Medicare Part D — Prescription Drug Coverage for Medicare Beneficiaries
Medicare Part D provides prescription drug coverage for Medicare beneficiaries. Choosing the right plan requires comparing formularies, tier structures, and cost-sharing for your specific medications. We make that comparison simple — and it costs you nothing.
How Medicare Part D Works
Part D plans are offered by private insurance companies approved by Medicare. Each plan has its own list of covered drugs (formulary), cost-sharing structure, and pharmacy network. The right plan for you depends entirely on which medications you take.
Standalone Part D Plans (PDP)
Prescription drug plans purchased separately to add drug coverage to Original Medicare or a Medicare Advantage plan without drug coverage. You pay a monthly premium in addition to your Part B premium.
Drug Formulary
Each Part D plan has a formulary — a list of covered drugs organized into tiers. Generic drugs are on lower tiers with lower cost-sharing; brand-name and specialty drugs are on higher tiers with higher cost-sharing.
Tier Structure and Cost-Sharing
Most Part D plans have 4 to 6 tiers. Tier 1 (preferred generics) has the lowest copay. Tier 5 or 6 (specialty drugs) can have significant coinsurance. Your out-of-pocket cost depends on which tier your medications fall on.
Deductible
Many Part D plans have an annual deductible before drug coverage kicks in. Some plans waive the deductible for lower-tier drugs. The Medicare Part D deductible maximum is set by CMS each year.
Annual Enrollment Period
Part D plans can be changed during the Annual Enrollment Period (October 15 to December 7) for coverage starting January 1. You can also switch in certain special circumstances during the year.
Late Enrollment Penalty
If you do not enroll in Part D when first eligible and go without creditable drug coverage for 63 or more days, you may pay a permanent late enrollment penalty added to your monthly premium. Enroll on time even if you take no medications.
Part D plan comparison across carriers and formularies
We compare Part D plans across multiple carriers, running your specific medication list through each plan's formulary to find the lowest total annual cost.
What drives your Part D costs
- Monthly premium (varies widely by plan)
- Annual deductible (may apply before coverage)
- Copay or coinsurance per drug by tier
- Pharmacy network (preferred vs. standard)
- Mail-order vs. retail pricing
- Specialty drug cost-sharing
Key Part D Concepts
Understanding these concepts helps you make a more informed Part D decision — and avoid costly mistakes like choosing based on premium alone or missing the enrollment window.
Formulary Verification
The single most important step in choosing a Part D plan is verifying that all your current medications are on the formulary — and at which tier. We run your complete medication list through each plan before recommending one.
- All medications must be on formulary
- Tier placement drives your copay
- Formularies change annually
- Prior authorization may apply to some drugs
Total Annual Cost
Do not choose based on premium alone. A plan with a $0 premium may cost significantly more than a plan with a $40 premium if your medications are on higher tiers. We calculate your estimated total annual drug cost for each plan.
- Premium plus deductible plus copays
- Preferred pharmacy discount
- Mail-order savings for maintenance drugs
- Compare total cost, not just premium
Preferred Pharmacy Network
Part D plans designate preferred pharmacies where cost-sharing is lower. Using a preferred pharmacy rather than a standard network pharmacy can meaningfully reduce your copays. CVS, Walgreens, Walmart, and mail-order pharmacies are commonly preferred.
- Preferred vs. standard pharmacy copays
- Mail-order often lowest cost option
- Verify your pharmacy is preferred
- Ask about 90-day mail-order savings
Extra Help (LIS)
Low Income Subsidy, also called Extra Help, is a federal program that helps people with limited income and resources pay Part D premiums, deductibles, and copays. If you qualify, you may pay significantly less for your prescriptions.
- Federal assistance program
- Reduces premium, deductible, and copays
- Automatic enrollment for Medicaid recipients
- Apply through Social Security or SSA.gov
Coverage Gap History
The coverage gap (formerly called the donut hole) has been significantly reduced by the Inflation Reduction Act. Beginning in 2025, out-of-pocket drug costs are capped at $2,000 annually. This is a significant change that affects plan comparison.
- $2,000 annual out-of-pocket cap (2025)
- Inflation Reduction Act changes
- Catastrophic coverage phase changes
- Review with advisor for current rules
Annual Review
Part D formularies, premiums, and cost-sharing change every year. A plan that was optimal last year may not be optimal this year. We conduct an annual review during open enrollment to ensure your plan is still the best fit.
- Formularies change annually
- Premium and cost-sharing changes
- Your medications may change tier
- Annual review is essential
Frequently Asked Questions
Answers to the questions we hear most often about Medicare Part D enrollment, formularies, and costs.
You should still enroll in Part D when first eligible even if you take no medications. If you go without creditable drug coverage for 63 or more consecutive days, you will pay a permanent late enrollment penalty added to your monthly premium for as long as you have Part D. The penalty is 1 percent of the national base beneficiary premium for each month without coverage.
The best Part D plan depends entirely on your specific medications. We compare your complete medication list across available plans in your area, calculating your estimated total annual cost including premium, deductible, and copays at your preferred pharmacy. Low premiums do not always mean low total costs.
You can use any pharmacy in your plan's network, but cost-sharing is lower at preferred pharmacies. Mail-order pharmacies often offer the lowest cost for maintenance medications, typically dispensing a 90-day supply at a reduced cost. Verify whether your current pharmacy is a preferred pharmacy for the plan you are considering.
The coverage gap, formerly called the donut hole, was a period where beneficiaries paid more for drugs after reaching an initial coverage limit. The Inflation Reduction Act significantly restructured Part D, including a $2,000 annual out-of-pocket cap beginning in 2025. We will explain how current rules apply to your specific situation.
No. Licensed Medicare advisors are paid by the carriers, not by you. The premium you pay is identical whether you enroll through an agent or directly. An independent advisor who compares multiple carriers is the most effective way to find the plan with the lowest total annual cost for your specific medications.
Find the Part D plan with the lowest total cost for your medications.
We run your medication list through every available plan and find the lowest total annual cost — premium, deductible, and copays combined. No cost to you.