Medicare
Medicare Part D
Medicare Part D covers prescription drugs and features a $2,100 out-of-pocket cap in 2026, ending the coverage gap that previously left beneficiaries with full costs.
Last reviewed: May 2026 · Editorial methodology
Definition
Medicare Part D is the outpatient prescription drug benefit for Medicare beneficiaries, available either as a stand-alone Prescription Drug Plan (PDP) added to Original Medicare or built into a Medicare Advantage Prescription Drug (MAPD) plan. Part D plans are offered by private insurers approved by CMS and must cover a minimum set of drugs — though formularies, tiers, and cost-sharing vary significantly by plan. The Inflation Reduction Act overhauled Part D cost-sharing, with the out-of-pocket cap set at $2,100 in 2026 — meaning once you spend $2,100 in qualifying drug costs in a calendar year, your Part D cost-sharing drops to $0 for covered drugs for the remainder of the year. The Medicare Prescription Payment Plan (M3P) allows beneficiaries to spread Part D out-of-pocket costs across the year in monthly installments rather than paying in full at the pharmacy. A late enrollment penalty applies if you go 63+ continuous days without creditable prescription drug coverage after your Initial Enrollment Period ends, and this penalty is permanent.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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