Medicare Part D
Jan. 1, 2027 Medicare Part D in Flower Mound
Flower Mound, TX — Starting Jan. 1, 2027, every Medicare Part D plan will cap what you pay out of pocket for covered prescription drugs at $2,400 for the year. Once you hit that number, you pay nothing for covered drugs the rest of the calendar year. It's one of the biggest changes to Medicare in a generation, and it lands right as the Annual Enrollment Period (Oct. 15 – Dec. 7) is underway.
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Click to call 855-729-3240Key takeaways
- Starting Jan. 1, 2027, every Medicare Part D plan will cap out-of-pocket costs for covered prescription drugs at $2,400 per year, and once you hit that limit you pay nothing for covered drugs for the rest of the year.
- The old coverage gap, or "donut hole," is gone, leaving three simpler stages: a deductible phase (up to $700 in 2027), an initial coverage phase, and a catastrophic phase where costs drop to zero.
- A free, optional Medicare Prescription Payment Plan lets you pay $0 at the pharmacy and instead spread your drug costs into monthly bills across the year.
- These dollar limits are federal rules that apply to every Part D plan, but premiums, formularies, pharmacy networks, and deductibles below the federal maximum still vary by plan, so it's worth comparing plans on Medicare.gov's Plan Finder during the Annual Enrollment Period (Oct. 15 – Dec. 7).
If you or a family member takes an expensive medication, this is the year to pay attention to your Part D coverage.
The Part D cap, in plain English
For years, Medicare drug coverage had no true ceiling on what you could spend. A single specialty drug could push someone into thousands of dollars in yearly costs.
That has changed. Under Medicare Part D rules for 2027:
- Your out-of-pocket spending on covered drugs is capped at $2,400 per year in 2027 (it is $2,100 in 2026).
- The maximum Part D deductible any plan can charge is $700 in 2027 (it is $615 in 2026).
- The old "coverage gap" — the donut hole — is gone. It was eliminated in 2025.
The cap applies to what you actually pay for covered drugs at the pharmacy: deductibles, copays, and coinsurance. Premiums don't count toward it. Drugs your plan doesn't cover don't count either — which is why checking a plan's formulary matters so much.
What happened to the donut hole
If you've been on Medicare for a while, you probably remember the coverage gap — a middle phase where costs could jump before "catastrophic coverage" kicked in.
That phase is gone. Part D now has three simpler stages:
1. Deductible phase — you pay full negotiated price until you meet your plan's deductible (up to $700 in 2027). 2. Initial coverage phase — you pay a copay or coinsurance; the plan pays the rest. 3. Catastrophic phase — once your out-of-pocket spending hits $2,400 in 2027, you pay nothing for covered drugs for the rest of the year.
No more donut hole. No more surprise middle stage.
The Medicare Prescription Payment Plan
Hitting a $2,400 cap is a relief, but $2,400 in January is still a lot to pay at once. That's where the Medicare Prescription Payment Plan (sometimes called "M3P") comes in.
It's a free, optional program built into every Part D plan. Instead of paying a large drug bill at the pharmacy counter, you pay $0 there and your plan bills you monthly, spreading your yearly drug costs across the calendar year.
A few things to know:
- You have to opt in. It doesn't happen automatically.
- It doesn't lower your total drug costs — it just smooths them out.
- It works best for people with high drug costs early in the year. If your drug bills are small and steady, monthly smoothing may not help much.
- You can sign up before the plan year begins or any month during the year by contacting your Part D plan.
What this means locally
Flower Mound is in Denton County, where — as in the rest of Texas — Medicare beneficiaries choose Part D coverage either as a stand-alone drug plan (paired with Original Medicare) or as part of a Medicare Advantage plan that includes drug coverage.
The $2,400 cap, the $700 maximum deductible, and access to the payment plan are federal rules for 2027. They apply to every Medicare Part D plan sold in Denton County, no matter the carrier. What varies plan to plan is the premium, the formulary (which drugs are covered and at what tier), the pharmacy network, and any deductible below the federal maximum.
That's why comparing your current plan on Medicare.gov's Plan Finder each fall is worth an hour of your time — even if you've been happy with your plan.
Common mistakes to avoid this AEP
- Assuming your plan is the same as last year. Formularies, tiers, and pharmacy networks change every year. Read your Annual Notice of Change.
- Ignoring the Payment Plan option if you take a high-cost drug. A large January bill is legal — even under the cap — unless you've enrolled in monthly billing.
- Confusing the $2,400 cap with a premium cap. Premiums are separate and not included.
- Forgetting about IRMAA. Higher-income beneficiaries pay a surcharge on Part B and Part D premiums. For 2026, IRMAA begins above $109,000 in income for a single filer (based on your 2024 tax return).
- Missing the deadline. AEP ends Dec. 7. If you're in a Medicare Advantage plan, you get a second window — Jan. 1 – Mar. 31 — to switch Advantage plans or return to Original Medicare.
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 Denton County
(MA penetration in Denton 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). For 2027 there's a hard yearly cap of $2,400 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 what I pay for insulin or vaccines?
If I don't take expensive drugs, does any of this matter to me?
Will my premium go up because of the cap?
- CMS — Medicare Part D program rules (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.