7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase)

AHIP Medicare Certification Exam

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1 Introduction

1.1 About the AHIP Medicare Certification Exam 1.2 How to Use This Study Guide

2 Chapter 2: Medicare Program Fundamentals

2.1 What Medicare Is: Program Structure & How Parts A–D Fit Together 2.2 Medicare Part A — Hospital Insurance 2.3 Medicare Part B — Medical Insurance 2.4 Medicare Eligibility Rules (Age 65, Disability, ESRD, ALS)

3 Chapter 3: Medicare Enrollment Periods

3.1 Initial Enrollment Period (IEP) 3.2 Annual Enrollment Period (AEP): October 15 – December 7 3.3 Medicare Advantage Open Enrollment Period (MA OEP): January 1 – March 31 3.4 Special Enrollment Periods (SEPs) & Qualifying Life Events 3.5 Late Enrollment Penalties (Part A, Part B, Part D)

4 Chapter 4: Medigap & Coordination of Coverage

4.1 Medigap (Medicare Supplement) Basics & Guaranteed Issue Rights 4.2 Dual Eligibility & Medicare Savings Programs 4.3 How Original Medicare, MA, Part D & Medigap Interact

5 Chapter 5: Medicare Advantage Plan Types

5.1 Medicare Advantage (Part C) Overview: How MA Differs from Original Medicare 5.2 HMO & HMO-POS Plans 5.3 PPO Plans 5.4 PFFS Plans (Private Fee-for-Service) 5.5 MSA Plans (Medicare Medical Savings Accounts) 5.6 Cost Plans & Employer Group Waiver Plans (EGWPs)

6 Chapter 6: Special Needs Plans & MA Plan Design

6.1 Special Needs Plans (SNPs) Overview 6.2 D-SNP — Dual-Eligible Special Needs Plans 6.3 C-SNP & I-SNP — Chronic Condition & Institutional Special Needs Plans 6.4 MA Benefits, MOOP & Supplemental Benefits 6.5 MA Star Ratings & Plan Quality

7 Chapter 7: Part D Structure & the 2026 Redesign

7.1 Part D Overview & Eligibility 7.2 Formularies & Drug Tiers 7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase) 7.4 Medicare Prescription Payment Plan (Drug-Cost Smoothing)

8 Chapter 8: Part D Costs, Assistance & Appeals

8.1 Low-Income Subsidy (LIS) / Extra Help 8.2 Part D Late Enrollment Penalty & Creditable Coverage 8.3 Coverage Determinations, Exceptions & Appeals

9 Chapter 9: CMS Marketing Rules & Scope of Appointment

9.1 CMS Medicare Communications & Marketing Guidelines (MCMG) Overview 9.2 Scope of Appointment (SOA): the 48-Hour Rule & Exceptions 9.3 Permitted vs. Prohibited Marketing & Sales Activities 9.4 Marketing Events vs. Educational Events

10 Chapter 10: Enrollment & Disclosure Requirements

10.1 The Pre-Enrollment Checklist (PEC) 10.2 Enrollment Procedures & Application Requirements 10.3 Call Recording & Third-Party Marketing Organization (TPMO) Disclaimers 10.4 Agent & Broker Compensation Rules

11 Chapter 11: Marketing Conduct & Oversight

11.1 Cross-Selling Restrictions & Nominal Gift Value Rules 11.2 Marketing to Vulnerable Populations & Non-Discrimination in Sales 11.3 Website, Social Media & Advertising Compliance 11.4 Complaint Tracking Module (CTM) & Agent Oversight

12 Chapter 12: Understanding Fraud, Waste & Abuse

12.1 Defining Fraud, Waste & Abuse (and the Difference Between Them) 12.2 The False Claims Act 12.3 The Anti-Kickback Statute

13 Chapter 13: Compliance Laws & Screening

13.1 The Stark Law (Physician Self-Referral) 13.2 HIPAA Privacy & Security Basics 13.3 The OIG Exclusion List & Sanctioned-Provider Screening

14 Chapter 14: Reporting, Compliance Programs & Consequences

14.1 Detecting & Reporting FWA 14.2 Compliance Program Requirements (Seven Core Elements) & Non-Discrimination Training 14.3 Consequences & Corrective Action Plans

7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase)

Key Takeaways Explain This Topic AI

The Part D redesign under the IRA eliminated the coverage gap ('donut hole') starting in plan year 2025, leaving only three phases: deductible, initial coverage, and catastrophic.

For 2026, the maximum standard deductible is $615 and the out-of-pocket threshold that triggers catastrophic coverage is $2,100 — both figures increased from 2025's $590 deductible and $2,000 cap.

Catastrophic coverage is now triggered by the beneficiary's actual out-of-pocket spending, not total drug spending as under the old initial coverage limit concept.

In the catastrophic phase, beneficiaries pay $0; the plan sponsor pays 60%, manufacturers discount 20% of applicable drugs, and CMS reinsurance covers the remainder.

The 2026 national base beneficiary premium is $38.99, capped at a 6% year-over-year increase through 2029 under the IRA's Premium Stabilization Program.

