Medicare Part D

Medicare's New $2,100 Drug Cap Starts in 2026 — What to Know

LAS VEGAS, N.M. — Starting January 1, 2026, Medicare Part D will look different than it ever has before. For the first time, there is a firm ceiling on what you pay out of pocket for covered prescription drugs: $2,100 for the year. Once you hit that number, you pay $0 for the rest of 2026 on drugs your Part D plan covers.

That change matters most for people who take expensive medications — the kind of drugs that used to push families into the old "donut hole." The donut hole is gone. And a new payment option lets you spread your drug costs across the year instead of getting hit with a big bill in January or February.

Here's what's changing, and what to do before the Annual Enrollment Period ends on December 7.

The $2,100 out-of-pocket cap, in plain English

Every Part D plan and every Medicare Advantage plan that includes drug coverage must follow this cap. Once your out-of-pocket spending on covered prescriptions reaches $2,100 in 2026, you pay nothing more for those drugs for the rest of the calendar year.

A few important details:

• The cap applies to covered drugs on your plan's formulary. If a drug isn't covered, those costs don't count.
• Premiums don't count toward the cap. Only deductibles, copays, and coinsurance do.
• The cap resets on January 1 each year.

For 2026, the Part D deductible cannot be higher than $615, though many plans set theirs lower.

The donut hole is officially gone

If you remember the old Part D structure, you'll remember the "coverage gap" — that awkward middle stage where you suddenly paid more before catastrophic coverage kicked in.

That phase was eliminated in 2025. In 2026, Part D has just three stages:

1. Deductible — you pay full negotiated price until you meet it (up to $615). 2. Initial coverage — you pay copays or coinsurance until your out-of-pocket total hits $2,100. 3. Catastrophic coverage — you pay $0 for covered drugs the rest of the year.

No more donut hole math. No more sticker shock in the middle of the year.

The Medicare Prescription Payment Plan

Even with a $2,100 cap, some people could still owe most of it in January if they fill a costly prescription early in the year. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program. Instead of paying the pharmacy directly, you can ask your Part D plan to spread your out-of-pocket costs into monthly payments across the calendar year. Your plan bills you; you pick up your prescriptions at the counter for $0 at the point of sale.

A few things to know:

• It doesn't lower your total costs — it just smooths them out.
• You have to opt in through your plan.
• It tends to help most if you have high drug costs early in the year.
• If you miss a monthly bill, you can be removed from the program (though you keep your drug coverage).

You can sign up before the plan year starts or at any point during the year.

What this means locally

Las Vegas is in San Miguel County, where Medicare beneficiaries can compare stand-alone Part D plans and Medicare Advantage plans that include drug coverage during AEP. The rules above — the $2,100 cap, the $615 deductible ceiling, the three-phase structure, and the payment plan option — apply to every Part D plan sold in the county, regardless of carrier.

That's important, because it means you don't need to chase these features. They're built in by law. What still varies from plan to plan is the formulary (which drugs are covered and at what tier), the pharmacy network, and monthly premiums.

Deadlines to circle

• October 15 – December 7, 2025: Annual Enrollment Period. Join, switch, or drop a Part D or Medicare Advantage plan. Changes take effect January 1, 2026.
• January 1 – March 31, 2026: Medicare Advantage Open Enrollment. If you're already in a Medicare Advantage plan, you get one chance to switch to another MA plan or return to Original Medicare with a stand-alone Part D plan.

If you take expensive medications, this is the year to compare plans carefully on formulary — not just premium. A cheaper premium doesn't help if your drug isn't covered.

A quick note on IRMAA

Higher-income beneficiaries pay an Income-Related Monthly Adjustment Amount on top of standard Part B and Part D premiums. For 2026, IRMAA begins for single filers with income above $109,000 (based on your 2024 tax return). This is separate from the $2,100 cap and does not affect it.