Episode 5 Block 0 Published
Medicare Part D: How Prescription Drug Coverage Works in 2026
Watch on YouTube Medicare Part D prescription drug coverage was transformed by the Inflation Reduction Act: the coverage gap is eliminated, out-of-pocket costs are capped at $2,100 in 2026, insulin is capped at $35/month, and ten high-cost drugs have negotiated prices. This episode breaks down all three benefit phases, how formulary tiers work, and why the late enrollment penalty is permanent. Watch the next video to learn about every Medicare enrollment period and the windows that determine your coverage for life.
▶ Watch next: Every Medicare Enrollment Period Explained: Timelines That Cost Thousands https://www.youtube.com/watch?v=_HRr4BI3fAY
📺 Full playlist: Medicare (US - 2026) https://www.youtube.com/playlist?list=PLlIAFxS29648I08akd—o7PeoOBzdOb2S
Chapters
Part D covers prescription drugs through private plans (standalone PDPs or built into Advantage plans). The Inflation Reduction Act of twenty twenty-two transformed Part D: the donut hole coverage gap was eliminated in twenty twenty-five, out-of-pocket drug costs are now capped (two thousand one hundred dollars in twenty twenty-six), insulin is capped at thirty-five dollars per month, and CMS is negotiating prices directly with drug manufacturers for the first time. This episode explains the new three-phase benefit structure and what the IRA changes mean for your wallet.
Key Topics
- The three phases of Part D in twenty twenty-six: deductible phase (up to five hundred ninety dollars), initial coverage phase (plan pays its share), and catastrophic phase (you pay zero dollars after hitting the two thousand one hundred dollar annual out-of-pocket cap)
- The donut hole is gone — eliminated by the Inflation Reduction Act starting in twenty twenty-five
- The two thousand one hundred dollar annual out-of-pocket cap: once you hit it, all covered drugs cost zero dollars for the rest of the year
- Insulin cap: thirty-five dollars per month for all Part D insulin products
- The first ten negotiated drug prices taking effect in twenty twenty-six — savings of thirty-eight to seventy-nine percent on drugs like Januvia, Eliquis, Jardiance, and Xarelto
- Formulary tiers: why the same drug costs different amounts on different plans, and how to check if your drugs are covered before enrolling
- The Part D late enrollment penalty: one percent of the national base premium for every month you went without creditable coverage — this penalty is permanent