Medicare Part D

Medicare's New $2,100 Drug Cap Starts Jan. 1: What to Know

GLEN BURNIE, Md. — Starting January 1, 2026, no one with a Medicare Part D drug plan will pay more than $2,100 out of pocket for covered prescriptions in a calendar year. It's the next step in a multi-year overhaul of how Medicare pays for drugs, and it lands right as the Annual Enrollment Period (October 15 – December 7) gives people a chance to review their coverage for the new year.

A big change for prescription costs arrives in January

For Glen Burnie residents — and anyone on Medicare — this is the change most likely to affect your wallet in 2026. Here's what's new, what's gone, and what to do about it.

The $2,100 cap, in plain English

Under Part D, once your out-of-pocket spending on covered drugs reaches $2,100 in 2026, you pay $0 for the rest of the year on those prescriptions. This cap applies whether your drug coverage comes through a stand-alone Part D plan or is built into a Medicare Advantage plan that includes drug coverage.

A few things to keep in mind:

• The $2,100 counts what you pay — deductibles, copays, and coinsurance for covered drugs.
• Monthly plan premiums do not count toward the cap.
• Drugs your plan doesn't cover don't count either. That's why the plan's formulary (its list of covered drugs) matters so much.
• The Part D deductible can be no higher than $615 in 2026, though individual plans may set it lower.

For people managing expensive conditions — cancer therapies, blood thinners, certain diabetes or autoimmune drugs — this cap is the difference between an open-ended bill and a known ceiling.

The "donut hole" is officially gone

If you've been on Medicare for a while, you probably remember the coverage gap — the dreaded "donut hole" where your share of drug costs jumped once you hit a spending threshold. That phase was eliminated as of 2025.

Part D now has three phases instead of four:

1. Deductible — you pay full price (up to $615) until the plan starts sharing costs. 2. Initial coverage — you pay a copay or coinsurance for each prescription. 3. Catastrophic coverage — once your out-of-pocket total hits $2,100, you pay nothing more for covered drugs the rest of the year.

That's it. No more middle phase where costs suddenly spike.

The Medicare Prescription Payment Plan: spreading costs out

Even with a $2,100 ceiling, hitting that cap early in the year can sting if you fill a high-cost prescription in January or February. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program available through every Part D plan. Instead of paying the pharmacy at pickup, you pay $0 at the counter and your plan bills you monthly for what you owe, spread across the remaining months of the year.

A few points worth knowing:

• It doesn't lower what you owe overall — it just smooths the timing.
• You have to opt in. Your plan can help you sign up, or you can enroll before the plan year starts.
• It tends to help most if you have one or more high-cost drugs early in the year.

If your prescriptions are inexpensive and steady, this program may not do much for you. If you face a big bill in January, it can help you avoid a lump-sum shock.

What this means for Glen Burnie during AEP

Glen Burnie is in Anne Arundel County, where Medicare beneficiaries can choose from a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. The Annual Enrollment Period runs October 15 through December 7, and changes made during that window take effect January 1, 2026.

Because plans update their formularies, pharmacy networks, and cost-sharing structures every year, it's worth checking:

• Are your specific medications still on your plan's formulary?
• Is your preferred pharmacy still in-network?
• Has the tier (and therefore your copay) for any of your drugs changed?

The free Plan Finder at medicare.gov lets you enter your prescriptions and compare what each plan in your ZIP code would cost you over a year.

A quick note on higher-income beneficiaries

If your 2024 income was above $109,000 for a single filer (or $218,000 for a couple filing jointly), you may owe an income-related monthly adjustment amount, or IRMAA, on top of your Part D premium in 2026. Social Security determines this and will notify you directly if it applies.