For 2026, the Medicare standard Part D standalone prescription drug plans will have a $615 pharmacy deductible and $2,100 maximum out-of-pocket amount. After you have met the deductible, the drug costs drop to 25 percent in the initial coverage phase, this excludes insulin.
Higher Deductible and MOOP
Once you have met the $2,100 maximum out-of-pocket amount of the drug plan, the plan covers all prescription drug costs for the remainder of the calendar year.
Some people will not meet the pharmacy deductible until later in the year. Then the drug costs drop to approximately 25 percent. Some drug plans will have drug copays that might be slightly higher or lower than 25 percent of the retail costs. Some people will not meet the maximum out-of-pocket amount during the year.
Other Medicare beneficiaries, with expensive medications, will meet the pharmacy deductible in the first month. The remaining months will have lower drug costs. Some of these folks will meet the maximum out-of-pocket amount of $2,100.
This graph shows how a drug plan member meets the pharmacy deductible in January. The drug costs drop to $200 per month. In September, the plan member has met the maximum out-of-pocket amount and they pay $0 for their drugs for the rest of the year.
Alternate Part D Cost Structures
Medicare allows alternate cost structure designs. These designs must be as good as the standard cost structure. One alternate structure only has drugs in tiers 3, 4, 5 subject to the pharmacy deductible. Generic drugs, tiers 1 and 2, are not subject to any deductible. The plan member goes straight into a set copayment or coinsurance for the prescriptions.
Another cost structure design has no pharmacy deductible. The plan member goes immediately into copayments and coinsurance for all drugs. However, the coinsurance and copayments can be higher than 25 percent of the retail cost of the drug.
Extra Help for Drug Costs
All drug plans, regardless of cost structure design, will have a maximum out-of-pocket amount of $2,100. Not all drugs may be covered across all of the plans. In addition, some plans may have your drugs in different drug tiers, making them more or less expensive. Medicare.gov has a good Part D drug cost estimator tool.
The Medicare Prescription Drug Payment Plan will be available in 2026. Social Security offers the Part D Low Income Subsidy program. If you are not eligible for Medi-Cal or Medicaid, you may still be eligible for extra help for paying for your prescription drug medications.
YouTube video on the different Part D cost structures.
