Medicare questions
What Is the Medicare Part D Out-of-Pocket Cap?
The Medicare Part D out-of-pocket cap is $2,100 in 2026. Once your spending on covered prescription drugs reaches that amount, your plan pays the full cost of covered drugs for the rest of the year. CMS announces the final 2027 cap figure in late September 2026.
Written by the licensed advisor team at Pinnacle Insurance Advisors · Last updated July 29, 2026
How the $2,100 cap works in 2026
Every Medicare Part D drug plan, whether it is a standalone plan or built into a Medicare Advantage plan, now has a hard annual limit on what you pay for covered prescriptions. In 2026 that limit is $2,100. Your deductible, which can be as high as $615 in 2026, and every copay or coinsurance amount you pay for covered drugs all count toward the cap.
Once your out-of-pocket spending reaches $2,100, you pay nothing more for covered Part D drugs for the rest of the calendar year. The plan picks up the full cost. You also have the option to spread your drug costs into monthly payments through the Medicare Prescription Payment Plan, which every Part D plan must offer. It does not lower what you owe, but it can make a large January pharmacy bill easier to manage.
What does not count toward the cap
The cap only applies to drugs that are covered by your plan. Your monthly plan premium does not count. Neither does anything you spend on drugs that are not on your plan's formulary, drugs you buy with cash or a discount card outside your plan, or vaccines and infusions billed under Part B at the doctor's office.
This is the caveat that surprises people most. If a medication is not on your plan's list of covered drugs, that spending never touches the cap, no matter how large it is. That is why checking the formulary matters just as much as checking the premium when you compare plans each fall.
The cap resets in January, and the amount changes each year
The out-of-pocket cap starts over every January 1, and the dollar amount is adjusted annually. CMS announces the final 2027 figures in late September 2026, and your plan's Annual Notice of Change, which arrives by September 30, shows exactly what your costs will look like for the coming year.
If your drug costs are high, the Annual Enrollment Period from October 15 to December 7 is the time to compare plans for 2027. A licensed advisor can check your exact medication list against every plan in your area at no cost.
For a free review of your drug coverage before the new year, call Pinnacle Insurance Advisors at 1-877-826-0053.