New 2026 Prescription Payment Plans for Medicare Advantage & Part D
Medicare Advantage and stand‑alone Part D plans now offer the Medicare Prescription Payment Plan (MPPP)—a helpful, voluntary option that began in 2025.
September 13, 2025
Designed under the Inflation Reduction Act, the MPPP allows eligible beneficiaries to spread annual out-of-pocket prescription drug costs over the calendar year, rather than paying at the pharmacy (CMS “Medicare Prescription Payment Plan” and final rule guidance)
Why the MPPP Was Created
The MPPP was introduced to ease the financial burden faced by people with high prescription drug expenses early in the year. By opting in, members avoid large, lump-sum out-of-pocket costs. Instead, they receive a monthly bill from their plan based on their expenses and remaining months in the year—never exceeding the annual Part D cap, which is projected to rise to $2,100 in 2026.
Impact of Rising Drug Caps for 2026
Starting in 2025, Part D includes a $2,000 cap on annual out-of-pocket costs for covered medications. In 2026, this cap increases to approximately $2,100 to reflect inflation and ongoing negotiations with drug manufacturers (CMS final rule)
While this cap limits what you’ll pay annually, it does not reduce drug prices—it ensures no one pays more than the set limit.
Who Can Benefit from MPPP?
Beneficiaries with high early-year prescription expenses.
Those who find lump-sum pharmacy payments unmanageable.
Anyone wanting a predictable monthly schedule for drug costs.
You can opt in through your Medicare Advantage or Part D plan, at any time during the year. Starting in 2026, the plan will automatically re enroll anyone who opted in during 2025—though you'll need to opt in again if you change plans mid-year.
Final Thoughts
By 2026, rising drug caps and limits make it more important than ever to budget your medication costs smartly. The Medicare Prescription Payment Plan provides a helpful structure to avoid surprise balances and smooth out cash flow while respecting annual limits.
At Stellar Health Benefits LLC, we help individuals determine whether MPPP and Medicare Advantage plans are right for their needs. Schedule a consultation today to explore your options.
Centers for Medicare & Medicaid Services. Medicare Prescription Payment Plan. CMS.gov.
Centers for Medicare & Medicaid Services. “Contract Year 2026 Medicare Advantage and Part D Rule.” CMS Final Rule Guidance, 2025.
“Fact Sheet: Medicare Prescription Payment Plan Part One & Part Two Guidance.” CMS.gov, Feb.–July 2024.
“Six Medicare Changes Coming in 2026.” Kiplinger, 2025.