How the 2026 cap works
Since 2025, every Medicare drug plan, stand-alone or part of a Medicare Advantage plan, stops charging you for covered drugs once your own out-of-pocket spending reaches the yearly cap. In 2026 the cap is $2,100. There is no longer a coverage gap or "donut hole": the year has a deductible phase (up to $615 in 2026, and some plans charge less or none), then you share costs with your plan until you reach the cap, then you pay nothing for covered drugs.
The cap counts what you pay at the pharmacy for drugs on your plan's drug list. It doesn't count your monthly premium, drugs your plan doesn't cover, or drugs bought outside your plan, for example at a pharmacy in Mexico. Covered insulin is limited to $35 for a month's supply, and those payments count toward the cap.
Spreading the cost: the Medicare Prescription Payment Plan
If an expensive prescription would have you pay most of the cap in January, you can join the Medicare Prescription Payment Plan through your drug plan. You then pay nothing at the pharmacy and get a monthly bill from your plan instead. The total is the same; the bills are spread over the rest of the year. The calculator's monthly figure assumes you join for the whole year; joining later in the year spreads the cost over fewer months.
The payment plan helps most when costs come early and are high. If you qualify for Extra Help, Extra Help usually helps more, because it lowers what you owe instead of spreading it out.
Extra Help for Arizonans
Extra Help is the federal program that lowers Part D costs for people with limited income and resources. With Extra Help you pay no deductible and, in 2026, no more than $5.10 for a generic or $12.65 for a brand-name drug (less for some people with full AHCCCS coverage). Extra Help can also pay all or part of your drug plan's premium.
- Automatic for many Arizonans. If you have full AHCCCS coverage or are in a Medicare Savings Program through AHCCCS (QMB, SLMB or QI-1), Medicare gives you Extra Help without a separate application. Read AHCCCS and Medicare.
- Others apply with Social Security. In 2026 the income limit is $23,940 a year for one person or $32,460 for a married couple, and resources must be under $16,590 or $33,100. Unlike Arizona's Medicare Savings Programs, Extra Help does count savings and investments.
- A chance to change plans. People with Extra Help can switch to a different drug plan once a month in some situations; see enrollment periods.
For how drug plans work in Arizona and what to compare, see Medicare Part D in Arizona. To look at plans offered where you live, you can see plans in your ZIP code.
Sources
- Medicare.gov — Costs for Medicare drug coverage
- Medicare.gov — Medicare Prescription Payment Plan
- Medicare.gov — Help with drug costs (Extra Help)
- Social Security — Extra Help with Medicare prescription drug costs
- CMS — CY 2026 resource and cost-sharing limits for the Low-Income Subsidy (PDF)
Frequently asked questions
What counts toward the $2,100 cap?
What you pay for covered Part D drugs: your deductible, copays and coinsurance. Your monthly plan premium doesn't count, and neither do drugs your plan doesn't cover. Payments by Extra Help and some other programs on your behalf also count toward the cap.
Is insulin part of the cap?
Yes. Covered insulin costs no more than $35 for a month's supply, and what you pay for it counts toward the yearly cap.
What happens after I reach the cap?
You pay nothing more for covered Part D drugs for the rest of the calendar year. The cap starts over on January 1.
How do I get Extra Help in Arizona?
If you have AHCCCS coverage or a Medicare Savings Program (QMB, SLMB or QI-1), Medicare enrolls you automatically. Otherwise you apply with Social Security online or by phone. Extra Help has income and resource limits, which the savings programs screener on this site checks.
