Insurance education
Medicare Part D Prescription Drug Coverage
Original Medicare does not cover most prescriptions you fill at a pharmacy. Medicare Part D is optional prescription drug coverage that helps pay for the brand-name and generic drugs you need. It is offered by private companies approved by Medicare, and it is available to everyone with Medicare. Even if you do not take prescription drugs today, it is worth understanding your options — enrolling late without other creditable drug coverage can mean a permanent penalty.
Two Ways to Get Part D Coverage
- A standalone prescription drug plan (PDP) that you add to Original Medicare. People with a Medicare Supplement usually use this route.
- A Medicare Advantage plan that includes drug coverage, often called an MAPD. Not every Medicare Advantage plan includes drug coverage, so check before you enroll. See Medicare Advantage.
How Drug Plans Differ
- Drug list (formulary): each plan has its own list of covered drugs. Every plan must cover a wide range of medications, including most drugs in certain protected classes such as cancer and HIV/AIDS treatments. Before enrolling, check that your specific prescriptions are on the plan's list and note which tier they fall on. If a drug you need is not covered, you can ask the plan for an exception.
- Tiers: drugs are placed in tiers that affect your share of the cost.
- Pharmacies: plans work with networks of pharmacies. Using a preferred pharmacy usually costs less than a standard one, and many plans offer mail-order delivery. Confirm your regular pharmacy is in the plan's network before enrolling.
- Costs: plans differ in their monthly premium, yearly deductible and copays or coinsurance. No plan may charge a deductible higher than $615 in 2026, and some plans have no deductible. People with higher incomes may pay an additional amount alongside the premium.
- Rules: some drugs need prior authorization, have quantity limits or require trying another drug first.
Because every plan is different, the plan that fits you depends on the exact drugs you take and the pharmacies you use.
The Yearly Out-of-Pocket Cap
Part D has a yearly cap on what you pay out of pocket for covered drugs — $2,100 in 2026, with Medicare adjusting the amount each year. Once you reach the cap, you pay nothing more for covered Part D drugs for the rest of that year.
Spreading Out Your Drug Costs
The Medicare Prescription Payment Plan lets you pay your out-of-pocket drug costs in monthly amounts across the year, instead of all at once at the pharmacy. It does not lower your total costs, but it can make them easier to budget.
Extra Help
People with limited income and resources may qualify for Extra Help, a federal program that helps pay Part D costs. You can apply through Social Security.
The Late Enrollment Penalty
If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period, you may owe a late enrollment penalty. It is added to your monthly premium for as long as you have drug coverage. If you have drug coverage through an employer, keep the yearly notice that says whether it is creditable. Read more about Medicare and employer coverage.
Review Your Coverage Each Fall
Drug plans can change their drug lists, tiers, pharmacy networks and costs every year. The Annual Open Enrollment Period, October 15 to December 7, is the time to compare your coverage for the year ahead. Even if you are happy with your plan, a quick yearly review can confirm your prescriptions are still covered at a cost that works for you.
Talk With Us About Your Situation
Reading about Part D is a good start. Your own situation is what really matters. If you would like to talk through your options, call us at 310-440-0281 or toll free at (844) 532-9009, or contact us here. We will listen first, answer your questions and explain the choices available to you. There is no obligation to enroll in anything.