New Medicare rule allows beneficiaries to split annual $2,100 out-of-pocket drug costs into monthly payments, but opt-in is required.
Medicare Part D enrollees can now split their $2,100 annual out-of-pocket drug cap into roughly $175 monthly payments, but must opt in before filling prescriptions. The program, effective in 2026, is interest-free but does not reduce total costs or cover non-formulary drugs.
The $2,100 cap, up from $2,000 in 2025, is automatic for all enrollees. However, the monthly payment option requires proactive enrollment, with January sign-ups spreading costs across the full year. Late enrollment after September offers minimal benefit due to fewer remaining months.
The change aims to ease financial strain for retirees, though awareness remains low. A 72-year-old Ohio retiree, for example, faced a $2,100 bill in January, consuming four months of her 2.8% Social Security raise in one payment.