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The $2,100 out-of-pocket cap

Once your out-of-pocket drug spending reaches $2,100 in 2026, you pay $0 for covered prescriptions for the rest of the year.

$2,100
2026 annual cap
$0
Your cost after the cap

How the cap works

The out-of-pocket cap limits the total amount you pay for covered Part D prescription drugs each year. In 2026, that limit is $2,100. Once your out-of-pocket costs reach this amount, you enter the catastrophic coverage phase and pay nothing for covered drugs for the rest of the calendar year.

This cap was introduced by the Inflation Reduction Act and first took effect in 2025 (at $2,000). For 2026, it increased to $2,100.

What counts toward the cap

  • Your deductible payments
  • Your copays and coinsurance
  • Amounts you pay during the deductible phase

What does NOT count

  • Your monthly Part D premiums
  • Costs for drugs not on your plan's formulary
  • Costs for drugs covered under Medicare Part B

Spread your costs with the Payment Plan

The Medicare Prescription Payment Plan (M3P) lets you spread your out-of-pocket drug costs into predictable monthly installments, rather than paying large amounts at the pharmacy. Learn more about M3P →