Does the Medicare Part D maximum out-of-pocket spending limit (RxMOOP) include spending on non-Part D drugs?

No.  The annual Medicare Part D maximum out-of-pocket spending limit (RxMOOP) does not include non-Part D drugs or drugs excluded from the Part D program - even when the drugs are on the Medicare drug plan's formulary as Bonus or Supplemental drugs.

As background, starting in 2025, the Inflation Reduction Act provided that all stand-alone Medicare Part D prescription drug plans (PDPs) and Medicare Advantage plans with drug coverage (MAPDs) will have a out-of-pocket spending limit on Part D formulary drugs.  The RxMOOP was set to $2,000 for 2025 and will increase to $2,100 in 2026.


Question: What counts toward the annual RxMOOP?

What you actually spend out-of-pocket on Medicare Part D drugs found on your plan’s formulary will count toward the maximum prescription drug out-of-pocket spending limit for the entire year (RxMOOP).

As a 2026 example, assume your Medicare Part D drug plan has a $615 deductible and then 25% cost-sharing after the deductible for all formulary Part D drugs.

First, the $615 deductible you spend out-of-pocket toward Part D formulary drugs will count toward meeting your RxMOOP ($2,100 for 2026).

So, in our example, we will assume your first purchase of the new year is a Tier 3 formulary drug with a $1,000 retail price and your plan has a 25% cost-sharing for Tier 3 drugs.  You will first spend $615 to meet the 2026 deductible.  In addition, you will pay 25% of the remaining retail balance (($1,000 - $615) * 25% = $96.25).

After this first $1,000 Tier 3 drug purchase your total out-of-pocket spending would be $615 + $96.25 = $711.25.

You will have $2,100 - $711.25. = $1,388.75 left to spend for the remainder of the year before meeting your $2,100 RxMOOP limit.

If you use the same $1,000 Tier 3 drug each month you will have only the 25% coinsurance or pay $250 a month (since you met the $590 deductible with the first purchase).  This means that in just over 6 months, you will meet the $2,000 RxMOOP and have no additional costs for Part D formulary drugs through the remainder of the year.

Technical note about what is also included in the TrOOP limit:  What you actually spend on formulary Part D drugs and, in addition, Medicare also notes that "supplemental Part D coverage provided by enhanced alternative (EA) Part D plans and other health insurance (OHI) will be counted as incurred costs and included in the calculation of TrOOP. This includes supplemental coverage provided by EGWPs [employer and group plans], plan reductions in cost sharing for enrolled beneficiaries, such as reductions by Medicare-Medicaid Plans and D-SNPs [dual Special Needs Plans], and CMMI model benefits that reimburse costs for covered Part D drugs (unless stated otherwise in a Request for Applications).   Note that, under section 1860D-2(b)(4)(C)(iii)(II) of the Act, only amounts reimbursed by supplemental coverage will be newly included in the calculation of TrOOP.... Additionally, section 1860D-2(b)(4)(C)(iii)(II) of the Act states that reimbursements through “certain other third party payment arrangements” are to be included in the calculation of TrOOP.  Because the statute does not specify which certain other third party payments count as incurred costs, CMS maintains discretion on this matter. For 2025, we are not counting as incurred, TrOOP-eligible costs any other third party payments not considered TrOOP-eligible prior to 2025, as CMS is unaware of any third party payment arrangements in addition to those described above that the Act or existing regulations do not otherwise exclude from the calculation of TrOOP. "


Question: What does not count toward your RxMOOP spending limit?

• Your monthly Medicare plan premiums will not count toward the annual RxMOOP.  (Important: You need to keep paying your monthly premium even after reaching your spending limit.)
  
  
• If you buy a drug that is not covered by the Medicare Part D program, the cost of the non-Part D drug will not count toward the RxMOOP.
  
  
• If you buy a non-formulary Part D drug (a Part D drug not covered on your plan’s formulary), the cost will not count toward your RxMOOP.  (However, you have the right to ask your plan for a formulary exception whereby, if granted, your non-formulary Part D drug will be covered by your Medicare drug plan - and counted toward your spending limit).
  
