Short answer: Starting in 2025, Medicare Part D caps what you pay out of pocket for covered prescriptions each year. The cap is $2,000 in 2025 and rises with inflation to $2,100 in 2026. After you hit it, covered drugs cost you nothing for the rest of the year.
The Inflation Reduction Act created an annual out-of-pocket maximum for covered drugs under Medicare Part D. Once your out-of-pocket spending on covered prescriptions (deductible, copays, and coinsurance, but not premiums) reaches the cap, your plan pays 100% of covered drug costs for the rest of the calendar year. This replaced the old coverage gap, often called the donut hole.
The cap was $2,000 in 2025, its first year, and is indexed to inflation. For 2026 it rises to $2,100. The limit applies whether your Part D coverage is a stand-alone drug plan or part of a Medicare Advantage plan.
Medicare also offers a Medicare Prescription Payment Plan that lets you spread your out-of-pocket drug costs into monthly payments across the year instead of paying large amounts at the pharmacy counter. If your drug costs are high, ask your plan how the cap and the payment plan apply to you.