Medicare Part D changed significantly in recent years. In 2026, no Medicare drug plan may have a deductible higher than $615, and the annual out-of-pocket threshold for covered Part D drugs is $2,100.
Those numbers do not mean every prescription costs the same. Formularies, tiers, pharmacies and plan-specific cost sharing still matter.
Stage 1: The deductible
Your plan may require you to pay the negotiated cost of certain medications until the deductible is met. Some plans exclude lower drug tiers from the deductible or use a deductible below the federal maximum, so check the Summary of Benefits and formulary.
Stage 2: Initial coverage
Under the standard 2026 design, you generally pay 25% of covered drug costs after the deductible until your qualifying out-of-pocket spending reaches $2,100. Plans can use copays instead, as long as the coverage meets Medicare requirements.
Stage 3: Catastrophic coverage
Once your covered Part D out-of-pocket spending reaches $2,100, you pay $0 for covered Part D medications for the rest of 2026. Premiums and costs for medications not covered by the plan do not count toward this protection.
What still varies by plan
- Monthly premium
- Drug formulary and tier
- Preferred pharmacy pricing
- Prior authorization, step therapy and quantity limits
- Whether the deductible applies to each tier
The Medicare Prescription Payment Plan
Part D plans must offer an option to spread eligible out-of-pocket prescription costs across monthly payments. This can help with cash flow, but it does not reduce the total amount owed for covered prescriptions.