How The Inflation Reduction Act Affects Medicare Part D

The maximum you’ll need to pay for Medicare Part D prescription medicines in 2026 is $2,100*

Your total prescription costs can be paid in smaller monthly payments instead of all at once

Expanded benefits under the Medicare Extra Help Program

*This yearly maximum will increase each year.

Resources to Understand Medicare Changes

An Overview of Medicare Part D

Downloadable Guides

Guide to Medicare Part D

Understanding Medicare Part D Drug Benefit Design

LIS Brochure

Your guide to Medicare low-income subsidy for patients with limited income or resources

Understanding Your Healthcare Benefits

Learn how health insurance helps pay for treatment

Frequently Asked Questions

What is Medicare Part D?

Medicare Part D is also known as Medicare drug coverage and may help pay for prescription medications that you have been prescribed. This type of Medicare is optional and may be provided by an insurance company or other private company approved by Medicare.

How do I know if I qualify for Medicare Part D?

Medicare Part D is available to anyone with Medicare Part A and/or Part B. It may be included as a part of your Medicare Advantage Plan (Part C) or other Medicare health plan.

When and how do I enroll in Medicare Part D?

You can sign up for a Medicare Part D plan during the following specific periods:

Initial Enrollment Period: When you first become eligible for Medicare, or when you turn 65
Open Enrollment Period: From October 15th to December 7th every year
Special Enrollment Period: If certain life events occur, like if you move or lose other insurance coverage

Patients can apply by submitting an enrollment request as directed by their Part D sponsors:

In person (face-to-face interview), by mail, or by fax with a paper enrollment form
Electronic communications, including email
By phone as directed by the Part D plan
By Medicare Online Enrollment Center through Medicare.gov website and 1-800-MEDICARE (1-800-633-4277) Call Center

For more information call 1-800-MEDICARE (1-800-633-4277) or visit Medicare.gov.

If you delay enrollment and go without other creditable prescription drug coverage for 63 days or more after your Initial Enrollment Period ends, you may have to pay a late enrollment penalty which is added to your monthly premium. For more information on Creditable Coverage and Late Enrollment Penalty, please see here.

What is the Medicare Prescription Payment Plan?

It is a program that allows you to spread the cost of your medicine over the rest of the plan year. This option does not lower your out-of-pocket costs, but it allows you to pay what you owe in monthly installments over the course of the plan year. This program may be especially helpful if you take high-cost drugs earlier in the year, so you don’t need to pay for the medicine all at once.

Who can sign up for the Medicare Prescription Payment Plan?

This program is available to anyone enrolled in a Medicare Part D plan. This program may be especially helpful if you take high-cost drugs earlier in the year.

When and how can I sign up for the Medicare Prescription Payment Plan?

You can sign up during Open Enrollment from October 15th to December 7th or at any time during the year.

Patients can apply as directed by their Part D plan sponsors:

Through an election request form during enrollment
By mail with a paper election form
By phone as directed by the Part D plan
Online as directed by the Part D plan

Patients can call 1-800-MEDICARE (1-800-633-4277) if they need help contacting their Part D plan.

If I switch Part D plans during the year, can I still sign up for the Medicare Prescription Payment Plan with the new plan?

Yes, if you switch Medicare Part D plans during the year, you can sign up even if you were a part of the Medicare Prescription Payment Plan with your old plan. Your enrollment won’t carry over, so you’ll need to sign up with your new plan.

Do I qualify for the Low-Income Subsidy, also known as the Extra Help program?

If you have or are eligible for a Medicare Part D prescription drug plan, live in the US, have a yearly income that is below 150% of the Federal Poverty Level, and meet certain limited resource requirements (savings, assets, etc), you may qualify for the Low-Income Subsidy. To find out if you qualify, you can visit  www.ssa.gov/medicare/part-d-extra-help and start an application.

Key Terms

Catastrophic Phase

The final stage of Medicare Part D where you pay no out-of-pocket costs for covered drugs for the remainder of the calendar year after reaching a specific cost-sharing limit. For 2026 the cost-sharing limit is $2,100.

Coinsurance

A type of cost sharing after you meet your annual deductible in some health plans. You pay a certain percentage of the cost of a covered service, plus any deductible amount not already paid, then your plan pays the remaining amount.

Copay

A type of cost sharing in some health plans. You pay a fixed amount ($20, for example) for a covered healthcare service or drug after you’ve paid your deductible. Copays can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.

Covered Part D Drug

A prescribed oral medication that Medicare Part D helps pay for. You may obtain the oral medication from a local pharmacy, mail order pharmacy, or a specialty pharmacy.

Deductible

The deductible is the amount you pay for medical services like doctor’s visits, medications, or tests each year before your health plan starts to pay its part.

Extra Help, also known  as Low-Income Subsidy

A Medicare program that may help eligible people with Medicare pay for prescription drugs and can lower the costs of Medicare prescription drug coverage.

Federal Poverty Level

A measure of yearly income that is updated annually by the government. It is used to determine eligibility for certain programs and benefits, including Medicare Extra Help.

Inflation Reduction Act (IRA)

A new law that aims to help lower the cost of prescription drugs for people on Medicare.

Initial Coverage Phase

The second phase of Medicare Part D that begins once you reach your deductible. You'll pay a copay or coinsurance, until you meet the annual out-of-pocket maximum.

Medicare

Government health insurance for people 65 or older, and some people under 65 with certain disabilities or conditions.

Medicare Advantage Prescription Drug Plan

A type of Medicare Advantage plan that also includes Medicare Part D coverage for prescribed medications.

Medicare Part C

Also known as Medicare Advantage. An optional, private plan that combines hospital, medical, and prescription drug coverage.

Medicare Part D

Helps you pay for your prescriptions. It is optional and available to everyone on Medicare with an additional monthly payment.

Open Enrollment

The time period from October 15th to December 7th when you can choose your Medicare plan(s) for the next year.

Out-of-Pocket Costs

The most you will pay for covered medicines in a plan year before you are covered at 100%.

Part D Plan Sponsor

Private insurance companies that provide drug benefits to Medicare beneficiaries.

Premium

The amount you pay for health insurance every month, including for Medicare Part D, under one plan premium.

Prescription Drugs

Medicines your doctor prescribes that you pick up at the pharmacy or get through the mail and take at home.

Prescription Drug Plan (PDP)

An insurance plan that helps cover the cost of medicines received from the pharmacy.

Additional Information

More about Medicare Part D

To learn more about Medicare, download the Medicare & You Guide from Medicare.gov. It has important information about all parts of Medicare, including Part D.

Visit Medicare.gov >

More about the Medicare Prescription Plan

To sign up, you can fill out an election request form through Medicare by phone, by mail with a paper election form, or online at CMS.gov.

You can also call 1-800-MEDICARE (1-800-633-4227) to contact your Part D Plan.

Visit CMS.gov >

More about the Low-Income Subsidy Plan, or Extra Help

To apply, call 800-772-1213 (TTY 1-800-325-0778) to request a paper application, or set up an appointment at your local Social Security Administration office.

Visit SSA.gov >