Medicare Prescription Drug Costs
May 20, 2026
Medicare prescription drug costs
What you actually pay for prescriptions under Medicare. Tiers, deductibles, the coverage gap, and how to compare.
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How do I estimate my Medicare drug costs?
List the medications you take, the dose, and how often. Then check each candidate plan's formulary to see what tier each drug is on and the copay or coinsurance at your preferred pharmacy. Medicare.gov's Plan Finder will do this side-by-side.
What is the Part D out-of-pocket maximum in 2026?
$2,000 per year on covered Part D drugs. After you hit it, you pay $0 for the rest of the calendar year for covered prescriptions. Drugs not on your plan's formulary do not count toward this cap.
Why are my drug costs different at different pharmacies?
Most Part D plans have "preferred" pharmacies with lower copays and "standard" pharmacies with higher copays. Mail-order can also lower costs on long-term medications.
Can I spread my drug costs across the year?
Yes. The Medicare Prescription Payment Plan lets you spread your out-of-pocket Part D costs into monthly payments instead of paying all at once at the pharmacy. It is optional and does not change your total cost.
The four cost stages
- Deductible. You pay 100% of drug costs up to the plan's deductible (varies by plan).
- Initial coverage. You pay a copay or coinsurance until total drug costs hit a threshold set by Medicare.
- Coverage gap (donut hole). Historically a phase where you paid more — modern plans have largely closed this, but it still affects high-cost drugs.
- Catastrophic coverage. Once you reach a cap, your share drops significantly for the rest of the year.
What tier each drug is on
Most plans use 4–5 tiers. Tier 1 (preferred generics) is cheapest. Tier 4–5 (specialty drugs) can be much more expensive — sometimes coinsurance instead of a flat copay.
Always check each drug on the plan's formulary BEFORE you switch plans. See our Part D guide.
How to lower drug costs
- Switch to generic equivalents when available
- Use the plan's preferred pharmacy network
- Ask about 90-day mail-order pricing
- Check manufacturer assistance programs for specific drugs
- If you qualify, apply for Extra Help (Low Income Subsidy)
Related guides
More plain-language guides from Medicare Plan Path.