Paying for prescriptions with Medicare: the yearly cap, the payment plan and $35 insulin

The yearly cap

After any deductible, you pay copays or coinsurance until your spending reaches the cap. Then you pay nothing for covered drugs for the rest of the calendar year. The cap applies in every drug plan and every Medicare Advantage plan with drug coverage. The old "donut hole" is gone.

Counts toward the cap

Your deductible, copays and coinsurance for drugs your plan covers, and payments made for you by Extra Help, a state drug program, an AIDS drug program or the Indian Health Service.

Doesn't count

Your monthly premium, drugs your plan doesn't cover, and drugs you buy with a discount card instead of your plan.

The payment plan

The Medicare Prescription Payment Plan lets you pay $0 at the pharmacy for covered drugs and get a monthly bill from your plan instead. Every drug plan, and every Medicare Advantage plan with drug coverage, has to offer it.

Costs nothing

No interest and no fees, even if you pay late. Your premium is billed separately.

Doesn't save money

You pay the same total; it's spread across the months left in the year.

Helps most

If you have high drug costs early in the year, such as one expensive drug. Signing up early spreads costs over more months.

Helps least

If your costs are low or steady, if you sign up late in the year, or if you get Extra Help.

1. 1

   Sign up through your plan

   Call the plan, or use its website or form, before the year starts or at any time during it. Requests during the year are processed within 24 hours.
2. 2

   Pay the monthly bill

   If you miss a payment, the plan reminds you and gives you at least 2 months to pay before removing you. You still owe the balance, with no interest, and you keep your drug coverage. Pay your premium first.
3. 3

   It renews automatically

   If you stay in the same plan next year. Switching plans ends it: sign up again with the new plan.

Insulin

You pay no more than $35 for a month's supply of each covered insulin, with no deductible. That applies under Part D (since 2023) and to insulin used with a traditional pump covered by Part B. A 3-month supply costs no more than $35 for each month's supply (up to $105).

• The cap is per insulin, per month, not $35 for all of them together.
• The $35 cap doesn't apply to syringes, pen needles, test strips or diabetes drugs that aren't insulin; your usual costs apply.
• Insulin for pens and disposable patch pumps is covered by Part D, not Part B.

Vaccines

Part D

Adult vaccines recommended by the CDC's advisory committee, such as shingles, Tdap and RSV, cost $0, with no deductible.

Part B

Flu, pneumococcal, COVID-19 and hepatitis B vaccines cost $0 when the provider accepts assignment. Hepatitis B is covered if you never finished the series, don't know your history, or are at medium or high risk.

Negotiated drug prices

Medicare now negotiates prices for some high-cost drugs. Prices for the first 10 took effect January 1, 2026. Fifteen more join on January 1, 2027, including Ozempic, Rybelsus and Wegovy, Trelegy Ellipta, Xtandi, Ibrance and Linzess. Four of the first 10 (Stelara, Entresto, Xarelto and NovoLog/Fiasp) leave the program on January 1, 2027, because generic or biosimilar versions are now sold. Their negotiated prices end then, so if you take one, check what your plan will charge in 2027. NovoLog and Fiasp stay under the $35 insulin cap.

The negotiated price is what's paid for the drug, not your copay. If you pay coinsurance, a lower price can lower your share; a flat copay may not change. Ask your plan what you'll pay.

Coupons and discount cards

Manufacturer coupons

Can't be used for drugs Part D pays for. Drug makers' patient assistance programs are different: Medicare lists them at go.Medicare.gov/pap.

Discount cards and cash prices

You can pay a cash or discount-card price instead of using your plan, but it doesn't count toward your deductible or yearly cap. This includes cash offers from drug makers. Compare before you choose.

If you have a low income

Extra Help pays most drug costs for people with limited income and savings: in 2026, no more than $5.10 for a generic and $12.65 for a brand-name drug ($5.80 and $14.40 in 2027), and no late enrollment penalty. In 2026 the limits are income under $23,940 ($32,460 for a married couple) and savings under $18,090 ($36,100). Some people qualify with more income, for example if they still work or live in Alaska or Hawaii. How to apply.

Drug costs vary a lot by plan. A licensed agent or your state's free SHIP counselor can compare plans using your own drug list. How to compare drug plans.

Common questions

Keep reading

• How a good agent compares Medicare drug plans (and how to check their work)The premium is the smallest part of a drug plan's cost. What an agent should check for each of your prescriptions, the 2025 changes that cap your costs, and how to double-check the comparison.
• Extra Help and Medicare Savings Programs: who qualifies and how to applyTwo programs that cut Medicare costs for people with limited income: Extra Help for drug costs and state Medicare Savings Programs for premiums. The 2026 limits, what they pay, and how to apply for both at once.
• Medicare Open Enrollment checklist: what to check before December 7A step-by-step checklist for the October 15 to December 7, 2026 Open Enrollment Period: what to read in your plan's letter, what's changing for 2027, what you can switch, and what happens if you do nothing.