Managing Medicare Part D Prescription Costs: Programs and Strategies for 2026

Medicare Part D covers prescription medications including brands, generics, vaccines, and medical supplies but enrollees can still face high out-of-pocket costs despite recent reforms such as the $2,000 annual out-of-pocket cap starting in 2025, increasing to $2,100 in 2026. To manage these costs, enrollees can explore several state and federal programs. Local Area Agencies on Aging provide Medicare counseling and can assist seniors in selecting Medicare plans that fit their needs. Various states run specific pharmaceutical assistance programs like Pennsylvania’s PACE and PACENET, which reduce prescription costs for eligible residents. The federally funded Medicare Extra Help (Low-Income Subsidy) program lowers premiums, deductibles, and copays for qualifying Part D enrollees with income and asset limits. In 2026, copays for Extra Help participants will be capped at $12.65 for brand-name and $5.10 for generic drugs, with further reductions available for low-income individuals enrolled in both Medicare and Medicaid. Enrollment in Extra Help can be automatic based on eligibility or completed through an application with the Social Security Administration. Patient Assistance Programs (PAPs) run by pharmaceutical companies and nonprofits offer free or discounted brand-name medications for uninsured or low-income patients, with some accepting Medicare recipients. The Novo Nordisk Patient Assistance Program is an example that provides select diabetes medications but will restrict access to certain drugs like Ozempic for Medicare beneficiaries starting in 2026. Using FDA-approved generic medications is a cost-effective alternative, as generics typically cost 80-85% less than brand-name equivalents and are usually placed in lower formulary tiers with lower copays under Part D plans. The Medicare Prescription Payment Plan, introduced in 2025, allows enrollees to spread out medication costs monthly instead of lump sum payments at pharmacies, aiding budget management especially for those on high-cost drugs. This plan is available to all Medicare Part D and Medicare Advantage enrollees with drug coverage. Medicare open enrollment (Oct. 15 to Dec. 7 annually) is crucial for beneficiaries to reassess and optimize their Part D coverage to ensure the best pricing and coverage for their prescriptions. Medication costs can also vary by pharmacy; using preferred pharmacies within a plan’s network can reduce copays. Choosing the most affordable Part D plan involves comparing formularies, copays, deductibles, and pharmacy networks based on one’s specific medications. The Medicare Plan Finder tool facilitates this evaluation. In summary, Medicare Part D enrollees have multiple strategies and programs to manage prescription drug costs including state assistance programs, federal subsidies, patient assistance programs, generic drug substitution, payment plans, and annual plan reviews. These options collectively help control out-of-pocket expenses and improve medication affordability for seniors and other Medicare beneficiaries.