Medicare Supplement

What the new Part D cap means for Sioux City Medicare

SIOUX CITY, Iowa — 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 biggest change to Medicare drug coverage in a generation, and it lands right in the middle of Fall Open Enrollment, which runs through December 7.

For Sioux City residents comparing plans this fall, here's what the new rules actually mean.

The $2,100 cap, in plain English

Under Medicare Part D program rules set by the Centers for Medicare & Medicaid Services (CMS), 2026 brings a hard ceiling of $2,100 on what a person pays out of pocket for covered prescription drugs in one year. Once you hit that number — through deductibles and copays or coinsurance combined — your Part D plan pays 100% of covered drugs for the rest of the year.

This cap applies whether you get drug coverage through a stand-alone Part D plan or through a Medicare Advantage plan that includes drugs. It does not cover premiums, over-the-counter items, or drugs your plan doesn't cover.

The "donut hole" is gone

If you've been on Medicare for a while, you probably remember the coverage gap — the "donut hole" — where costs jumped in the middle of the year. That phase was eliminated in 2025. In 2026, Part D has just three phases:

• Deductible phase. You pay full negotiated price until you meet your plan's deductible. The maximum deductible any plan can charge in 2026 is $615, though plans can set it lower.
• Initial coverage phase. You pay copays or coinsurance while the plan pays its share.
• Catastrophic phase. Once your out-of-pocket spending reaches $2,100, you pay nothing more for covered drugs that year.

That's it. No more falling into a gap mid-year.

The Medicare Prescription Payment Plan

Hitting a $2,100 ceiling still means some people could face big bills in January or February if they take an expensive drug. That's where the Medicare Prescription Payment Plan comes in.

This is a free, optional program. Instead of paying the pharmacy at the counter, you can ask your Part D plan to spread your yearly drug costs across monthly payments — capped so you never pay more than $2,100 in total for covered drugs across the year. The plan bills you monthly.

It's not for everyone. If your drug costs are low and steady, you may not need it. But if you take a high-cost medication and worry about a large charge at the pharmacy early in the year, it's worth asking your plan about signing up. You can enroll anytime during the year.

What Sioux City residents should check during Open Enrollment

Sioux City is in Woodbury County, where Medicare plan availability — the number of stand-alone Part D and Medicare Advantage plans offered — is set at the county level by CMS each year. That means the specific plans you can choose from depend on your ZIP code and county, not the city name alone.

A few things worth reviewing before December 7:

• Your drug list. Make sure every prescription you take is still on your plan's formulary for 2026.
• Your pharmacy. Preferred pharmacy networks change. Confirm yours is still in-network.
• Your Annual Notice of Change (ANOC). Your current plan mailed this in September. It spells out what's changing for 2026.
• Whether you'd benefit from the payment plan. If you take a costly drug, ask about smoothing.

If you miss the December 7 deadline, you'll generally be locked into your 2026 coverage. Medicare Advantage enrollees do get a second window — the Medicare Advantage Open Enrollment Period from January 1 to March 31 — to switch Medicare Advantage plans once or return to Original Medicare.

A quick word on higher-income surcharges

If your income is above $109,000 as a single filer (or $218,000 filing jointly) based on your 2024 tax return, you'll pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part D premium in 2026. This is separate from the $2,100 cap, which applies to drug costs — not premiums.