Medicare Guide

Part D Coverage Stages and Out-of-Pocket Limits

Part D has changed enough that old phrases like the donut hole can confuse people more than help them. A better starting point is to understand deductibles, covered drug costs, plan formularies, pharmacy pricing, and the 2026 out-of-pocket threshold.

Reviewed by John Schenk, Licensed Insurance Agent since 2008 · Published May 15, 2026 · Last updated August 14, 2026

Quick answer

In 2026, covered Part D out-of-pocket drug spending reaches catastrophic coverage at $2,100.

That does not mean every medication or every pharmacy cost automatically counts the same way. Part D costs still depend on whether the drug is covered, the plan's formulary, the pharmacy, deductible rules, tiers, and whether any exception or restriction applies.

Key takeaways

Part D costs vary by plan, pharmacy, drug tier, formulary, deductible, and medication list.
The 2026 standard maximum Part D deductible is $615.
Covered Part D out-of-pocket spending reaches catastrophic coverage at $2,100 in 2026.
The old donut-hole language is less useful than understanding covered drug spending and plan stages.
A Part D review should use the exact medications, dosages, and preferred pharmacies.

2026 cost snapshot

The numbers people usually ask about first

Medicare costs can change each year. These figures give you the starting point before we compare the plan details that depend on your county, prescriptions, doctors, and coverage path.

2026 max deductible

$615Plans can have a deductible up to this amount, though plan designs vary.

Covered drug threshold

$2,100Covered Part D out-of-pocket spending reaches catastrophic coverage at this amount in 2026.

Part D premium

VariesPremiums can vary by plan and income; higher-income beneficiaries may pay more.

Pharmacy costs

Plan-specificPreferred pharmacy, mail order, tiers, and formulary rules can change the real cost.

Start with whether the drug is covered

The first Part D question is whether the medication is on the plan's formulary. If a drug is not covered, the cost may not work the way someone expects. Prior authorization, step therapy, quantity limits, and exceptions can also affect access and cost.

The deductible stage

Some Part D plans have a deductible. In 2026, the standard maximum Part D deductible is $615. Depending on the plan, some drugs may be subject to the deductible while others may have copays before the deductible is fully met.

After the deductible

After any applicable deductible, people usually pay plan-specific copays or coinsurance based on the drug tier, pharmacy, and plan rules. This is where two people on the same Part D plan can have very different yearly costs because their medications are different.

The 2026 out-of-pocket threshold

For 2026, covered Part D out-of-pocket spending reaches catastrophic coverage at $2,100. This is a major planning number, but it should be understood carefully: the drug has to be covered under Part D, and the plan's rules still matter.

Why the donut hole is not the best way to explain modern Part D

Many people still use the term donut hole because it was part of older Part D conversations. But current Part D design is better explained through deductible, covered drug costs, out-of-pocket threshold, and catastrophic coverage. That language is clearer for today's decisions.

Why annual Part D reviews matter

Drug plans can change premiums, deductibles, formularies, tiers, pharmacy contracts, restrictions, and covered-drug costs each year. A plan that was affordable last year may be expensive next year if a medication or pharmacy changes.

Go deeper

Related Medicare guides

Use this page as your Medicare starting point, then jump into the specific topic that matches your situation.

Common questions

Questions people usually ask next

These answers are a starting point. Medicare details can change based on timing, other coverage, and where you live.

Is the Part D donut hole gone?

The old donut-hole framing is not the clearest way to explain current Part D. In 2026, it is more useful to focus on deductible rules, covered drug spending, the $2,100 out-of-pocket threshold, and catastrophic coverage.

Do all Part D drugs count toward the out-of-pocket threshold?

The threshold applies to covered Part D drugs. If a medication is not covered or is handled through an exception or non-Part D pathway, the details should be checked carefully.

Should I review my Part D plan every year?

Yes. Medications, formularies, pharmacies, premiums, deductibles, and plan rules can change every year.

Official references

Sources checked for this guide

These guides are written in plain English, but the 2026 cost figures and coverage rules should stay tied to official Medicare and CMS source material.

Medicare.gov: Part D costs Medicare.gov: 2026 Medicare costs Medicare.gov: Avoid late enrollment penalties

About the reviewer

John Schenk · Licensed Insurance Agent since 2008 · Nevada license #603197

John Schenk is a trainer and Agent Relationship Manager for The Medicare Store. He has been a licensed insurance agent since 2008 (Nevada license #603197). He trains and supports agents who sit with Medicare Store clients every day.

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