Short answer: if you have Medicare drug coverage, your yearly out-of-pocket cost for covered drugs has a cap, and you can spread what you owe across the year at no cost. Extra Help, drug company programs and tax-favored accounts can lower or spread the rest. Check these before you borrow. This is general information, not tax advice.
Medicare Part D in 2026
- After any deductible, you pay 25% coinsurance until your out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026 ($2,400 in 2027), including certain payments made for you, like through Extra Help (Medicare.gov).
- Then catastrophic coverage starts, and you pay nothing out of pocket for covered Part D drugs for the rest of the calendar year (Medicare.gov).
- No Medicare drug plan may have a deductible above $615 in 2026 (Medicare.gov).
The Medicare Prescription Payment Plan
- It spreads your out-of-pocket costs for drugs your plan covers across the calendar year, January to December, with monthly bills from your plan instead of paying at the pharmacy (Medicare.gov).
- There is no cost to take part. It does not save you money or lower your drug costs (Medicare.gov).
- All plans offer it, and taking part is voluntary. It is for people with a Medicare drug plan or a Medicare health plan with drug coverage. Contact your plan to join (Medicare.gov).
Extra Help
Extra Help is a Medicare program that helps people with limited income and resources pay Part D premiums, deductibles, coinsurance and other costs. You qualify automatically if you qualify for Medicaid, a Medicare Savings Program or Supplemental Security Income (Medicare.gov; Medicare.gov). The 2026 limits Medicare.gov lists (Medicare.gov):
| Income limit | Resource limit | |
|---|---|---|
| Individual | $23,940 | $18,090 |
| Married couple | $32,460 | $36,100 |
You apply through Social Security (SSA), and your State Health Insurance Assistance Program (SHIP) can help with the application for free (Medicare.gov). Medicare.gov has the full rules, including what counts as a resource.
Drug company assistance and generics
Medicare.gov suggests checking whether the company that makes your drug offers help paying for it, and links a search for these programs in its plan finder (Medicare.gov). Ask your doctor or pharmacist whether a generic version of your drug is available, and compare what your plan charges for each.
HSA, FSA and tax rules
- For the medical expense deduction, you can include prescribed medicines and drugs and insulin. Except for insulin, a drug that is not prescribed does not count (Pub 502).
- For an FSA or HRA, over-the-counter medicine, whether or not prescribed, is considered medical care (Pub 969).
- For an HSA, expenses from before you set up the account are not qualified medical expenses (Pub 969).
If you still need to borrow
This example is only for the math, not an average drug cost. It borrows $1,500 over 24 months at the Federal Reserve's August 2026 averages: 11.90% APR for 24-month personal loans and 22.36% for credit card plans (G.19). Your rate depends on your credit and the lender. If you have Medicare drug coverage, compare this with the payment plan above, which has no cost.
| Option | Monthly payment | Interest | Total paid |
|---|---|---|---|
| Personal loan at 11.90% | $70.54 | $192.96 | $1,692.96 |
| Credit card at 22.36% | $78.08 | $373.92 | $1,873.92 |
$70.54 x 24 = $1,692.96, and $78.08 x 24 = $1,873.92. How to fit a payment in is in how to budget for a loan payment, and for bills you already have, see medical bill payment plan vs personal loan.
Checklist before you borrow
- If you have Medicare, check how close you are to the 2026 out-of-pocket cap.
- Ask your plan about the Medicare Prescription Payment Plan.
- Compare your income and resources with the Extra Help limits, and apply through Social Security if you may qualify.
- Check whether the drug maker has an assistance program, and ask about a generic.
- Use HSA or FSA funds for eligible costs before taking on interest.
Start your loan request How our service works
Sources
- Medicare.gov: Costs for Medicare drug coverage
- Medicare.gov: Medicare Prescription Payment Plan
- Medicare.gov: Help with drug costs (Extra Help)
- Social Security: Apply for Extra Help with Medicare prescription drug plan costs
- IRS Publication 502: Medical and Dental Expenses
- IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
- Federal Reserve: G.19 Consumer Credit (released October 7, 2026), terms of credit, August 2026: credit card plans and 24-month personal loans
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.