What Does Medicare Part D Cover? Costs, Tiers, and Exclusions

Medicare Part D covers most outpatient prescription drugs you fill at a pharmacy, delivered through private plans that each publish their own list of covered medications. Every plan must meet federal minimums across major drug categories, but the specific drugs, tiers, and costs differ from plan to plan. Federal law also excludes several categories outright, and some medications you might expect under Part D are actually paid by Part B. In 2026, no beneficiary pays more than $2,100 out of pocket for covered Part D drugs in a calendar year.

The Baseline Every Plan Must Cover

The Centers for Medicare and Medicaid Services sets minimum formulary standards that every Part D plan must meet across therapeutic categories, so beneficiaries have access to medications for a wide range of conditions no matter which plan they pick.¹

On top of those minimums, CMS designates six “protected classes” where plans must cover substantially all available drugs:

Antineoplastics (cancer drugs)
Antiretrovirals (HIV/AIDS drugs)
Antidepressants
Antipsychotics
Anticonvulsants (epilepsy and seizure drugs)
Immunosuppressants used to prevent organ transplant rejection

For drugs in these classes, plans cannot use the usual tools to steer patients toward cheaper alternatives, which protects people who rely on a specific medication when plans update their formularies each year.²

Benzodiazepines have been covered since January 2013 and all barbiturates for all medically accepted uses since January 2014, after the Affordable Care Act removed their original exclusion.³

Drugs Part D Will Not Cover

Federal law bars Part D from paying for certain categories of drugs regardless of plan. The main statutory exclusions are:

Weight-loss and weight-gain drugs, unless prescribed for physical wasting caused by AIDS, cancer, or another disease⁴
Fertility drugs
Cosmetic and hair-growth drugs (though treatments for psoriasis, acne, rosacea, or vitiligo are not considered cosmetic and may be covered)
Cough and cold remedies used only for symptomatic relief
Erectile dysfunction drugs, unless FDA-approved for another covered condition such as pulmonary hypertension
Prescription vitamins and minerals, with exceptions for prenatal vitamins and fluoride preparations (vitamin D analogs like calcitriol are not classified as vitamins and remain covered)⁵
Over-the-counter drugs, with limited exceptions including insulin and insulin injection supplies
DESI drugs, which the FDA has rated as less than effective⁴

If a drug in an excluded category is also FDA-approved for a different, non-excluded condition, Part D may cover it for that approved use. For non-cancer medications, uses not approved by the FDA are generally not covered unless listed in a Medicare-approved drug compendium.⁴

Weight-Loss Drugs and the 2026 GLP-1 Bridge

The weight-loss exclusion is why Part D does not generally pay for GLP-1 drugs like Wegovy or Zepbound when prescribed solely for obesity. Congress has not changed the law, but CMS is running a short-term demonstration called the Medicare GLP-1 Bridge, which launched July 1, 2026, and runs through the end of the year. It covers Wegovy and Zepbound for weight reduction at a $50 monthly copayment and operates outside the normal Part D benefit.⁶ A broader program known as the BALANCE Model had been planned to start in January 2027 but was delayed indefinitely in a May 2026 CMS announcement.⁷ A GLP-1 prescribed for diabetes rather than weight loss is a different question and is not subject to this exclusion.

Drugs Covered by Part B, Not Part D

Some prescriptions you might assume are Part D drugs actually fall under Medicare Part B, and the distinction changes your cost-sharing. Part B generally pays for:

Flu, pneumococcal, COVID-19, and hepatitis B vaccines
Drugs that cannot be self-administered, such as infusions given at a doctor’s office
Nebulizer medications used at home
Drugs administered through implantable infusion pumps
Certain oral cancer drugs that substitute for an IV equivalent⁸

Part D picks up self-administered injectables purchased at a pharmacy, inhalers that are not nebulizer-based, and the full range of oral prescription medications. When the same drug could land in either program, the deciding factor is usually how and where it is administered.⁸

Vaccines and Insulin

Part D covers all commercially available preventive vaccines that Part B does not, including shingles, RSV, Tdap, meningococcal, MMR, typhoid, and travel-related immunizations.⁹ Since January 2023, the Inflation Reduction Act has eliminated all out-of-pocket costs for adult vaccines recommended by the Advisory Committee on Immunization Practices when covered under Part D. You pay nothing, even at an out-of-network provider.¹⁰

All Part D plans must cover insulin, and since January 1, 2023, the law caps cost-sharing at no more than $35 per month’s supply for each covered insulin product. The deductible does not apply. A three-month supply cannot exceed $35 per month of supply, generally totaling no more than $105.¹¹¹²¹³

What You Pay in 2026

The Part D benefit has three coverage phases in 2026. The old four-phase structure with a “donut hole” coverage gap was eliminated in 2025.

