The Medicare Prescription Cap

Health Line

09-07-2025

Prescription cap for 2025
Prescription cap changes
Other spending caps
In Medicare, two types of plans cover prescription drugs: stand-alone Medicare Part D plans or Medicare Advantage prescription drug (MAPD) plans.
Private insurers manage both types of plans, which means the plans have different deductibles, premiums, and coinsurances.
But due to the Inflation Reduction Act of 2022, once coverage kicks in, you don't need to pay more than a fixed amount out of pocket per year.
What is the Medicare prescription cap for 2025?
In 2025, you don't need to pay more than $2,000 per year out of pocket once your drug coverage kicks in. Once you reach this amount, you enter catastrophic coverage.
This means your plan must fully cover any further costs. You can also use any contributions you make toward Extra Help toward this limit.
This annual cap applies to stand-alone Part D and Medicare Advantage (Part C) plans offering drug coverage, also known as MAPD plans.
Does the Medicare prescription cap change annually?
As of 2025, the Medicare prescription cap is significantly lower than in previous years. Before the new law took effect in 2024, you had to spend $8,000 before reaching catastrophic coverage.
You were in the donut hole once you reached $5,030 until you reached $8,000. That said, the new annual cap eliminated this donut hole. However, it isn't static and changes each year. It may rise to $2,100 in 2026.
What other spending caps does Medicare have?
Medicare spending caps are generally called maximum out-of-pocket (MOOP) limits. While MOOP limits don't apply to Original Medicare (parts A and B), they do apply to Part C and D plans in other ways besides your overall, annual spending on prescription drugs.
For example, under the Inflation Reduction Act, any Medicare drug plan enrollees who need insulin may never pay more than $35 per month.
Your plan may have two MOOP limits: one for in-network services and another for out-of-network services. In 2025, you may not spend more than $9,350 for in-network services and no more than $14,000 for out-of-network services.