Medicare Drug Costs
Millions of Americans struggle to afford their out-of-pocket health care costs and premiums.
What Changed and What It Means for You
The Inflation Reduction Act of 2022 is lowering what people with Medicare pay for prescriptions. Several changes are already in effect, and more arrive in 2027 and 2028.
• Part D has a yearly out-of-pocket cap. After you reach it, covered drugs cost nothing for the rest of the year.
• Insulin costs no more than $35 a month.
• Recommended adult vaccines, such as shingles, are free under Part D.
• Medicare now negotiates prices for some of the costliest drugs.
• More people qualify for full help with Part D costs.
Key numbers
| 2026 | 2027 | |
|---|---|---|
| Part D out-of-pocket cap | $2,100 | $2,400 |
| Standard Part D deductible | $615 | $700 |
| Monthly insulin limit | $35 | $35 |
| Number of drugs with negotiated prices | 10 | 15 |
These figures change most years, so check Medicare.gov for the current ones.
The Part D cap
Before 2025, Part D had no hard limit on what you could pay out of pocket in a year. The 5% coinsurance in catastrophic coverage ended in 2024, and the cap began in 2025 at $2,000. The old "donut hole" coverage gap is gone.
The cap counts deductibles, copays and coinsurance for covered drugs. It does not count plan premiums, drugs your plan doesn't cover, or Part B drugs. It applies to stand-alone drug plans and to Medicare Advantage plans with drug coverage.
If a large bill at once is a problem, the Medicare Prescription Payment Plan spreads your costs across the year in monthly payments. Participants are now renewed automatically.
The law limits increases in the base Part D premium to 6% a year through 2029. Some plans may still raise their own premiums or add rules, such as asking you to try cheaper drugs first.
Insulin and vaccines
Insulin. Each covered insulin product costs no more than $35 a month, with no deductible. This has applied in Part D since January 1, 2023, and to insulin used in an external pump under Part B since July 1, 2023. Plans don't have to cover every insulin product, so check your plan's drug list.
Vaccines. Part D plans cannot charge a deductible or copay for adult vaccines recommended by the CDC's advisory committee (ACIP), including shingles, Tdap and RSV. Flu, COVID-19 and pneumococcal vaccines are covered under Part B with no cost sharing.
You can still be billed if the shot is given out of network, or billed to your medical benefit instead of your drug benefit. Use an in-network pharmacy, and if you are charged, ask your plan to reprocess the claim. Call 1-800-MEDICARE if the plan won't.
Negotiated drug prices
Each year Medicare selects some of its highest-spending drugs and negotiates their prices with the manufacturers. Prices take effect about two years after selection.
• 2026: 10 Part D drugs. Their negotiated prices are 38% to 79% below list prices. CMS estimated that people with Part D would save about $1.5 billion in out-of-pocket costs.
• 2027: 15 more Part D drugs, including Ozempic and Wegovy.
• 2028: 15 more drugs selected in January 2026, including the first Part B drugs, such as Botox. Negotiations are under way now.
• 2029 and later: up to 20 drugs a year.
Drugs for rare diseases are partly shielded from negotiation, and a 2025 law widened that protection. Drugmakers challenged the program in court and have largely lost.
What you save depends on which drugs you take and how your plan sets your cost sharing.
Medicare GLP-1 Bridge Program
Standard Medicare Part D plans do not cover weight-loss drugs.
However, the temporary Medicare GLP-1 Bridge Program (July 1, 2026 – December 31, 2027) offers a workaround for eligible beneficiaries.
• Cost: A flat $50 monthly copay
• Cap Exception: This $50 copay does not count toward your annual Part D out-of-pocket cap.
• Eligibility: You must not have Type 2 diabetes, sleep apnea, or fatty liver disease.
Covered under Bridge ($50 Copay) Wegovy, Zepbound & Foundayo
Excluded (Covered by Standard Part D) Ozempic & Mounjaro
Who qualifies?
To use the program, you must have a regular Medicare Part D drug plan.
Your doctor must submit a special approval form (called a prior authorization) proving that you meet one of these medical requirements:
• A Body Mass Index (BMI) of 35 or higher
• A BMI of 30 or higher if you also have high blood pressure, heart failure, or kidney disease.
• A BMI of 27 or higher if you also have pre-diabetes, or have had a past heart attack or stroke.
Low-income help
Since 2024, people with incomes up to 150% of the federal poverty level and limited resources can qualify for full Part D Low-Income Subsidy benefits. You can apply through Social Security.
What to expect and what you can do
The law is still being phased in, and Congress has already narrowed it once. Lower negotiated prices reduce what Medicare pays, but what you pay still depends on your plan, your drugs and your pharmacy.
• Check your plan's drug list every year, since plans can change coverage and costs each January.
• Use Open Enrollment, October 15 to December 7, to compare plans for the coming year.
• Ask your plan about the Medicare Prescription Payment Plan if a large bill is likely.
The rules keep changing, so check CMS.gov and Medicare.gov before making coverage decisions.
