Prescription costs: the yearly cap, $35 insulin and spreading payments

Medicare drug coverage now has firm limits on what you pay for covered drugs. Here's how they work.

A yearly cap on drug costs

• 2026: your out-of-pocket costs for covered Part D drugs are capped at $2,100.
• 2027: the cap rises to $2,400.

Your deductible, copays and coinsurance count toward the cap, and so do certain payments made for you, like Extra Help. Your monthly premium doesn't. Once you reach the cap, you pay $0 for covered Part D drugs for the rest of the year. The cap applies to everyone with Medicare drug coverage, whether through a drug plan or a Medicare Advantage plan.

If you buy a drug with a discount card or coupon instead of your plan, that purchase doesn't count toward your deductible or the cap.

Insulin: no more than $35 a month

A one-month supply of each covered insulin product costs no more than $35, and the deductible doesn't apply. Part D covers insulin you inject with a pen or needle, insulin for disposable patch pumps, and inhaled insulin. If you use a traditional insulin pump covered as medical equipment, Part B covers the insulin, with a similar cost limit.

Vaccines at no cost

Part D plans can't charge a copay or deductible for vaccines the CDC's advisers recommend. Part B covers flu, COVID-19, pneumococcal and hepatitis B shots at no cost.

Spreading costs over the year

The Medicare Prescription Payment Plan lets you pay your Part D drug costs in monthly bills from your plan instead of all at once at the pharmacy. Every plan offers it, it's free, and you can join any time by calling your plan. It doesn't lower your costs; it spreads them out.

• It helps most if you have high drug costs early in the year.
• It's usually not worth it if your drug costs are low or steady, if you'd start late in the year (after September), or if you get Extra Help or a Medicare Savings Program.
• If you miss a payment, you get a reminder; if you still don't pay, you're removed from the payment plan. There's no interest or late fee.
• You stay in it the next year unless you change plans or tell your plan you want out.

Negotiated drug prices

Medicare negotiates prices for some expensive brand-name drugs. The first 10 negotiated Part D prices started January 1, 2026, and 15 more start January 1, 2027. Ask your plan how they affect what you pay.

If your income is limited, Extra Help can lower your costs much more than any of these, and some states have their own drug assistance programs.