Medicare Part D Coinsurance to Be Based on Actual Drug Costs Starting 2026, Potentially Lowering Out-of-Pocket Expenses

The "Reducing Drug Prices for Seniors Act" aims to tackle the high cost of prescription drugs for seniors. Here's the core of it: Starting January 1, 2026, Medicare Part D coinsurance—that's the percentage you pay for your meds after your deductible but before you hit your out-of-pocket limit—will be calculated based on what the pharmacy actually paid for the drug, not some inflated "wholesale" price.

Prescription for Savings?

Right now, your coinsurance is often based on the drug's "Wholesale Acquisition Cost" (WAC). Think of it like the sticker price on a car – nobody actually pays that. This bill, specifically SEC. 2, says your coinsurance will be based on the "Actual Acquisition Cost." That's the negotiated price the pharmacy pays, minus any discounts or rebates they get from the drug manufacturer (all reported in something called the "Detailed DIR Report").

• Real-World Example: Imagine Grandma Betty's arthritis medication. If the pharmacy's actual cost after all discounts is $100, but the "wholesale" price is $150, her 20% coinsurance would be $20 instead of $30. That's real savings, especially for folks on multiple medications.

What It Means for You

This change applies to that tricky zone between your yearly deductible and your out-of-pocket maximum. It's where a lot of people get hit with significant drug costs. But, keep in mind, there are exceptions. Drugs listed under paragraphs (8) or (9) of the relevant Medicare rules aren't included in this new calculation. It will be important to find out what those are.

• The Bottom Line: If you're on Medicare Part D, this could mean lower monthly bills for your prescriptions starting in 2026. It's a direct attempt to make meds more affordable by basing your costs on what pharmacies actually pay.

The Catch

While the aim is good, there are always potential challenges. Pharmacies or manufacturers could try to game the system. They might mess with the "negotiated price" or those "manufacturer concessions" to make the actual cost look higher. The bill excludes certain drugs (those under paragraphs (8) or (9)), which could limit the overall savings. We need to watch how this plays out in practice to make sure it delivers the promised benefits. The bill is directing that coverage is to be provided in accordance with subsection (b)(10), whatever that means.