Medicare Part D

How Medicare's $2,400 drug cap works for Keller residents

Keller, Texas — Starting January 1, 2027, the way you pay for prescription drugs under Medicare continues to work under a firm yearly ceiling on what you spend out of pocket at the pharmacy. If you take expensive medications — or worry that you might one day — this structure could bring real peace of mind.

Here's what's new, what it means, and how to think through your options during this fall's Annual Enrollment Period (October 15 – December 7).

The $2,100 cap: a hard ceiling on drug costs

In 2027, the most you'll pay out of pocket for covered Part D prescription drugs is $2,400 for the year, according to CMS. Once you hit that amount in combined deductibles and copays or coinsurance for covered drugs, you pay $0 for the rest of the calendar year.

This cap applies whether you have a stand-alone Part D plan or drug coverage built into a Medicare Advantage plan. It resets each January.

For context, the cap is $2,100 in 2026 and $2,400 in 2027 — a modest step up from the $2,000 limit that took effect in 2025, the first year Medicare had any out-of-pocket ceiling for drugs at all. Before that, catastrophic drug costs could climb into the many thousands.

The coverage gap is gone

If you've been on Medicare for a while, you may remember the "donut hole" — a confusing middle phase where you suddenly paid more for your medications after hitting a spending threshold. That phase was eliminated in 2025 and remains gone in 2027.

Part D now has three straightforward phases:

1. Deductible phase — You pay full negotiated cost for your drugs until you meet the plan's deductible. The maximum deductible any Part D plan can charge in 2027 is $700. Some plans set it lower. 2. Initial coverage phase — You pay a copay or coinsurance; the plan pays the rest. 3. Catastrophic phase — Once your out-of-pocket spending reaches $2,400, you pay nothing for covered drugs for the rest of the year.

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

The Medicare Prescription Payment Plan: spreading costs over the year

Even with the $2,400 cap, some people face big pharmacy bills early in the year — for example, if a single prescription runs several hundred dollars in January. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program available through every Part D plan. Instead of paying the pharmacy directly, you can choose to have your out-of-pocket drug costs billed to you in monthly installments spread across the calendar year. You still owe the same total — the cap doesn't change — but the payments are smoothed out.

A few things to know:

• You have to opt in. It's not automatic.
• You can enroll before the plan year starts or at any point during the year.
• It tends to help most if you have high drug costs early in the year or take one or more expensive brand-name medications.
• It may not help — and could feel like extra paperwork — if your drug costs are low or spread evenly.

You can sign up through your plan directly. Medicare.gov has a worksheet to help you decide whether it fits your situation.

What this means for people in Keller

Keller is in Tarrant County, where residents choose among a wide range of stand-alone Part D and Medicare Advantage plans during Annual Enrollment. Plan availability is set at the county level by CMS, not by ZIP code or city.

While the $2,100 cap and the elimination of the coverage gap apply to every Part D plan nationwide, the details that still vary plan-to-plan include:

• The monthly premium
• The deductible (up to that $700 maximum in 2027)
• Which drugs are on the formulary and at what tier
• Which pharmacies are considered in-network or preferred

That's why it's worth reviewing your current plan's 2027 Annual Notice of Change (ANOC), which your plan mails each fall, and comparing it against other options on medicare.gov's Plan Finder before December 7.

A quick word on IRMAA

Higher-income beneficiaries pay an extra amount on top of standard Part B and Part D premiums, called IRMAA (Income-Related Monthly Adjustment Amount). In 2026, IRMAA surcharges kick in for single filers with income above $109,000 (based on your 2024 tax return). If you're near that line, it's worth looking at whether life changes — retirement, loss of a spouse — qualify you to request a reconsideration.