The Four Main Part D Cost Components
Medicare Part D costs consist of four main components that work together to determine your total annual spending on prescription drugs:
- Monthly premium - paid to your plan every month regardless of drug use
- Annual deductible - amount you pay before the plan starts covering drugs (up to $615 in 2026)
- Copays and coinsurance - your share of each prescription based on the drug's tier
- IRMAA surcharge - additional amount for higher-income beneficiaries
2026 Part D Deductible
The maximum Part D deductible in 2026 is $615. Many plans charge less than the maximum, and some waive the deductible entirely for Tier 1 and Tier 2 (generic) drugs. You pay the full cost of your medications until you meet your deductible.
Plans cannot charge more than $615 for the 2026 deductible, but they can charge less. Always check whether your specific medications are subject to the deductible before choosing a plan.
Copays and Coinsurance by Drug Tier
After meeting your deductible, you pay a copay or coinsurance for each prescription based on the drug's tier:
| Tier | Drug Type | Typical Cost-Sharing |
|---|---|---|
| Tier 1 | Preferred Generic | $0 – $15 copay |
| Tier 2 | Generic | $5 – $25 copay |
| Tier 3 | Preferred Brand | $25 – $60 copay |
| Tier 4 | Non-Preferred Brand | $60 – $150 copay |
| Tier 5 | Specialty | 25% – 33% coinsurance |
$2,000 Out-of-Pocket Cap (2025 and Beyond)
Starting in 2025, Medicare Part D has a $2,000 annual out-of-pocket cap on covered drug costs. Once you reach $2,000 in cost-sharing (deductibles, copays, and coinsurance), you pay $0 for covered drugs for the rest of the year. This cap does not include premiums or IRMAA surcharges.
The Medicare Prescription Payment Plan (M3P) lets you spread your out-of-pocket costs evenly across the year in monthly installments rather than paying large amounts at once.
IRMAA: Income-Related Part D Surcharges
Higher-income beneficiaries pay an additional monthly surcharge on top of their plan premium. IRMAA is based on your income from two years prior.
| Individual Income (2024) | Monthly IRMAA Surcharge (2026) |
|---|---|
| $109,000 or less | $0 |
| > $109,000 and < $137,000 | $14.50 |
| > $137,000 and < $171,000 | $37.50 |
| > $171,000 and < $205,000 | $60.40 |
| > $205,000 and < $500,000 | $83.30 |
| > $500,000 | $91.00 |