Several significant changes are coming to Medicare Part D in 2026, many as a result of provisions included in the Inflation Reduction Act. These changes have the potential to significantly affect how much beneficiaries pay for prescription drugs, with some changes likely to produce meaningful savings and others potentially increasing costs for some enrollees. Understanding these changes will be important to anyone on a Medicare drug plan.
1. Higher Out-of-Pocket Cap: The $2,100 Ceiling
Among the more consequential changes is the increased MOOP limit for prescription drugs under Part D. In 2026, this cap rises from $2,000 in 2025 to $2,100.
Why it’s happening:
This is a raise due to indexing for inflation-the cap is designed to adjust.
What that means for you:
Once you pay $2,100 in out-of-pocket costs for covered drugs (including deductibles, copays, and coinsurance, excluding premiums), you don’t pay any more for covered Part D drugs for the rest of the year.
The flip side:
While the cap protects against runaway costs, the increase means beneficiaries in 2026 will have to pay as much as $100 more before reaching that safety net.
Why this matters:
For people on high-cost medications, the out-of-pocket cap is a critical protection. If your drug regimen involves just moderate but steady costs, though, that extra $100 could be meaningful — especially early in the year before you hit the MOOP.
2. Larger Deductible: Slight Increase for 2026
Another shift that could raise your costs: The standard Part D deductible is going up. In 2026, the maximum deductible for Part D plans is $615, up from $590 in 2025.
What you pay:
Until you hit this deductible threshold, you’re responsible for all your drug costs – although there is a big exception, which we’ll get to in a minute.
Whose plans are affected:
This applies to plans that use the “defined standard” benefit design. Some plans may set a lower deductible or structure cost-sharing differently, so not everyone will pay the full $615.
Why this could hurt:
If you take many medications early in the year, or expensive ones, the higher deductible increases the annual spending burden before hitting the coverage phases.
The impact of this, however, depends heavily on your plan and drug use pattern:
For some, it may not matter much; for others, it could add up.
3. Insulin Cost Cap Becomes Even More Valuable
The $35 per month cost cap for insulin remains in 2026, and crucially, the deductible will not apply to insulin that is covered under Part D win for so many people living with diabetes.
How it works:
The IRA requires Medicare to limit monthly cost-sharing for insulin to the lesser of: a) $35, b) 25% of the negotiated or “fair price” for insulin when it’s part of the drug negotiation program, or c) 25% of other negotiated prices.
Why it’s helpful:
This keeps insulin predictable and affordable for monthly budgeting. For many users of insulin, that $35 cap may be significantly lower than what they otherwise would pay based on coinsurance or tiered pricing.
ONE Advisory Partners (Staging)
Long-term benefit: Making the cap permanent for 2026 and beyond provides continued protection for insulin users, shields them from spikes in costs, and ensures they will not face a deductible hit for insulin.
Takeaway:
This is one of the clearest “cut” changes. If you are on insulin, 2026 continues to offer you strong protections. But as always, check with your plan to see if your specific insulin product is covered.
4. Drug Price Negotiations: New Lower Prices for Key Medications
One of the biggest structural changes driving savings: Medicare’s first-ever drug price negotiations. Starting January 1, 2026, 10 Part D drugs will have lower negotiated prices that could reduce what beneficiaries pay for them in copays or coinsurance.
Which drugs:
Examples include Eliquis (blood thinner), Januvia (diabetes), Entresto (heart failure), Xarelto, Stelara, and certain insulins like Fiasp/NovoLog.
Savings scale:
According to the Medicare Rights Center, these negotiated discounts could save beneficiaries a significant amount on these 10 drugs.
Medicare Rights Center
Who benefits most: Individuals who take any one of these 10 drugs, or others that will be added in future negotiation rounds, may see reduced cost-sharing, particularly if their plan ties cost shares to the negotiated prices.
Caveat:
The savings depend a lot on how your Part D plan implements cost-sharing and how it sets tiers for these drugs. Not all plans pass on the full benefit, so for some people, the reductions could be modest; others may benefit more.
Why it matters:
Of all the different levers to reduce prescription drug spending, this may be the most policy-driven for high-cost, chronic-use drugs. If you use one of the negotiated drugs, 2026 could bring real relief — but you may need to check if your plan’s structure maximizes the benefit.
5. Smoother Payments: Auto-Renew of the Prescription Payment Plan
A more practical but important change relates to how you pay: in 2026, Medicare Part D’s Prescription Payment Plan gets automatic reenrollment for people already using it-unless they opt out.
ONE Advisory Partners (Staging)
What the PPP is: It’s a program that lets you spread your out-of-pocket Part D costs evenly throughout the year, rather than paying large sums when you pick up prescriptions.
Change to auto-enrollment:
Instead of having to sign up every year, beneficiaries are automatically reenrolled, reducing the hassle and risk of forgetting.
Why it helps:
For many people, but especially for those on high-cost or frequent meds, paying via PPP gives better cash-flow management. Large monthly spikes-e.g., buying many drugs in one month-can be financially stressful; spreading the cost smooths out the burden.