  

Question: I thought that non-Part D drugs covered by my Medicare Part D plan will count toward the Rx out-of-pocket spending limit?

 The Centers for Medicare & Medicaid (CMS) 2025 guidance document expressly state that non-Part D drugs would not be included within the TrOOP calculation.  In the comments section, CMS notes:

"Comment: Several commenters requested clarification on whether the inclusion of EA [Enhanced Alternative] supplemental benefits in TrOOP includes coverage of supplemental [or bonus] drugs not covered under Part D.

Response: CMS thanks the commenters for their questions. Costs incurred for supplemental drugs not covered under Part D are not included in TrOOP. Under section 1860D-2(b)(4)(C)(i) of the Act, only costs incurred with respect to covered part D drugs are included in the definition of incurred costs and, therefore, are TrOOP-eligible." [formatting added]

Further, within the same document CMS sets forth the final 2025 guidance in Section 30 "Changes in True Out-Of-Pocket Costs (TrOOP)" noting:

"Section 11201 of the IRA amended section 1860D-2(b)(4)(C) of the Act to update the definition of incurred costs and, thus, which costs count toward TrOOP spending. TrOOP is spending on covered Part D drugs by the beneficiary or on their behalf by certain third parties. TrOOP costs determine when a beneficiary becomes an applicable beneficiary for the Discount Program (as discussed in Section 40 below), reaches the annual OOP threshold, and subsequently enters the catastrophic coverage phase. As described in Section 20 of this document, for CY 2025, the annual OOP threshold will be $2,000.

Unless otherwise stated below, guidance for prior years with respect to incurred or TrOOP-eligible costs—including guidance on costs that do and do not count as incurred costs and TrOOP-eligible and ineligible payers—continues to apply for CY 2025.[footnote 29] "

[footnote 29] "Refer to CMS’ Medicare Prescription Drug Benefit Manual – Chapter 5, Section 30."

Where the referenced Medicare manual, Section 30 "Incurred/ “True Out-of-Pocket” (TrOOP) Costs (Rev. 1, Issued: 07-03-08, Effective: 07-03-08, Implementation: 07-03-08)" also includes Section 30.2 "Costs that Do Not Count as Incurred Costs (Rev. 14, Issued; 09-30-11, Effective: 09-30-11, Implementation: 09-30-11)" and this section notes:

"The following are not considered incurred costs and cannot be added to an enrollee’s TrOOP balance:
 ...
2. Costs for non-Part D drugs, as described in section 20.1 of Chapter 6 [https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovcontra/downloads/part-d-benefits-manual-chapter-6.pdf]"

In Chapter 6 Section 20.1 "Excluded Categories", the Medicare manual notes:  

"Part D does not cover drugs or classes of drugs, or their medical uses, which are excluded from coverage or otherwise restricted under section 1927(d)(2) of the Act. Drugs Excluded from Part D coverage:
 ...
• [for example,] Agents when used for cosmetic purposes or hair growth."

Important Note:  You can spread your Medicare Part D drug spending over the entire year.

Using the above example of the $1,000 Tier 3 drug, you will also have the option to shift the continued cost of the your drug purchases (including the expensive $1,000 drug) over the entire year.

So, you would not need to pay the full RxMOOP in the first 6 months of the year and then have $0 cost for the remainder of the year.  Instead, you can opt into your plan’s payment smoothing program (called: the “Medicare prescription payment plan” or MPPP or M3P) and the optional MPPP would then take your monthly out-of-pocket spending and spread it across the whole year instead of paying everything in the first 6 to 7 months.  In our example, you would still pay the full $2,000 for the year, but spread in varying payments through December.  You can click here to read more about the optional MPPP.


Sources include:

https://www.cms.gov/files/document/final-cy-2025-part-d-redesign-program-instructions.pdf)
https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovcontra/downloads/memopdbmanualchapter5_093011.pdf