FAQ: Medicare Part D Prescription Drug Coverage

Medicare Part D is the part of Medicare that helps pay for prescription drugs. For the 2026 plan year, Part D includes a $2,100 annual cap on your out-of-pocket drug costs, a maximum $615 deductible, a $35 monthly cap on insulin, and no more “donut hole” coverage gap. You can also choose the Medicare Prescription Payment Plan to spread your costs across the year.

What is Medicare Part D?

Medicare Part D is optional prescription drug coverage offered through private plans approved by Medicare. You can get it as a standalone drug plan (added to Original Medicare) or built into a Medicare Advantage plan.

Each Part D plan has its own list of covered drugs (called a formulary), its own pharmacy network, and its own premiums and copays. Because plans differ, two people can pay very different amounts for the same medication depending on which plan they have.

What does Medicare Part D cost in 2026?

In 2026, your costs are capped: you will never pay more than $2,100 out of pocket for covered Part D drugs in a year. The deductible is no more than $615, insulin is capped at $35 a month, and monthly premiums vary by plan.

2026 Part D figures sourced from Medicare.gov and the Centers for Medicare & Medicaid Services (CMS). Accessed June 2026. Amounts update each plan year — confirm current figures with your plan or Medicare.

The $2,100 out-of-pocket cap, explained

Once your out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026, your plan pays 100% of the cost of your covered drugs for the rest of the calendar year.

This cap comes from the Inflation Reduction Act, which added a hard limit on yearly drug spending. It began at $2,000 in 2025 and rose to $2,100 in 2026 (the cap is adjusted each year). For people on expensive specialty medications, this is one of the most important changes to Medicare in years — it turns unpredictable drug bills into a known yearly maximum.

What happened to the “donut hole” (coverage gap)?

The coverage gap, known as the “donut hole,” was permanently eliminated on January 1, 2025. Part D now has simpler phases with a firm yearly out-of-pocket cap.

Here’s how your drug costs now move through the year:

Coverage phase details sourced from Medicare.gov — Costs for Medicare drug coverage. Accessed June 2026.

How much does insulin cost under Part D?

Covered insulin is capped at $35 for a month’s supply under Medicare Part D, and this applies even before you meet your deductible.

The $35 monthly cap applies to each covered insulin product on your plan’s formulary, regardless of what coverage phase you’re in.

What is the Medicare Prescription Payment Plan?

The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments across the year instead of paying large amounts at the pharmacy. There is no interest, no fees, and no credit check.

Every Part D and Medicare Advantage drug plan must offer this option. Instead of paying a big bill up front (for example, early in the year before you hit the cap), your plan bills you monthly. It doesn’t lower your total costs — it just makes them more predictable. If you enrolled in 2025, your plan automatically re-enrolls you for 2026, and if you miss a payment you get at least a 2-month grace period.

Medicare Prescription Payment Plan details sourced from Medicare.gov — Prescription Payment Plan and CMS. Accessed June 2026.

When can I enroll in or change a Part D plan?

You can usually join or switch a Part D plan during Medicare Open Enrollment (October 15 – December 7) each year, or when you first become eligible for Medicare.

Because plans change their premiums, covered drugs, and pharmacy networks each year, it’s worth reviewing your plan every fall to make sure it still covers your medications at the best price. Special situations (like moving or losing other coverage) can also open a Special Enrollment Period.

Frequently asked questions

What is the Medicare Part D out-of-pocket cap for 2026?
In 2026, the cap is $2,100. Once you spend that much out of pocket on covered drugs, your plan pays 100% of covered drug costs for the rest of the year.

Is the Medicare “donut hole” gone?
Yes. The coverage gap was permanently eliminated on January 1, 2025. Part D now uses a deductible phase, an initial coverage phase, and then $0 for covered drugs once you reach the annual cap.

How much will I pay for insulin on Part D?
Covered insulin is capped at $35 for a one-month supply, and the cap applies even before you meet your deductible.

What is the Medicare Prescription Payment Plan?
It’s a free option that lets you pay your out-of-pocket drug costs in monthly installments over the year, with no interest or fees. It spreads out costs but doesn’t reduce your total.

Do I need Part D if I don’t take many medications?
Even if you take few drugs, enrolling when first eligible can help you avoid a late-enrollment penalty later. Review your options with a licensed advisor or Medicare.

If you’re worried about affording a specific specialty medication, our pharmacy team can help — see our guide on prescription copay assistance for programs that may lower what you pay.

References & sources

1. Medicare.gov — Drug coverage (Part D). medicare.gov/drug-coverage-part-d. Accessed June 2026.
2. Medicare.gov — Costs for Medicare drug coverage. medicare.gov. Accessed June 2026.
3. Medicare.gov — Medicare Prescription Payment Plan. medicare.gov/prescription-payment-plan. Accessed June 2026.
4. Centers for Medicare & Medicaid Services (CMS) — Medicare Prescription Payment Plan. cms.gov. Accessed June 2026.