Medicare Part D — the prescription drug plan, picked for YOUR meds.
The right Part D plan depends entirely on the specific medications you take. We use the Medicare Plan Finder to rank every plan in your ZIP by total annual cost — not just premium. Re-shopped every year.
Medicare Part D, explained
Medicare Part D is the prescription drug benefit. Original Medicare (Parts A and B) doesn't cover most prescription drugs you'd pick up at a retail pharmacy — that's where Part D comes in. You can get Part D coverage two ways:
- Stand-alone Part D Prescription Drug Plan (PDP) — You pair this with Original Medicare (and usually a Medigap supplement). Most clients on Original Medicare have a stand-alone Part D plan.
- Bundled into a Medicare Advantage plan (MA-PD) — Most Medicare Advantage plans include Part D drug coverage automatically.
Either way, the goal is the same: predictable copays for your prescription drugs and protection against catastrophic drug costs.
Big news for 2025+: $2,000 out-of-pocket cap
Starting January 2025, Medicare Part D capped your annual out-of-pocket prescription drug spending at $2,000. This was the biggest change to Part D since its creation — it eliminated the dreaded "donut hole" and gave Medicare clients real financial protection from expensive medications.
How Part D plans are structured
Most Part D plans use a tiered formulary. Each prescription drug is on a tier, and your copay (or coinsurance) is determined by the tier:
| Tier | Typical drugs | Typical copay |
|---|---|---|
| Tier 1: Preferred Generic | Common generics (lisinopril, atorvastatin, metformin) | $0–$5 |
| Tier 2: Generic | Non-preferred generics | $5–$15 |
| Tier 3: Preferred Brand | Common brand-name drugs the plan negotiated good pricing on | $30–$50 |
| Tier 4: Non-Preferred Brand | Brand-name drugs the plan didn't negotiate as aggressively | $80–$120 or 30–45% coinsurance |
| Tier 5: Specialty | High-cost drugs (oncology, autoimmune, biologics) | 25–33% coinsurance |
The same drug can be on different tiers across different Part D plans. This is why the right Part D plan depends entirely on YOUR specific medications. One plan might cover your specific drug as Tier 2 ($10/month) while another classifies it as Tier 4 ($90/month). Same drug. Same dose. Different plan = wildly different cost.
How to choose a Part D plan
The Medicare Plan Finder tool at Medicare.gov is the gold standard for Part D shopping. We use it for every client. Here's how it works:
- Enter your prescriptions, dosages, and preferred pharmacy (or whether you use mail order)
- Plan Finder checks every Part D plan available in your ZIP code
- Each plan is ranked by your total annual cost — premium + deductible + copays for your specific drugs
The "best" Part D plan for you might be the cheapest premium with high copays, OR the highest premium with $0 copays on your meds. Total cost wins, not premium alone.
Why Part D shopping matters every year
Plan formularies change every year. The plan that's best for you in 2026 might rank 7th best in 2027 if a generic became available, your dosage changed, or the carrier shifted tiers. We re-shop Part D for our clients every Annual Enrollment (Oct 15 – Dec 7).
Part D enrollment periods
- Initial Enrollment Period (IEP) — the 7-month window around your 65th birthday
- Annual Enrollment Period (AEP) — October 15 to December 7. Switch Part D plans for the next calendar year.
- Special Enrollment Periods (SEPs) — year-round for qualifying events
The Part D late-enrollment penalty
If you go without creditable prescription drug coverage for 63+ continuous days after your IEP ends, you'll pay a permanent Part D penalty when you eventually enroll. The penalty is 1% of the national base beneficiary premium for each month you went without — and it's added to your Part D premium for as long as you have Part D. Even if you don't take any prescriptions today, enroll in a low-cost Part D plan to avoid the lifetime penalty.
Part D and the Extra Help / Low-Income Subsidy (LIS)
If your income is below certain thresholds, you may qualify for "Extra Help" (also called the Low-Income Subsidy or LIS). It can dramatically lower or eliminate your Part D premium, deductible, and copays. We screen every client for LIS eligibility — and many qualify without realizing it.
Things to consider when picking Part D
- Your specific medications — absolutely the most important factor
- Your preferred pharmacy — many plans have "preferred pharmacies" with much lower copays. CVS, Walgreens, Walmart, Kroger, and Costco often appear as preferred
- Mail order option — for chronic medications, mail-order 90-day supplies often save real money
- Star Rating — CMS rates Part D plans 1–5 stars on quality and member experience
- Total annual cost — not just premium. Always look at premium + deductible + drug copays for the full year
Frequently asked questions
Do I need Part D if I don't take any prescriptions?
Yes — almost always. Even if you take no medications today, going without creditable drug coverage triggers a permanent late-enrollment penalty if you enroll later. Most Part D plans have premiums starting around $0–$15/month, so the cost of having coverage 'just in case' is minimal vs. the lifetime penalty.
What's 'creditable drug coverage'?
Drug coverage that's at least as good as standard Medicare Part D. Common sources: employer/retiree plans, VA prescription benefits, Tricare, and certain other group plans. If your current drug coverage is creditable, you can delay Part D without penalty. Get written confirmation from the plan administrator.
Can I have Part D and a Medigap supplement at the same time?
Yes — that's a common combination. Original Medicare + Medigap (for medical) + Stand-alone Part D (for drugs) is the most flexible Medicare configuration.
Is Part D included in Medicare Advantage?
Almost always, yes — those plans are called MA-PD plans (Medicare Advantage with Prescription Drug coverage). A few rare MA plan types (like MSAs) don't include Part D. You can't have both an MA-PD plan AND a stand-alone Part D plan — Medicare disenrolls you from one if you enroll in the other.
Why does my Part D premium include an IRMAA?
If your income exceeds certain thresholds (based on your tax return from two years prior), Medicare adds an Income-Related Monthly Adjustment Amount to your Part D premium. The IRMAA is in addition to the plan's regular premium. You can appeal it with Form SSA-44 if you've had a 'life-changing event' that reduced your income.
How does the new $2,000 out-of-pocket cap work?
Starting in 2025, your annual out-of-pocket spending on Part D-covered drugs is capped at $2,000. Once you hit the cap, the plan covers 100% of covered drug costs for the rest of the calendar year. You can also opt into the Medicare Prescription Payment Plan to spread the $2,000 across monthly installments.
Should I review my Part D plan every year?
Yes. Plan formularies and tier placements change every year, and your medications might change too. We re-shop every Annual Enrollment (Oct 15 – Dec 7) to make sure you're still in the best plan for your specific drugs.
What if my drug isn't on the formulary?
You can request an exception from the carrier (often successful when the doctor explains medical necessity), switch to a covered alternative, or shop for a different Part D plan that does cover your drug. We handle exception requests with you.
Related coverage
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Find your best Part D plan for next year.
Free 15-minute call. Send me your prescription list and pharmacy and I'll rank every Part D plan in your ZIP by total annual cost.