Downside risk:
The downside of automatic reenrollment would be if, for example, the plan changed (e.g., premium and cost-sharing changes) and you wanted to opt out. However, you would receive a renewal notice before the next enrollment period.
ONE Advisory Partners (Staging)
- Bonus Change: Free Vaccines Stay & More Stability
- Beyond the five big hits, there are another two changes worthy of note that further shape the 2026 Part D landscape
- Free adult vaccines: Part D plans are required to continue covering ACIP-recommended adult vaccines with no cost sharing (i.e., no deductible, no copay) in 2026.
Premium stability/decline:
Per CMS, the average Part D premiums are actually expected to decline in 2026-the average stand-alone Part D plan premium could decrease from ~$38.31 in 2025 to ~$34.50 in 2026, and Part D premiums in Medicare Advantage plans may also decline.
These elements help to balance some of the cost-increasing changes, particularly for those with moderate use of Part D services.
Who’s likely to benefit – and who might pay more
Putting all these changes together, who wins and who loses?
Likely to benefit/save more:
- People, on the 10 negotiated drugs, especially for chronic conditions like diabetes or heart failure, may pay less per prescription.
- Insulin users will also benefit from the $35 cap with no deductible on insulin.
- Beneficiaries who take many medications and hit the out-of-pocket cap $2,100 MOOP are protected, though modestly higher.
- Those concerned about cash flow appreciate that PPP automatic enrollment helps to spread out the costs of drugs.
Could pay more / face added burden:
- People who do not take very expensive drugs but still pay moderate costs: the higher deductible, $615, and the higher cap on out-of-pocket, $2,100, may slightly raise their annual burden.
- Beneficiaries on drugs not negotiated: costs for them may not be lower, and the plan’s structure (copays or coinsurance) may remain unfavorable.
- People who rely heavily on low-tier or generic drugs and have very tight budgets may still feel the pain of early-year costs before the deductible or initial coverage phases.
Practical Tips: What You Should Do
Given this shake-up, here are some actionable strategies for Medicare beneficiaries going into 2026: Review plans during Open Enrollment, compare Part D plans carefully. Consider not just premiums, but how each plan treats your specific drugs (tiering, cost-sharing). Use Medicare.gov’s plan finder to simulate your total drug spending under different plans. Check if you’re on a negotiated drug. If you take one of the 10 drugs whose prices are negotiated, check how your Part D plan handles them.
Confirm how cost-sharing (copay or coinsurance) is calculated once the negotiated price kicks in. Use the Prescription Payment Plan (PPP). If you already use PPP, be aware of the automatic reenrollment and review your renewal notice. If you don’t use PPP but have problems with cash flow, consider enrolling to spread your costs throughout the year.
Budget for the higher deductible and cap. Even with these protections, some early-year cash burden may increase: plan your drug pickups, refill schedules, and budget accordingly. Contact your plan’s customer service to learn exactly when and how your deductible and cost-sharing apply. Stay updated. Watch for updates from CMS; additional changes may be part of the 2026 Part D “redesign” policies. CMS If costs are high, especially for non-negotiated or expensive drugs, ask your healthcare provider or pharmacist about alternative options to the drug being prescribed.
Conclusion
The changes that Medicare has made to Part D, effective in 2026, are the result of a balancing act. On one hand, the system is seeking to make drug costs predictable and more affordable through negotiated prices, an insulin cap, and PPP. At the same time, it aims to maintain sustainability via deductibles and indexed OOP caps.
For many beneficiaries, 2026 does bring real opportunities for savings-especially those taking negotiated drugs or insulin-but not universally so. Everything depends greatly on your personal drug mix, your Part D plan’s structure, and how you manage your spending across the year.
Takeaway: Your 2025 plan may not be the best for you in 2026. Re-evaluate, run numbers, and choose a plan through Open Enrollment that best matches your needs for medications and fits within your budget.
FAQs
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What new drug price negotiations will take place in 2026?
A: In 2026, Medicare will start paying negotiated “maximum fair prices” for 10 high-cost Part D drugs; the costs for those medicines could drop dramatically.
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How will the OOP cap change in 2026?
A: For Part D prescription drugs, the OOP cap goes up to $2,100 in 2026, from $2,000.
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What happens to the Part D deductible next year?
A: The maximum Part D deductible increases to $615 in 2026.
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How do manufacturer discounts change under the new rules?
A: Manufacturers now provide a 10% discount on brand-name drugs in the initial coverage phase, and a 20% discount in the catastrophic phase.
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What’s changing about Medicare’s reinsurance payments?
A: In the catastrophic phase, the Medicare reinsurance share drops significantly: to 20% for brand-name drugs and 40% for generics, shifting more cost burden to plans and manufacturers.
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Will all Part D plans cover the 10 negotiated drugs?
A: Yes – Medicare mandates that those 10 drugs be part of the formularies both for the stand-alone Part D plans and for MA-PD plans.