Medicare Part D out-of-pocket cap rises to $2,100 for 2026

People with Medicare Part D drug coverage face a maximum of $2,100 in out-of-pocket spending on covered prescriptions in 2026, up from $2,000 in 2025 ^[1]. Once that limit is reached, the plan pays 100% of the cost of covered medications for the rest of the year ^[1].

How the limit changed

The $2,100 cap comes from the Inflation Reduction Act of 2022 and applies to both stand-alone Part D plans and prescription coverage included in Medicare Advantage plans ^[1]. As recently as 2024, enrollees had to spend $8,000 before reaching catastrophic coverage, the phase in which plans cover all remaining costs ^[1]. The coverage gap known as the donut hole ended on December 31, 2024, leaving Part D plans with three phases instead of four ^[1]. For 2026, the deductible a plan may charge cannot exceed $615, up from $545 in 2024 ^[1].

What counts toward the cap

In 2026, manufacturer discounts do not count toward the $2,100 out-of-pocket total, although payments made on an enrollee's behalf by the Extra Help low-income subsidy program may count ^[1]. That differs from 2024, when the initial coverage phase ended at $5,030 in out-of-pocket expenses and that figure could include manufacturer discounts and other payments made on the enrollee's behalf ^[1]. The cap applies only to covered medications, so drugs a plan does not cover do not move an enrollee toward the limit ^[1].

Spreading costs across the year

The Medicare Prescription Payment Plan lets enrollees pay out-of-pocket drug costs in monthly amounts across the year instead of paying the full amount at the pharmacy counter ^[1]. Enrollment is voluntary and free, and it must be renewed each year ^[1]. Enrollees still pay their Part D premium on top of the monthly payment plan bill ^[1]. There is no interest or fees on late payments, but a person can be dropped from the payment plan for not paying what is due each month ^[1]. Signing up during the fall open enrollment period, which ran through December 7, 2025, means payments begin January 1, 2026; enrollment is also available at any point in 2026, including retroactively for an urgent prescription ^[1]. Leaving the payment plan does not end Part D coverage, but switching to a different prescription plan does end payment plan enrollment ^[1].

The cap does not change anything for every enrollee. People who did not spend enough on prescriptions in 2025 and who will not exceed $2,100 in 2026 see little difference from the higher limit ^[1]. Whether a particular drug is covered depends on each plan's formulary, and coverage restrictions such as prior authorization, step therapy and quantity limits are common in Medicare Advantage plans that include drug coverage ^[1].

Why it matters for patients

For anyone on Medicare drug coverage who takes a medication with a high monthly price, the $2,100 limit sets a ceiling on covered-drug spending for the year, and reaching it earlier in the year means the plan pays for the rest of that year's covered prescriptions ^[1]. Because the limit counts only what the enrollee pays, and manufacturer discounts no longer count toward it in 2026, the spending that moves someone toward the cap is narrower than it was in 2024 ^[1]. Whether a GLP-1 medication is among a plan's covered drugs, and under what conditions, is not set by the cap; it is set by the plan's formulary and its coverage rules ^[1].

What happens next

The out-of-pocket limit will be adjusted each year for inflation, and the specific figure for 2027 has not been reported ^[1]. Enrollment in the Medicare Prescription Payment Plan stays open throughout 2026, and plans send their Annual Notice of Change by September 30 each year ahead of the fall open enrollment period ^[1].