Knowing what Medicare Part D will cost you makes it easier to plan for prescription drug expenses and select a plan that fits your needs and budget. Below is an in-depth breakdown of the different costs tied to Part D coverage.
Monthly Premium Payments
Each Part D plan has a monthly premium that differs based on the plan and your geographic area. For 2026, the national average Part D premium sits at roughly $55 per month, although individual plans can range from less than $10 to more than $100 monthly.
Income-Based Surcharge (IRMAA)
Beneficiaries with higher incomes are required to pay an extra charge on top of their standard plan premium, called the Income-Related Monthly Adjustment Amount (IRMAA). This additional cost is determined by your modified adjusted gross income from two years earlier.
| Individual Income | Couple Income | Monthly IRMAA (2026) | |---|---|---| | Up to $103,000 | Up to $206,000 | $0 | | $103,001 - $129,000 | $206,001 - $258,000 | $12.90 | | $129,001 - $161,000 | $258,001 - $322,000 | $33.30 | | $161,001 - $193,000 | $322,001 - $386,000 | $53.80 | | $193,001 - $499,999 | $386,001 - $749,999 | $74.20 | | $500,000 and above | $750,000 and above | $81.00 |
Yearly Deductible
The highest allowable Part D deductible for 2026 is $615. That said, many plans set a lower deductible or eliminate it altogether for specific drug tiers. After you satisfy the deductible, you transition into the initial coverage phase, where your plan starts sharing costs with you.
Copays and Coinsurance Amounts
While in the initial coverage phase, your out-of-pocket share depends on each medication's tier placement:
- Tier 1 (Preferred Generic): Usually a $0-$15 copay
- Tier 2 (Generic): Usually a $5-$20 copay
- Tier 3 (Preferred Brand): Usually a $30-$50 copay
- Tier 4 (Non-Preferred Brand): Usually 30%-40% coinsurance
- Tier 5 (Specialty): Usually 25%-33% coinsurance
Specific amounts differ from plan to plan, so be sure to review your plan's Evidence of Coverage document for precise cost-sharing information.
Annual Out-of-Pocket Cap
Thanks to the Inflation Reduction Act, the old coverage gap (donut hole) and catastrophic coverage phases have been replaced by a simplified structure. In 2026, after the deductible phase, you pay 25% coinsurance during the initial coverage phase. Once your true out-of-pocket spending reaches $2,100, you pay $0 for covered drugs for the remainder of the year. There is no longer a separate coverage gap or catastrophic threshold.
Penalty for Late Enrollment
If you fail to sign up for Part D when you are first eligible and go without other creditable drug coverage for 63 or more consecutive days, you will incur a permanent penalty. This penalty equals 1% of the national base beneficiary premium times the number of months you were without creditable coverage.
Strategies to Reduce Your Costs
- Opt for generic drugs whenever possible
- Fill prescriptions at preferred pharmacies within your plan's network
- Look into mail-order pharmacy services for maintenance medications
- Apply for Extra Help if your income is limited
- Review and compare plans each year to ensure you are getting the best deal for your prescriptions