Medicare Part D Costs in 2026
Part D is prescription drug coverage, and 2026 keeps the biggest improvement in years: a hard $2,000 annual cap on what you pay out of pocket for covered drugs. Here is how the costs work.
The pieces of a Part D bill
- Monthly premium: varies by plan and region; higher earners pay an IRMAA surcharge.
- Annual deductible: set by each plan up to a federal maximum; some plans have none.
- Copays and coinsurance: set by each plan and based on your drug’s tier on the plan formulary.
The $2,000 out-of-pocket cap
The most important number in modern Part D: once your out-of-pocket spending on covered drugs reaches $2,000in a year (a cap introduced in 2025 and indexed upward thereafter), you pay nothing more for covered drugs for the rest of the year. This effectively ended the old “donut hole” for most people. Covered insulin is also capped at $35 per month.
The late-enrollment penalty
Part D has a permanent penalty for going without creditable drug coverage. It adds roughly 1% of the national base premium for each month you were uncovered, and it sticks for as long as you have Part D — so enroll on time even if you take few medications today. See the enrollment periods hub for your deadlines.
How to lower your Part D costs
The right plan depends on your exact medications, not just the premium — a low-premium plan can cost more if your drugs sit on a high tier. Use our drug cost estimator, check whether you qualify for Extra Help, and see more ways to save on the how to lower costs page.
Frequently Asked Questions
Is there a cap on Part D drug costs?
Yes. Beginning in 2025, your out-of-pocket spending on covered Part D drugs is capped at $2,000 per year (indexed upward each year after). Once you hit the cap, you pay nothing more for covered drugs that year.
How much does Part D cost per month?
Premiums vary by plan and region, and higher-income beneficiaries pay an income-related surcharge (IRMAA) on top. Each plan also sets its own deductible, up to a federal maximum, and its own copays by drug tier.
What is the Part D late-enrollment penalty?
If you go without Part D or other creditable drug coverage after you are first eligible, you can owe a permanent penalty of roughly 1% of the national base premium for each month you went without — added to your premium for as long as you have Part D.
Is insulin still capped at $35?
Yes. Covered insulin is capped at $35 for a month’s supply under Medicare drug coverage.
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Get My Free ReviewThis information is for educational purposes only and is not legal, tax, or insurance advice. Medicare rules, premiums, and income thresholds change annually — confirm current figures with Medicare.gov, the Social Security Administration, or a licensed advisor. HealthPlan Connect is not affiliated with or endorsed by the federal Medicare program or any government agency. Last reviewed 2026-06-15 by Lynsey Brennan, Licensed Medicare Advisor (FL #G007269).