What Is Medicare Part D?
Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D, which covers prescription drugs. Original Medicare covers very few drugs you take at home, so most people need Part D or another form of drug coverage.
Part D plans are sold by private insurance companies approved by Medicare. You can get Part D two ways: as a stand-alone drug plan that works alongside Original Medicare and a Medigap plan, or built into a Medicare Advantage plan. Most Medicare Advantage plans include drug coverage, but not all do, so check before you enroll. To join a Part D plan, you need Part A or Part B and must live in the plan’s service area.
Plans differ in their premiums, deductibles, copays, covered drugs, and pharmacy networks, and those details change every year. The plan that was cheapest for you last year may not be this year, which is why it pays to compare plans each fall using your actual prescriptions.
How to Compare Part D Plans
The best way to choose a Part D plan is to compare plans using your own list of drugs and your preferred pharmacy. This step-by-step video from our team shows how to compare 2027 Medicare Part D drug plans on Medicare.gov. If you would rather not do it yourself, we can run the comparison for you at no cost.
Medicare Part D Coverage
Every Part D plan has a formulary, a list of the drugs it covers. Medicare requires each plan to cover at least two drugs in each category and class, and to cover all or nearly all drugs in six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants, cancer drugs, and HIV/AIDS drugs.
Formularies are usually split into tiers, and drugs on lower tiers, such as generics, cost less. Plans can also use prior authorization, step therapy, or quantity limits for some drugs. If a drug you need is not covered, you or your doctor can ask the plan for an exception.
Part D plans cover recommended adult vaccines, such as shingles and RSV, at no cost to you. Covered insulin costs no more than $35 for a month’s supply, and the deductible does not apply.
What drugs doesn’t Part D cover?
Part D does not cover drugs that Part A or Part B already cover, such as drugs given in the hospital or many drugs given in a doctor’s office. By law, plans also generally do not cover drugs used for weight loss or weight gain, fertility drugs, erectile dysfunction drugs, drugs used for cosmetic purposes or hair growth, over-the-counter drugs, most vitamins and minerals, and drugs used only to relieve cough and cold symptoms. Some of these drugs may be covered when prescribed for another medically accepted condition, so ask us or your plan about your specific medication.
What Part D Costs
With a Part D plan, you may pay a monthly premium, an annual deductible, and copays or coinsurance when you fill prescriptions. If your income is above a certain level, you also pay an extra amount called the Income-Related Monthly Adjustment Amount (IRMAA), which is paid directly to Medicare, usually out of your Social Security check.
The Three Phases of Part D Coverage
Part D coverage has three phases. In the deductible phase, you pay the full cost of your drugs until you meet your plan’s deductible, which cannot be more than $615 in 2026 or $700 in 2027, and some plans have no deductible. In the initial coverage phase, you pay a copay or coinsurance and your plan pays the rest. Once your out-of-pocket drug costs reach $2,100 in 2026 or $2,400 in 2027, you enter catastrophic coverage and pay nothing for covered drugs for the rest of the year. The old coverage gap, or “donut hole,” no longer exists.
Spreading Out Your Costs
The Medicare Prescription Payment Plan lets you pay your out-of-pocket drug costs in monthly installments over the year instead of all at once at the pharmacy. It is free to join through your Part D or Medicare Advantage plan and can help if you take expensive medications.
Help Paying for Part D
Extra Help, also called the Low-Income Subsidy, lowers Part D premiums, deductibles, and copays for people with limited income and resources. You qualify automatically if you have Medicaid, Supplemental Security Income, or a Medicare Savings Program, which helps pay Part B costs. Otherwise, you can apply through Social Security.
When to Enroll in Part D
You can first join a Part D plan during your Initial Enrollment Period, the seven months around your 65th birthday. After that, you can join, switch, or drop a plan during the Annual Enrollment Period from October 15 to December 7, with changes starting January 1. Certain life events, such as moving or losing employer coverage, give you a Special Enrollment Period.
The Part D 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 ends, you may owe a late enrollment penalty. It equals 1% of the national base beneficiary premium for each month you went without coverage, and it is added to your premium for as long as you have Part D. Employer and union plans tell you each year whether your drug coverage is creditable.
Frequently Asked Questions
Do I need Part D if I don’t take any medications?
In most cases, yes. A low-premium plan protects you if you need medication later and helps you avoid the late enrollment penalty.
Can I change my Part D plan?
Yes. You can switch plans every year during the Annual Enrollment Period, and we recommend reviewing your plan each fall because premiums and covered drugs change.
Is there a cap on what I pay for drugs?
Yes. Once your out-of-pocket drug costs reach the yearly limit, $2,100 in 2026 and $2,400 in 2027, you pay nothing more for covered drugs that year.
Can you help me choose a plan?
Yes. We compare plans using your prescriptions and pharmacy and help you enroll, at no cost to you.
