PART D DRUG PLAN
Medicare Part D helps with the cost of prescription drugs. You can get drug coverage with a standalone Part D plan or as part of a Medicare Advantage plan also known as Part C. Typically, plans will have a network of pharmacies and many plans offer mail order. Often discounts are provided for utilizing preferred network pharmacies. These discounts vary based on the specific plan and the insurance company offering the plan. Plans are offered by private insurance companies approved by Medicare. Your plan choices vary based on where you live. Coverage and costs beyond standards set by Medicare vary from plan to plan.
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ELIGIBILITY: You must be enrolled in Medicare Part A or Part B to be eligible for a Part D Plan
MUST KNOW
You must enroll when first eligible for Part D coverage otherwise you are subject to a Late Enrollment Penalty – this penalty is charged every month for as long as you have Part D coverage
COVERAGE STAGES
Part D has three stages. You pay a share of the cost for your drugs in each stage up to a limit (established by the government each calendar year). You may not reach all stages. The cycle resets at the beginning of each calendar year.
PART D PLANS INCLUDE
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Formulary - a list of prescription drugs covered by a plan
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Formulary Tiers - drugs grouped by generic, brand, specialty, etc. typically lower tiers cost less
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Step Therapy - plans may require you to try a generic first
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Prior Authorization - certain drugs may require more information before approving the prescription
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Quantity Limits - some drugs have quantity limits
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Preferred Pharmacies - some plans have lower copays / coinsurance at select pharmacies
COVERAGE STAGES
Annual Deductible – many plans have a deductible you pay 100% of the costs for drugs that are subject to your plan’s deductible which can be up to $615 in 2026
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Initial Coverage – your copays (flat dollar amount) or coinsurance (percentage of cost of drug) as outlined by your plan up to a Rx Maximum Out of Pocket, $2,100 in 2026
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Catastrophic – you pay $0 for the remainder of the calendar year