Medicare Part D provides prescription drug coverage through private plans approved by Medicare. Part D has had an annual out-of-pocket cap since 2025; in 2026 the cap is $2,100, protecting New Mexico beneficiaries from catastrophic prescription costs. Part D plans are available as standalone Prescription Drug Plans (PDPs) or included within Medicare Advantage plans.
2026 Part D Coverage Stages
| Stage | What You Pay |
|---|---|
| Annual Deductible | Up to $615 (deductibles vary by plan) |
| Initial Coverage | Copays or coinsurance per prescription, until you reach the $2,100 out-of-pocket cap |
| Catastrophic Coverage | $0 after reaching $2,100 in out-of-pocket costs |
Out-of-pocket cap: The Inflation Reduction Act created an annual out-of-pocket cap on Part D prescription drug spending starting in 2025; in 2026 the cap is $2,100. Once you reach this amount, you pay $0 for covered drugs for the rest of the year. This is a major change that benefits New Mexico seniors with high prescription costs.
Choosing a Part D Plan in New Mexico
Part D plan availability varies by county. When comparing plans, consider your specific medications, preferred pharmacies, and total estimated annual costs (not just the monthly premium). A plan with a slightly higher premium may save you money overall if it has lower copays for the drugs you take.
Compare Part D plans in your New Mexico county to find the best fit for your prescriptions.
Extra Help (Low-Income Subsidy)
If you have limited income and resources, you may qualify for Extra Help (also called the Low-Income Subsidy or LIS) to help pay Part D premiums, deductibles, and copayments. In New Mexico, you can apply through Social Security, your local Medicaid office, or by calling 1-800-772-1213.
Don't Miss the Enrollment Deadline
The Annual Enrollment Period for Part D is October 15 through December 7. If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, you may face a late enrollment penalty that is generally added to your premium for as long as you have Part D. Talk to a local agent to make sure you are covered.