How Part D works
Part D plans are sold by private insurance companies approved by Medicare. You enroll in a standalone Part D plan if you have Original Medicare or a Medigap policy. If you're on a Medicare Advantage plan, drug coverage is usually built in.
Key Part D concepts
- Formulary: the list of drugs a plan covers. Two plans can cover very different drug lists.
- Tiers: drugs are grouped into pricing tiers (generic, preferred brand, non-preferred brand, specialty).
- Preferred pharmacies: using a plan's preferred pharmacy network often means lower copays.
- Coverage phases: Part D has multiple cost phases throughout the year — deductible, initial coverage, and catastrophic coverage.
The late enrollment penalty
If you go 63+ days without creditable prescription drug coverage after you're first eligible, you may owe a permanent monthly Part D late enrollment penalty when you do enroll. It's added to your premium for as long as you have Part D.
Why an annual review matters
Drug formularies, tiers, and pharmacy networks change every year. The plan that was perfect last fall might cost hundreds more next year — for the exact same medications. Scott helps clients re-shop their Part D plan each Annual Enrollment Period (October 15 – December 7).
Tips for comparing Part D plans
- Have your full prescription list ready, including dosages.
- Check that each drug is on the formulary and at a reasonable tier.
- Compare total estimated annual cost — not just the monthly premium.
- Check which pharmacies are preferred versus standard.
- Re-shop every year, even if you're happy with your current plan.