Standard Medicare Part D Benefits: 2026 and 2027

In 2026, the Medicare Part D standard benefit will include a deductible, initial coverage, and catastrophic coverage phases. The deductible will be $615, and the out-of-pocket (OOP) spending limit will be $2,100. During the initial coverage phase, enrollees will pay 25% of costs, with the plan sponsor covering the remaining 75%. The catastrophic phase will feature no cost sharing for enrollees, with sponsors covering 60%, manufacturers 20% for applicable drugs, and CMS covering 20-40% for other drugs.

Here's a more detailed breakdown:

1. Deductible Phase:

Enrollees pay 100% of their prescription drug costs until they reach the $615 deductible.

2. Initial Coverage Phase:

After the deductible is met, enrollees pay 25% of the cost of their medications.
The plan sponsor typically covers 65% of the cost of applicable and selected drugs, and 75% of the cost of other covered drugs.
The manufacturer pays 10% of the cost of applicable drugs through the Manufacturer Discount Program.
CMS provides a 10% subsidy for selected drugs during a price applicability period.
This phase ends when the enrollee reaches the $2,100 out-of-pocket spending limit.

3. Catastrophic Coverage Phase:

Enrollees pay no cost-sharing for covered drugs.
The plan sponsor typically covers 60% of the costs.
The manufacturer provides a 20% discount for applicable drugs.
CMS provides a 20% reinsurance subsidy for applicable drugs and a 40% subsidy for other covered drugs.

Other Notable Changes for 2026:

Cost-sharing for adult vaccines:

Part D plans must continue to waive deductibles and cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).
Changes to the Part D risk adjustment model:

CMS will implement updates to the Part D risk adjustment models for CY 2026, including using more recent data years (2022 diagnoses and 2023 costs) and a multiple linear regression methodology to calculate separate Part D normalization factors.
Simplified determination method:

Non-RDS group health plans can use either the old or the revised simplified determination method for determining creditable coverage status.
Manufacturer Discount Program:

This program continues, with manufacturers covering a portion of the cost of applicable drugs.
Out-of-Pocket Spending Cap:

The $2,100 cap on out-of-pocket spending applies in 2026. For 2027, CMS has set the standard deductible at $700 and the out-of-pocket cap at $2,400.

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