All Medicare drug plans, including Medicare Advantage plans with Part D, have a yearly limit on your qualifying costs for covered Part D drugs. The 2026 limit is $2,100.

What Happens Before and After the Cap?

Your plan’s deductible may apply to some drugs but not others. In Medicare’s standard drug benefit, your share during initial coverage is 25%. Plans can use other approved copayments or percentages. For example, a plan with no deductible may charge 33% for specialty-tier drugs. These differences do not change the yearly limit on qualifying spending. See the cost-sharing rule.

Once qualifying spending reaches the limit, you pay nothing for covered Part D drugs for the rest of that calendar year. Medicare calls this catastrophic coverage.

The limit resets January 1.

What Does Not Count?

The cap applies to qualifying out-of-pocket spending for drugs your plan covers under Part D. It does not generally include:

  • Plan premiums
  • Drugs excluded from Part D
  • Part B-covered medications
  • Amounts paid outside plan coverage that do not meet Part D counting rules

Use an in-network pharmacy and follow the rules for your plan’s covered-drug list, called a formulary, so claims are processed through the plan.

The limit is based on payments that count under Part D rules, not the drug’s full retail price. Your payments and some payments made for you can count. The plan’s usual payments for basic drug benefits do not, although certain extra plan benefits do. Ask the plan for its out-of-pocket spending record if the total does not match what you expect.

What Is the Medicare Prescription Payment Plan?

This optional program lets you spread your Part D out-of-pocket costs across monthly plan bills rather than paying the pharmacy at pickup. It does not reduce your total cost.

Medicare explains the difference on its payment-plan page.

Hypothetical 2026 payment example: someone who joins the payment program in January and immediately has $2,100 in qualifying drug costs could pay $175 a month over 12 months instead of that amount at the pharmacy. Your actual monthly bill depends on when you join and any new costs, so it can change. See Medicare’s payment examples.

Keep 2026 and 2027 Figures Separate

For 2027, the Part D out-of-pocket threshold is $2,400 and the maximum deductible is $700. These are separate from 2026 limits; use CMS’s finalized next-year figures when comparing fall enrollment options.

Medicare policy sources last checked: October 8, 2026.