What the 2026 Medicare Part D Changes Mean for Your Prescription Costs

If you take prescription drugs and have Medicare, 2026 brings some of the biggest changes to Part D in two decades. The new rules were set in motion by the Inflation Reduction Act, signed into law in 2022. Some changes took effect in 2024 and 2025. But the largest shift arrives this year.

Here is a clear breakdown of what changed, what it means for your wallet, and what steps you should take now.

The $2,000 Annual Cap on Out-of-Pocket Costs

The biggest change is simple: starting in 2025 and continuing into 2026, your total out-of-pocket spending on Part D drugs is capped at $2,000 per year. Once you hit that amount, you pay nothing more for covered prescriptions for the rest of the year.

Before this cap, many people with expensive medications could spend $5,000, $8,000, or even more each year. The old system had a “catastrophic” phase where you still paid 5% of drug costs, with no upper limit. That 5% on a $10,000 cancer drug added up fast.

Now that gap is closed. The $2,000 cap covers all your cost-sharing: deductibles, copays, and coinsurance. It does not include your monthly premium.

What to do: Check your 2026 plan documents. The cap applies to all Part D plans, but your monthly premiums and formulary (the list of drugs your plan covers) may have changed.

The Medicare Prescription Payment Plan

You now have the option to spread your out-of-pocket drug costs across the year in monthly payments. This is called the Medicare Prescription Payment Plan.

Instead of paying large sums at the pharmacy counter in January and February (when deductibles hit), you can choose to pay in smaller monthly installments. Think of it like a payment plan, but with no interest and no fees.

Here is how it works:

You opt in through your Part D plan or Medicare Advantage plan
Your plan estimates your total drug costs for the year
That total is divided into monthly payments
You get a bill each month, separate from your premium

Example: Say your out-of-pocket drug costs for the year will be $1,800. Instead of paying $450 at the pharmacy in January for your first refill, you would pay about $150 per month spread over 12 months.

You can opt in at any time during the year. If you join mid-year, your remaining costs are spread over the months left.

What to do: If you take expensive medications and the early-year costs are hard to manage, call your plan and ask to enroll in the Medicare Prescription Payment Plan.

Lower Insulin Costs Continue

The $35 monthly cap on insulin copays, which started in 2023 for Part D plans, remains in place for 2026. This applies to all insulin products covered by your plan, no matter the type.

Before the cap, some people paid $300 or more per month for insulin. Now the most you will pay is $35 for a month’s supply.

This applies to:

All Part D plans (standalone and Medicare Advantage with drug coverage)
All types of insulin (pens, vials, biosimilars)
All phases of Part D coverage (deductible, initial coverage, coverage gap)

What to do: If you use insulin, make sure your specific brand or type is on your plan’s formulary. If your plan dropped your insulin, you may be able to switch plans during open enrollment or request an exception.

Free Vaccines Under Part D

All adult vaccines recommended by the CDC are now covered under Part D with no cost to you. That means $0 copay for vaccines like:

Shingles (Shingrix)
Tdap (tetanus, diphtheria, pertussis)
RSV vaccine
Hepatitis B

Before this change, some Part D vaccines had copays of $50 to $200, which kept many people from getting them. The shingles vaccine alone used to cost some enrollees $150 or more out of pocket.

What to do: If you have been putting off any vaccines because of cost, now is the time. Ask your doctor or pharmacist which vaccines you are due for.

Drug Price Negotiation: 15 More Drugs Selected

The Inflation Reduction Act gave Medicare the power to negotiate prices directly with drug makers for the first time. The first 10 drugs were negotiated in 2024, with lower prices taking effect in 2026.

Those first 10 include:

Eliquis (blood thinner)
Jardiance (diabetes)
Xarelto (blood thinner)
Januvia (diabetes)
Farxiga (diabetes and heart failure)
Entresto (heart failure)
Enbrel (autoimmune conditions)
Imbruvica (blood cancer)
Stelara (autoimmune conditions)
Fiasp/NovoLog (insulin)

For 2027, Medicare has selected 15 more drugs for negotiation. Those new prices will take effect in January 2027.

If you take any of the first 10 drugs, you should see lower costs at the pharmacy starting this year. The exact savings depend on your plan and what you were paying before.

What to do: Ask your pharmacist if any of your drugs are on the negotiated list. If so, check whether your costs have dropped. Some plans may have adjusted their formularies, so read your plan materials carefully.

Inflation Rebates Protect You From Price Hikes

Drug companies that raise prices faster than inflation must now pay rebates back to Medicare. This rule has been in effect since 2023 and continues through 2026.

What this means for you: if a drug company raises the price of your medication faster than the rate of inflation, you will not bear the extra cost. The rebate keeps your cost-sharing tied to the inflation-adjusted price.

You will not see this on your pharmacy receipt. It happens behind the scenes. But it is one of the reasons drug prices in Part D have been more stable over the past two years.

How to Check Your Specific Plan

Every Part D plan is different. Premiums, formularies, pharmacy networks, and tier structures all vary. Here is how to review your plan for 2026:

Log into Medicare.gov. Use the Plan Finder tool to compare your current plan with others in your area.
Review your Annual Notice of Change (ANOC). Your plan mailed this to you in the fall. It lists every change for 2026.
Call your plan directly. Ask about any drugs that moved tiers, any new prior authorization requirements, and whether your pharmacy is still in network.
Talk to a SHIP counselor. Every state has a State Health Insurance Assistance Program. These counselors give free, unbiased help with Medicare questions. Call 1-877-839-2675 to find your local office.

Common Questions

Does the $2,000 cap apply to Medicare Advantage plans with drug coverage? Yes. It applies to all Part D plans, including those bundled into Medicare Advantage.

Does the cap include my premium? No. The $2,000 cap only counts what you pay at the pharmacy: deductibles, copays, and coinsurance. Your monthly premium is separate.

What if I already hit the old catastrophic phase early in the year? Under the new rules, once you reach $2,000 in out-of-pocket costs, you are done paying for covered drugs that year. There is no more 5% coinsurance in catastrophic coverage.

Can I still use GoodRx or discount cards with Part D? You can, but amounts paid through discount cards do not count toward your $2,000 cap. Only amounts paid through your Part D plan count. In most cases, using your Part D benefit is the better choice so your spending counts toward the cap.

The Bottom Line

The 2026 Part D changes are good news for most people on Medicare. The $2,000 annual cap protects you from runaway drug costs. The payment plan helps you budget. Negotiated drug prices are starting to show up at the pharmacy counter.

But plans still vary. Formularies change. Preferred pharmacies shift. Take 30 minutes this month to review your plan and make sure it still fits your needs.

If your drugs cost more than expected or your plan dropped a medication, you may qualify for a Special Enrollment Period to switch plans. Contact Medicare at 1-800-633-4227 or visit Medicare.gov.

Reported by Margaret Chen with additional research from the SeniorDaily editorial team. For corrections or updates, please contact us.