Prescription drug costs can be one of the most unpredictable parts of an older adult’s health care budget, especially as their medication needs change over time. Medicare Part D is designed to help cover these costs, but how much they pay depends on several factors including their plan, their medications, and how their spending adds up over the year.
Part D updates in 2025—specifically, the elimination of the coverage gap—have simplified the program’s structure, making it easier for beneficiaries to understand what costs they might be responsible for at different points.
How much will Medicare Part D cost in 2026?
The Part D phases below determine how much beneficiaries will pay in out-of-pocket costs throughout the year:
- Deductible period: During this phase, beneficiaries pay 100% of the cost of their presciption medications until the deductible has been reached. The maximum deductible for Part D plans in 2026 is $615. However, some plans have a lower (or zero-dollar) deductible with a higher premium. Once beneficiaries reach their deductible, they enter the initial coverage period.
- Initial coverage period: In this phase, beneficiaries pay 25% of their prescription drug costs—typically in the form of coinsurance or copayments. The Part D plan pays 65% of costs, while the drug manufacturer is responsible for 10%. Out-of-pocket costs (including the Part D deductible, copayments, and coinsurance) are capped at $2,000 in 2025. After beneficiaries reach this limit, they enter the catastrophic coverage phase.
- Catastrophic coverage: In this phase, the Part D plan pays 60% of drug costs, the drug manufacturer pays 20%, and Medicare pays 20%. Beneficiaries pay nothing for covered medications for the rest of the calendar year.
Our infographic below explains who pays what in the different phases of Medicare Part D coverage in 2026.
To better understand how Part D works and how much your clients may have to spend, check out our 2026 Part D Standard Plan Cost-Sharing Chart.
