What is the Medicare Part D out-of-pocket cap in 2026?

The 2026 Medicare Part D out-of-pocket cap is $2,100. Once you spend $2,100 in covered drug costs, you pay $0 for the rest of the year. This cap was created by the Inflation Reduction Act.

What was the Part D cap in 2025?

The 2025 Part D out-of-pocket cap was $2,000. The cap increased to $2,100 for 2026.

What counts toward the Part D out-of-pocket cap?

Your deductible payments, copays, and coinsurance for covered drugs all count toward the $2,100 cap. Premiums do not count. After reaching the cap, you pay $0 for covered drugs for the rest of the calendar year.

Medicare Part D Out-of-Pocket Cap 2026

Key Part D Numbers for 2026

💊

$2,100

Out-of-pocket cap (then $0)

📋

$590

Maximum deductible

📅

$2,000 in 2025

Cap increased $100 to $2,100

⚡

$38.99/mo

Base beneficiary premium

The Inflation Reduction Act & Part D Reform

Before the Inflation Reduction Act (IRA), signed in August 2022, Medicare Part D had no true out-of-pocket cap. Beneficiaries with high drug costs could spend thousands of dollars per year once they entered what was called the "catastrophic" phase — they still paid 5% of drug costs with no ceiling.

The IRA restructured Part D in stages:

Year	Key Change	OOP Cap
2023	Eliminated 5% coinsurance in catastrophic phase	~$7,400 (TrOOP threshold)
2024	Manufacturer discounts applied in coverage gap	~$8,000 (TrOOP threshold)
2025	True OOP cap introduced	$2,000
2026	Cap adjusted slightly upward	$2,100

The 2025 introduction of the true cap was the most significant change — beneficiaries went from potentially unlimited drug costs to a hard $2,000 ceiling. For 2026, the cap increased to $2,100 but the core protection remains.

The Three Part D Coverage Phases

Part D coverage works in three phases. Your cost-sharing is different in each phase. All three phases reset at the start of each calendar year.

Phase 1
Deductible

You pay: 100% of drug costs until deductible met

Maximum deductible: $590

Many plans have $0 deductible for preferred generics. Check your plan's formulary tier for deductible rules.

Phase 2
Initial Coverage

You pay: copays/coinsurance set by your plan

Continues until your OOP spending reaches $2,100

Costs vary by drug tier (generics cheaper than brand-name). Your plan's Evidence of Coverage lists exact copays.

Phase 3
Catastrophic

You pay: $0 for covered drugs

Starts after you spend $2,100 out of pocket

Coverage continues at $0 cost-sharing for the rest of the calendar year. This resets January 1.

Note on the coverage gap ("donut hole"): The coverage gap that existed before the IRA no longer functions as a separate phase with higher cost-sharing. The IRA effectively eliminated the practical impact of the donut hole. The three-phase structure above reflects current 2026 Part D coverage.

What Counts Toward the $2,100 Cap?

✓ Does Count

Your deductible payments
Copays for covered drugs
Coinsurance for covered drugs
Payments made through Extra Help (LIS)
Payments from certain government programs

✗ Does NOT Count

Monthly premium payments
Costs for non-formulary drugs
Costs for drugs used for non-covered uses
Payments by third-party programs (most employer/union plans)
Manufacturer coupons (in most cases)

Who Benefits Most from the Cap?

The $2,100 cap provides the greatest benefit to beneficiaries who take expensive specialty drugs or have multiple chronic conditions requiring high-cost medications. Examples include:

Cancer patients taking oral chemotherapy drugs
Rheumatoid arthritis patients on biologics (e.g., Humira, Enbrel)
Multiple sclerosis patients on disease-modifying therapies
Diabetes patients needing insulin plus other medications
Anyone whose drug costs previously pushed them into the catastrophic phase

For beneficiaries who only take lower-cost generics, the cap may not come into play — their annual drug costs may stay well below $2,100.

Insulin Price Cap

In addition to the overall $2,100 OOP cap, the IRA established a separate $35/month cap on insulin for Medicare Part D enrollees. This applies regardless of which coverage phase you're in:

You pay no more than $35/month for covered insulin products
This cap applies even before meeting the deductible
Applies to all covered insulins on your plan's formulary

The insulin cap is separate from the $2,100 OOP cap. Insulin costs subject to the $35 cap still count toward your overall out-of-pocket total.

Extra Help (Low-Income Subsidy)

If your income and assets are limited, you may qualify for Extra Help (also called the Low-Income Subsidy, or LIS), which reduces your Part D costs significantly:

Extra Help Level	Drug Copays	Deductible	Premium Help
Full Extra Help	$4.50 generics / $11.20 brand-name	$0	Full benchmark premium
Partial Extra Help	Reduced copays	Reduced	Partial subsidy

To apply for Extra Help, contact Social Security at 1-800-772-1213 or visit ssa.gov. You may also automatically qualify if you have Medicaid or enroll in a Medicare Savings Program.

Frequently Asked Questions

Yes. The $2,100 out-of-pocket cap resets every January 1. Even if you hit the cap in, say, October, you start fresh the following January. Your OOP accumulation begins at $0 at the start of each calendar year.

The IRA set the 2025 cap at $2,000 and allowed CMS to adjust the cap in subsequent years to account for per-capita increases in Part D drug spending. For 2026, CMS set the cap at $2,100, a $100 increase from 2025. The cap is expected to increase modestly each year going forward.

Yes. Medicare Advantage plans that include prescription drug coverage (MAPD plans) are also subject to the $2,100 OOP cap for Part D drugs. The cap applies uniformly across both standalone Part D plans and MA-PD plans.

Medicare Medical Savings Accounts (MSAs) are a type of Medicare Advantage plan that doesn't cover Part D drugs. You'd need a separate Part D plan for drug coverage. Health Savings Account (HSA) funds can generally be used for Medicare premiums and drug costs, but you cannot contribute to an HSA once enrolled in Medicare.

If your drug isn't covered on your plan's formulary, you can request an exception or appeal. You can also switch to a plan that covers your drug during the Annual Enrollment Period (October 15–December 7). Costs for non-formulary drugs generally don't count toward your out-of-pocket cap.

Disclaimer: MedicareBudget.net provides general educational information about Medicare costs and coverage. We are not affiliated with the Centers for Medicare & Medicaid Services (CMS), Social Security Administration (SSA), or any government agency. This content is not a substitute for advice from a licensed insurance agent, broker, or qualified benefits counselor. Always verify current information at medicare.gov.

Part D Key Numbers 2026

OOP cap: $2,100/year
Max deductible: $590
Base premium: $38.99/mo
Insulin cap: $35/month
2025 OOP cap (prior year): $2,000

Part D Calculators

Part D Cost Calculator Late Enrollment Penalty Total Medicare Cost Check MSP Eligibility

Related Guides

Part D Cost Reference Part D Enrollment Periods Medicare Advantage Guide

Medicare Part D Out-of-Pocket Cap $2,100

Key Part D Numbers for 2026

The Inflation Reduction Act & Part D Reform

The Three Part D Coverage Phases

What Counts Toward the $2,100 Cap?

✓ Does Count

✗ Does NOT Count

Who Benefits Most from the Cap?

Insulin Price Cap

Extra Help (Low-Income Subsidy)

Frequently Asked Questions

Does the $2,100 cap reset each year?

Why did the cap go up from $2,000 to $2,100?

Does the cap apply to Medicare Advantage drug plans (MAPDs)?

Can I use a Medicare Savings Account (MSA) to pay drug costs?

What if my drug isn't on my plan's formulary?