Estimate your 2026 Medicare Part D prescription drug costs. Includes Extra Help eligibility and the new $2,000 out-of-pocket cap that protects against high drug costs.
Medicare Part D is prescription drug coverage for Medicare beneficiaries. It is offered through private insurance companies approved by Medicare and is available as a standalone Part D plan (PDP) for Original Medicare beneficiaries, or bundled into a Medicare Advantage plan (MA-PD). In 2026, the average Part D premium is $46.50/month for standalone plans.
Part D plans organize drugs into tiers. Tier 1 (preferred generics) typically costs $4–$10/fill. Tier 2 (generics) costs $10–$20/fill. Tier 3 (preferred brand-name drugs) costs $40–$50/fill. Tier 4 (non-preferred brand drugs) costs $90–$100/fill. Tier 5 (specialty drugs) can cost $200–$500+/fill. Before these copays apply, most plans have a deductible of up to $590/year (some plans waive the deductible for lower-tier generics).
The landmark 2026 change: the Inflation Reduction Act capped out-of-pocket drug costs at $2,000/year for Part D enrollees. Once you spend $2,000 on covered drugs, you pay $0 for the rest of the year. This eliminates the previous "donut hole" coverage gap and catastrophic spending phase, providing meaningful protection for beneficiaries with high drug costs. The $2,000 cap includes your deductible and copays — but not your monthly premium.
Dorothy is 68 and takes 3 prescriptions: one preferred generic (Tier 1 — $7/fill), one generic (Tier 2 — $15/fill), and one brand-name drug (Tier 3 — $45/fill). Her plan has a $590 deductible and a $42/month premium.
Dorothy's total Part D spending is manageable. If she were on a specialty drug, her costs might hit the $2,000 cap, after which she pays $0 for the rest of the year. Dorothy should review her Part D plan each year during open enrollment to ensure her drugs are still covered at favorable tiers, as formularies change annually.
Extra Help (Low Income Subsidy)
If your annual income is at or below $23,340 (individual) or $31,860 (couple), you may qualify for Extra Help — a federal program that can reduce your Part D premium to near $0, eliminate your deductible, and cap your drug copays at $1–$10. An estimated 2 million Medicare beneficiaries qualify for Extra Help but are not enrolled. Apply through Social Security at 1-800-772-1213 or ssa.gov. If approved, you can enroll in a Part D plan at any time — you don't have to wait for open enrollment.
Annual Formulary Review
Your Part D plan's formulary — the list of covered drugs and their tier assignments — changes every year. A drug covered at Tier 2 this year might move to Tier 3 next year, significantly increasing your cost sharing. Review the Annual Notice of Change (ANOC) sent by your plan each September. During the October 15 – December 7 open enrollment period, use Medicare's Plan Finder tool at medicare.gov to compare plans based on your specific drugs and preferred pharmacies.
Preferred Pharmacy Networks
Most Part D plans have preferred pharmacy networks offering lower cost sharing. Using your plan's preferred pharmacy can save $5–$20 per prescription compared to a standard network pharmacy. Mail-order pharmacies often offer additional discounts for 90-day supplies of maintenance medications. When comparing Part D plans, check whether your preferred pharmacy is in the plan's preferred network — this can significantly affect your annual drug costs.
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Medicare Part D covers prescription drugs. Part D plans are offered by private insurance companies approved by Medicare and cover both brand-name and generic prescription drugs. Each plan has its own formulary — a list of covered drugs organized into tiers, with different cost sharing at each tier. Tier 1 (preferred generics) typically has the lowest copays ($0–$10/month), while Tier 5 (specialty drugs for conditions like cancer and rheumatoid arthritis) can cost hundreds per month. Part D plans also cover some vaccines, insulin, and drugs used in cancer treatment. Coverage for specific drugs varies by plan.
The maximum Medicare Part D deductible in 2026 is $590/year. Many plans charge the full maximum deductible, though some plans have lower or $0 deductibles (usually with higher monthly premiums). The deductible applies to most drugs before your plan starts sharing costs, though some plans waive the deductible for lower-tier generics. After meeting your deductible, you pay your plan's cost sharing (copays or coinsurance) for each prescription. The 2026 deductible represents a small increase from prior years as Part D deductible limits adjust annually with program cost changes.
Extra Help (also called Low Income Subsidy or LIS) is a federal program that helps people with limited income and resources pay for Part D costs. In 2026, you may qualify if your annual income is at or below $23,340 (individual) or $31,860 (couple), with limited assets. With full Extra Help, your monthly premium may be $0–$10, your deductible may be eliminated, and your drug copays may be reduced to $1–$10 for generics and $3–$30 for brand-name drugs. Apply through Social Security at 1-800-772-1213 or ssa.gov. Many eligible beneficiaries don't know they qualify — an estimated 2 million Medicare beneficiaries who qualify for Extra Help are not enrolled.
This is a major new benefit starting in 2024 and fully implemented in 2026. Once you spend $2,000 in out-of-pocket costs on covered Part D drugs in a calendar year, you pay $0 for covered drugs for the rest of the year — no matter how many prescriptions you need. This "catastrophic coverage" threshold replaces the old system where Part D had no true out-of-pocket cap. The $2,000 limit counts your deductible, copays, and coinsurance — not your monthly premium. For Medicare beneficiaries with expensive specialty drugs or brand-name medications, this cap provides significant financial protection.
You can change your Part D plan during the Annual Enrollment Period (October 15 – December 7), with changes taking effect January 1. You can also change plans during a Special Enrollment Period if you qualify — such as if you move out of your plan's service area, lose creditable drug coverage, qualify for Extra Help, or first become eligible for Medicare. There is also a Medicare Advantage Open Enrollment Period (January 1 – March 31) that allows switching between MA plans or from MA to Original Medicare (with a new Part D plan). It's worth reviewing your Part D coverage each year during open enrollment, as formularies, premiums, and tier assignments change annually.
Medicare Disclaimer
These calculators provide estimates based on 2026 Medicare data for educational purposes only. Actual drug costs vary by plan and pharmacy. Contact Medicare at 1-800-MEDICARE or medicare.gov for official plan comparison. Not affiliated with Medicare or the US government.