Deductible Phase

If your plan charges a deductible, you pay the full cost of covered drugs until you meet it. No plan may set a deductible higher than $615 in 2026, and some plans have no deductible at all. Insulin and certain other drugs may be exempt from the deductible.¹⁴

Initial Coverage Phase

After the deductible, you pay 25% of drug costs through copays or coinsurance that depend on the drug’s tier. The plan picks up 65% and the manufacturer 10% under the Inflation Reduction Act’s Manufacturer Discount Program. This phase ends when your out-of-pocket spending reaches $2,100.¹⁵

Catastrophic Coverage Phase

Once your out-of-pocket spending hits $2,100, you pay $0 for covered Part D drugs for the rest of the calendar year. The plan pays 60%, the manufacturer pays 20%, and Medicare pays 20%.¹⁵

How Formularies and Tiers Shape Your Cost

Plans sort covered drugs into tiers, and the tier a drug sits in generally decides what you pay for it. A typical 2026 formulary runs from preferred generics, through generics and preferred brands, to non-preferred drugs, with a specialty tier at the top for drugs costing more than $950 per month.

Most plans charge low flat copays for generics, often between $0 and $10. Preferred brands typically carry coinsurance rather than a copay, with median rates around 25% for standalone drug plans and 21% for Medicare Advantage drug plans. Non-preferred drugs run roughly 34% to 38%. Specialty-tier drugs carry median coinsurance of 25% to 28%.¹⁶

Plans have been shifting more tiers from flat copays to coinsurance. The average share of drugs placed on coinsurance tiers in 2026 is 63% for Medicare Advantage drug plans and 79% for standalone plans. Coinsurance ties what you pay to the full price of the drug, while a flat copay does not.¹⁶

When a Covered Drug Still Has Strings Attached

Even when a drug is on your plan’s formulary, the plan can impose conditions before paying. The three common tools are:

Prior authorization, where the plan must approve coverage before the drug is dispensed and the prescriber usually has to document medical necessity
Step therapy, where you must try a less expensive drug first (such as a generic) before the plan will cover the one requested
Quantity limits, where the plan restricts how much of a drug it will cover in a given period, such as 30 tablets per month¹⁷

If you need a drug that is not on the formulary or is subject to one of these restrictions, you can request a coverage exception. The process requires a supporting statement from your prescriber explaining why the drug is medically necessary and why alternatives would be less effective or harmful. Plans must respond to standard exception requests within 72 hours and to expedited requests within 24 hours. A denial can be appealed.¹⁸

When your coverage first begins, you can usually get a one-time 30-day “transition fill” of a drug that is not on the plan’s formulary or that requires prior authorization. That buys time to work with your doctor on an alternative or an exception.¹⁷

Spreading Costs Across the Year

Starting in 2025, every Part D plan must offer the Medicare Prescription Payment Plan, which lets you pay your out-of-pocket drug costs in monthly installments through the plan instead of all at once at the pharmacy. The program charges no interest. You receive a monthly bill from your plan rather than paying the pharmacy counter price.¹⁹

The plan does not reduce your total drug costs; it only changes the timing. Anyone in a Part D plan or a Medicare Advantage plan with drug coverage can sign up, but enrollment runs through the plan, not the pharmacy. Monthly amounts can shift if new prescriptions are added during the year. Pharmacies must tell you when your out-of-pocket costs reach $600, which is often when the installment option becomes most useful. Falling at least two months behind on payments can get you removed from the installment program, but you remain in your Part D plan and can rejoin after paying the balance.²⁰

Negotiated Prices on 10 Drugs in 2026

For the first time, CMS has negotiated prices on 10 high-cost Part D drugs under the Inflation Reduction Act, and those “Maximum Fair Prices” took effect January 1, 2026. The drugs are Eliquis, Xarelto, Jardiance, Farxiga, Januvia, Entresto, Enbrel, Stelara, Imbruvica, and the Fiasp/NovoLog insulin products. Every Part D plan must include these drugs on its formulary at the negotiated prices.²¹

CMS estimates that applying the negotiated prices to 2023 spending would have cut net Medicare spending on the 10 drugs by about 22%, roughly $6 billion, and projects beneficiaries will save an estimated $1.5 billion in 2026.²² A second round covering 15 Part D drugs, including Ozempic and Wegovy, will set prices taking effect in January 2027, and a third round announced in early 2026 extends negotiation for the first time to physician-administered drugs under Part B, with prices set for 2028.²¹

Help Paying Part D Costs

The Extra Help program, also called the Low-Income Subsidy, assists Medicare beneficiaries with limited income and resources. It covers plan premiums, eliminates the deductible, and sharply reduces copays. In 2026, qualifying beneficiaries pay no more than $5.10 for generics and $12.65 for brand-name drugs, with $0 copays once out-of-pocket costs reach $2,100. The late enrollment penalty is also waived.²³

To qualify in 2026, an individual must have annual income at or below $23,940 and resources at or below $18,090. For a married couple, the limits are $32,460 in income and $36,100 in resources. People who receive Medicaid, Supplemental Security Income, or are enrolled in a Medicare Savings Program qualify automatically. Others can apply through the Social Security Administration at any time.²⁴

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