As of January 1, 2026, Medicare Part D prescription drug plans now cap out-of-pocket costs at $2,100 per year — after which the plan pays 100% of drug costs for the remainder of the year. This is the second year of the Inflation Reduction Act's drug cost reforms, following the $2,000 cap introduced in 2025. Combined with the ten negotiated drug prices now in effect, many seniors are seeing their annual prescription costs fall by hundreds or even thousands of dollars. Enrollees in low-income subsidy programs may qualify for even lower costs. The new cap is particularly beneficial for seniors managing multiple chronic conditions requiring expensive specialty medications.

When the negotiated prices go into effect in 2026, people enrolled in Medicare prescription drug coverage would save an estimated $1.5 billion.

Source: Centers for Medicare & Medicaid Services (CMS) →