Last updated: July 2026

Why the 2026 Part D Redesign Matters on the AHIP Exam

Every AHIP Medicare certification since 2024 has tested the ongoing rollout of the Inflation Reduction Act (IRA) Part D redesign, and 2026 is the second full year of the finished structure. This is guaranteed exam content: CMS explicitly updates its published testing outline every year to reflect the current plan year's dollar figures, and the AHIP module content changes to match. Getting the 2026 numbers wrong is one of the most common ways agents miss questions they otherwise understand conceptually — memorize the actual figures, not just the concept.

How We Got Here: The IRA Phase-In

The Inflation Reduction Act (IRA) , signed into law in August 2022, phased in Part D changes over several years rather than all at once — the AHIP exam has tested a different "current year" slice of this phase-in every year since 2023, so agents need to know where 2026 sits in the sequence:

Plan Year Key Change
2023 $35 monthly cap on insulin cost-sharing; $0 cost-sharing for ACIP-recommended adult vaccines

2024 Catastrophic-phase beneficiary coinsurance (previously 5%) eliminated — beneficiaries paid $0 in catastrophic coverage for the first time, though the coverage gap phase and its total-drug-spend trigger still existed

2025 Full redesign: coverage gap eliminated entirely, replaced by a $2,000 out-of-pocket cap that triggers catastrophic coverage; new Manufacturer Discount Program begins; Medicare Prescription Payment Plan (M3P) launches

2026 Second year of the full redesign; deductible and out-of-pocket cap increase with inflation to $615 and $2,100

From Four Phases to Three

Before the IRA redesign, Part D had four phases: deductible, initial coverage, the infamous coverage gap ("donut hole") , and catastrophic coverage. Beginning with plan year 2025, the donut hole was eliminated entirely . Part D now has three phases , and the trigger for catastrophic coverage changed from a beneficiary's total drug spending to their actual out-of-pocket spending — a critical distinction the exam tests directly.

The Three 2026 Phases

Phase 2026 Threshold What the Beneficiary Pays
Deductible $0 – $615 Up to 100% of drug costs (many plans waive the deductible on Tier 1-2)
Initial Coverage $615 – $2,100 out-of-pocket 25% coinsurance on covered drugs (generic and brand alike)
Catastrophic Above $2,100 out-of-pocket $0 — no cost-sharing for the rest of the calendar year

Two numbers to memorize cold for 2026: the maximum standard deductible is $615 , and the out-of-pocket cap that triggers catastrophic coverage is $2,100 . Both are indexed for inflation each year under the IRA's formula — 2025's figures were a $590 deductible and a $2,000 cap, so expect these numbers to tick upward again for plan year 2027.

Who Pays What: Initial Coverage vs. Catastrophic

The redesign didn't just change the beneficiary's share — it redistributed liability between the beneficiary, the plan sponsor, drug manufacturers, and CMS itself. This liability split is exam-relevant because it explains why plan premiums have shifted and why manufacturers now have direct financial exposure they never had before 2023.

Payer Initial Coverage Phase Catastrophic Phase
Beneficiary 25% coinsurance $0
Plan sponsor 65% (applicable drugs) / 75% (other covered drugs) 60%
Manufacturer (Manufacturer Discount Program) 10% discount on applicable drugs 20% discount on applicable drugs

CMS (federal reinsurance) 10% subsidy on selected drugs during price applicability 20% (applicable drugs) / 40% (other drugs)

The Manufacturer Discount Program replaced the old "coverage gap discount program" that existed when the donut hole was still in place. Manufacturers now provide discounts on their brand-name drugs in both remaining phases, not just the eliminated gap phase — a direct result of the redesign, and a detail the exam likes to test as a "what changed" question.

Base Beneficiary Premium and Premium Stabilization

The 2026 national base beneficiary premium is $38.99 , up $2.21 (about 6%) from 2025's $36.78. This figure is not what most people actually pay — plans set their own premiums around this benchmark — but it matters because the IRA's Premium Stabilization Program caps the year-over-year increase in the base beneficiary premium at 6% through 2029. Without that cap, CMS projected the 2026 figure would have jumped to roughly $75, a 105% increase; the stabilization provision is a direct exam-relevant reason premiums haven't spiked the way underlying drug costs have.

Worked Example

A beneficiary in a standard 2026 PDP with no deductible waiver fills a series of prescriptions:

January–February : Total drug costs reach $615. The beneficiary pays the full $615 (deductible phase).

March–August : The beneficiary keeps filling prescriptions and pays 25% coinsurance on each fill (initial coverage phase) until her cumulative out-of-pocket spending — deductible plus coinsurance combined — reaches $2,100.

September onward : Once out-of-pocket spending crosses $2,100, she enters the catastrophic phase and pays $0 for any covered Part D drug for the rest of the calendar year, no matter how expensive.

Notice this example never mentions total drug cost thresholds like the old $5,000+ initial coverage limit — that concept is gone. The only number that matters for reaching catastrophic coverage now is the beneficiary's own out-of-pocket total .

Common Exam Traps

Citing 2024 or 2025 dollar figures ($2,000 cap, $590 deductible) instead of the current 2026 figures ($2,100 cap, $615 deductible).

Believing the donut hole still exists in any form — it does not, as of 2025.

Forgetting that catastrophic coverage is now triggered by out-of-pocket spending, not total drug spending.

Mixing up the manufacturer's discount percentage in the initial phase (10%) with the catastrophic phase (20%).