How the cap works
Once your out-of-pocket spending on covered Part D drugs (deductible, copays and coinsurance) reaches the annual cap, you pay nothing more for covered drugs for the rest of the calendar year. The old “donut hole” coverage gap no longer exists.
Spread costs with the Prescription Payment Plan
The Medicare Prescription Payment Plan lets you pay your out-of-pocket drug costs in monthly installments across the year instead of all at once at the pharmacy. It does not lower your total costs, but it can help with budgeting if you take expensive medicines. Ask your plan to opt in.
What does not count
- Your monthly Part D premium.
- Drugs not on your plan’s formulary (unless you get an exception).
- Drugs bought outside your plan.
Compare formularies during Medicare open enrollment.
General information, not medical, legal or insurance advice. This post reflects the position on the date shown. Check the official sources below for the latest rules.
Last updated: 15 October 2026
