Plans & Coverage
Part D Prescription Drug Plans
Medicare Part D covers prescription drugs. You can get it as a standalone plan alongside Original Medicare or Medigap, or built into a Medicare Advantage plan. For 2026 Part D includes a hard annual out-of-pocket cap of $2,100 — once you reach it, covered drugs cost you nothing for the rest of the year. The old coverage gap, the "donut hole," is gone.
What Part D costs in 2026
Four numbers define every standalone Part D plan this year.
| Cost | 2026 amount |
|---|---|
| Maximum deductible a plan may charge | $615 |
| Annual out-of-pocket cap | $2,100 |
| Standard coinsurance after the deductible | 25% |
| National base beneficiary premium | $38.99 |
These come from the CMS Final CY2026 Part D Redesign Program Instructions; plan-level costs are explained on Medicare.gov's Part D costs page. Individual plans may charge a lower deductible than the maximum, and premiums vary widely by plan.
The 2026 $2,100 cap, in plain English
Before 2025 there was no ceiling on what Part D could cost you. Now there is. Once your out-of-pocket spending on covered drugs reaches $2,100 in 2026, you pay $0 for covered drugs for the rest of the calendar year.
This matters most if you take an expensive specialty medication — the cap converts an open-ended risk into a known worst case. It resets every January 1.
You can also spread that spending across the year instead of paying it all at once, through the Medicare Prescription Payment Plan. Ask us if that would help your cash flow.
Why the cheapest premium is usually the wrong plan
Part D plans compete on premium because it's the easiest number to advertise. But your real cost is premium plus deductible plus what each of your specific drugs costs on that plan's formulary.
- Formulary — is your drug on the plan's covered list at all?
- Tier — the same drug can sit on tier 2 with one plan and tier 4 with another, changing your copay several-fold.
- Deductible — some plans charge $0, some the full $615, and some apply it only to higher tiers.
- Pharmacy network — preferred pharmacies cost less than standard ones, and mail order can be cheaper again.
- Restrictions — prior authorization, step therapy, and quantity limits can block a drug you're already stable on.
We run your prescription list against every plan we offer in your county to find your lowest total annual cost. We do not offer every plan available in your area. For a complete list of every plan in your county, use Medicare Plan Compare or call 1-800-MEDICARE.
The late-enrollment penalty, and how to avoid it
If you go 63 days or more without creditable drug coverage after you're first eligible, Medicare adds a permanent penalty to your Part D premium: 1% of the national base beneficiary premium for each month you went without creditable drug coverage. With a 2026 base premium of $38.99, every year without coverage adds roughly $4.68 a month — for life.
Creditable coverage from an employer, union, or VA plan counts; keep the letter that says so. Our Part D penalty estimator shows what a gap would cost you.
Help paying for drugs
If your income and resources are limited, two programs can eliminate most of what you'd otherwise pay.
- Extra Help (the Low-Income Subsidy) — zeroes out the Part D premium and deductible and caps copays at a few dollars. Apply free through Social Security; details on Medicare.gov.
- Medicare Savings Programs — pay your $202.90 Part B premium and, in some categories, your deductibles and coinsurance. Qualifying for one automatically qualifies you for Extra Help. See Medicare.gov's Medicare Savings Programs page.
New Mexicans apply for Medicare Savings Programs through the New Mexico Health Care Authority. It costs nothing to apply and we'll help you do it.
When you can choose or change a Part D plan
- Initial Enrollment Period — 7 months — the 3 months before your 65th-birthday month, that month, and the 3 months after.
- Annual Enrollment Period — October 15 – December 7, for a January 1 start. This is when most people switch.
- Special Enrollment Periods — moving, losing creditable coverage, entering or leaving a nursing home, or gaining Extra Help or Medicaid.
Because formularies change every year, a plan that was right last year may not be this year. We re-run your drug list each fall as part of your annual coverage review.
Not sure which of these fits you? A free 15-minute call with a licensed local advisor sorts it out — no pressure, and no cost to you. We do not offer every plan available in your area. For a complete list of every plan in your county, use Medicare Plan Compare or call 1-800-MEDICARE.
Questions, answered
What is the Part D late enrollment penalty?
If you go without creditable drug coverage for 63 days or more after you're first eligible, Medicare adds 1% of the national base beneficiary premium for each month you went without creditable drug coverage to your premium permanently. Against the 2026 base premium of $38.99, a one-year gap costs roughly $4.68 a month for as long as you have Part D.
Can I change Part D plans every year?
Yes. During the Annual Enrollment Period (October 15 – December 7) you can switch Part D plans for the following year. We review yours every fall because formularies and tiers change annually.
What is the 2026 out-of-pocket cap?
$2,100. Once your out-of-pocket spending on covered drugs reaches it, you pay nothing more for covered drugs that calendar year. It resets each January 1.
Do I need Part D if I don't take any prescriptions?
Usually yes. Plans with low premiums exist precisely for this situation, and enrolling on time avoids a permanent late-enrollment penalty later — which matters because most people do eventually need medication.
What if my drug isn't on the plan's formulary?
You can request an exception with your doctor's support, switch to a covered alternative, or change plans at the next enrollment period. We check your full list before you enroll so this doesn't happen in the first place.
Sources
- CMS — Final CY2026 Part D Redesign Program Instructions
- Medicare.gov — Part D costs
- Medicare.gov — Help with drug costs (Extra Help)
- Medicare.gov — Medicare Savings Programs
- SSA — Extra Help with Medicare drug costs
- Medicare Plan Compare
Figures are for 2026 and come from the official sources above. Plan-specific costs vary by county and carrier — confirm yours on Medicare Plan Compare or with a licensed agent.
Talk to a local Medicare advisor
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Content reviewed by Brian Penner, Independent Medicare advisor — no pressure.