Prescription drugs · Part D

Medicare Part D (Prescription Drug)

Part D is Medicare’s prescription drug coverage — bought either as a standalone plan alongside Original Medicare, or bundled into most Medicare Advantage plans. The rules changed substantially: the old “donut hole” is gone, and in 2026 your out-of-pocket spending on covered drugs is capped at $2,100 for the year.

How Part D works in 2026

Coverage now moves through three phases instead of four. The coverage gap was eliminated entirely.

Phase 1

Deductible

You pay the full cost of your prescriptions until you meet your plan’s deductible. Many plans set theirs lower — or at $0 for generics.

Up to $615

Phase 2

Initial coverage

You pay a copay or coinsurance and the plan covers the rest, until your out-of-pocket spending reaches the annual cap.

Copay / coinsurance

Phase 3

Catastrophic

Once you hit the cap, you pay nothing more for covered Part D drugs for the rest of the calendar year.

$0 after $2,100

The 2026 numbers

Set nationally by Medicare. Your plan's premium, formulary, and pharmacy network still vary.

$2,100

Annual out-of-pocket cap

Once your covered-drug spending reaches this, your plan pays 100% for the rest of the year. Up from $2,000 in 2025.

$615

Maximum deductible

The most any plan can charge. Many charge less, or waive it for generic drugs.

$35

Monthly insulin cap

Covered insulin is capped at $35 for a 30-day supply, with no deductible applied.

Spreading costs across the year

The Medicare Prescription Payment Plan

Even with a $2,100 ceiling, an expensive prescription filled early in the year can mean a large bill at the pharmacy counter in January. The Medicare Prescription Payment Plan solves that: you pay $0 at the pharmacy and your plan bills you monthly instead, spreading your out-of-pocket costs across the remaining months.

It’s optional and free — you don’t save money overall, you just avoid the lump sum. New for 2026, enrollment renews automatically each year unless you opt out.

What doesn't count toward the cap

This is where people most often get tripped up.

Monthly premiums

Your plan premium never counts toward the $2,100 — and premiums can still rise even though drug costs are capped.

Drugs not on the formulary

If your plan doesn’t cover a drug, what you pay for it doesn’t count. Always check the formulary against your prescriptions.

Part B drugs

Medications administered in a doctor’s office — many infusions and injectables — fall under Part B, not Part D.

Manufacturer coupons

Only what you actually pay out of pocket counts. Coupons can lower your cost but won’t speed you toward the cap.

Frequently asked questions

Yes. The coverage gap was eliminated and replaced by a single annual out-of-pocket limit — $2,100 in 2026. Part D now has three phases: deductible, initial coverage, and catastrophic, where you pay $0 for covered drugs.

Yes. The $2,100 cap applies to the drug portion of a Medicare Advantage plan that includes Part D coverage, exactly as it does to a standalone Part D plan.

If you go 63 days or more without creditable drug coverage after your Part D initial enrollment period ends, you may owe a late enrollment penalty — and it’s added to your premium permanently.

During the Annual Enrollment Period, October 15 to December 7, with changes effective January 1. Review the Annual Notice of Change your plan sends each September — formularies and pharmacy networks shift year to year.

Regulatory disclosure

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

Bring us your medication list.

A licensed agent will check formularies and pharmacy networks against the drugs you actually take.

Request a callback