge on top of your Part B and Part D premiums. Income is based on your tax return from two years earlier.

If your income has dropped because of retirement, a spouse's death, or another life event, you can ask Social Security to reconsider using Form SSA-44.