What’s Changing for Medicare Part D in 2026 and How It Affects Your Drug Costs
Medicare Part D will undergo notable changes in 2026 that affect nearly every enrollee’s out-of-pocket drug costs. The deductible will rise from $590 in 2025 to $615 in 2026, marking a $25 increase. At the same time, the catastrophic cap the point where out-of-pocket expenses end will increase from $2,000 to $2,100. These adjustments may seem small, but they can add up for individuals who rely on regular prescriptions. Under the new structure, patients will continue to pay 100% of their drug costs until meeting the deductible, then 25% of costs during the initial coverage phase, and nothing once they reach the catastrophic limit.
To understand how these changes impact your wallet, it helps to review the three distinct phases of Medicare Part D coverage. The first is the deductible phase, where beneficiaries pay all prescription costs out of pocket until they hit the $615 threshold. After that comes the initial coverage phase, where patients are responsible for 25% of medication costs while their plan covers the remaining 75%. Once total spending (including both patient and plan contributions) reaches $2,100, beneficiaries enter the catastrophic coverage phase meaning they’ll pay $0 for covered medications for the rest of the calendar year. This final stage provides significant relief for those managing chronic or high-cost prescriptions.
Even if you aren’t currently taking any medications, enrolling in a Medicare Part D plan is essential. Without coverage, you could face astronomical costs for unexpected prescriptions, which can range from $5,000 to $13,000 per month. There’s also a steep financial penalty for delaying enrollment: if you go more than 63 days without creditable drug coverage after becoming Medicare eligible, you’ll incur a 1% penalty per month based on the national premium price. Since the average Part D premium is around $35, this penalty can quickly add up and become permanent.
There are several ways to obtain prescription drug coverage depending on your situation. Those with employer-sponsored plans may not need a separate Part D plan as long as their coverage is considered creditable (meaning it’s at least as good as Medicare’s standard). If you’re on Original Medicare or have a supplemental plan, you’ll need to add a standalone Part D plan to ensure your medications are covered. Beneficiaries enrolled in Medicare Advantage (Part C) plans typically already have prescription drug coverage included, so no additional plan is necessary.
Another key aspect to review each year is your plan’s formulary the list of covered medications. Formularies can change annually, and a drug you rely on today might not be covered next year. It’s important to confirm that your prescriptions remain on the list during the annual enrollment period to avoid unexpected costs. If your medication is dropped, your doctor can request a formulary exception or help identify an alternative. For drugs not covered at all, affordable options like GoodRx and Mark Cuban’s Cost Plus Drugs can offer substantial discounts, sometimes undercutting insurance copays.
These upcoming Medicare Part D changes make 2026 an important year for beneficiaries to stay informed and proactive. Reviewing your coverage, checking your formulary, and understanding your costs in each coverage phase can help you plan ahead, avoid penalties, and protect yourself from high out-of-pocket expenses. Even small adjustments to Medicare’s structure can have a big impact on your healthcare budget especially for retirees managing fixed incomes and multiple prescriptions.
