Editorial note: Figures on this page reflect the 2026 Medicare program year and are cross-referenced against the official Centers for Medicare & Medicaid Services (CMS) publications. Always confirm current numbers before making enrollment decisions.
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 Medicare Supplement (Medigap) policy. If you're on a Medicare Advantage plan, prescription drug coverage is typically included (a “MAPD” plan). See the official overview on the Medicare.gov Part D page.
Key Part D concepts
- Formulary: Different Part D plans may cover different prescription medications through their formularies.
- 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 cost phases — deductible, initial coverage, and catastrophic coverage — with the annual out-of-pocket cap now protecting against runaway costs.
- Medicare Prescription Payment Plan: you can opt to spread your Part D costs across monthly installments.
The late enrollment penalty
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.
- Verify your preferred pharmacy is included in the plan's network before enrolling.
- Re-shop every year, even if you're happy with your current plan.
If your income and assets are below certain thresholds, you may qualify for Extra Help, which covers most Part D premiums, deductibles, and copays. Apply through the Social Security Administration Extra Help page.
Common mistakes to avoid
- Skipping Part D because you don't take medications today — a future need can trigger a permanent late-enrollment penalty.
- Choosing a plan by premium alone instead of total annual cost across your specific drugs.
- Forgetting to update your prescription list before Annual Enrollment (Oct 15 – Dec 7).
- Filling prescriptions at a non-preferred pharmacy without realizing the copay difference.
- Missing out on Extra Help even though you qualify — it goes unused by millions of eligible beneficiaries every year.
- What: Part D covers the prescriptions you fill at a pharmacy.
- Why: Original Medicare doesn't include most retail drugs; without Part D you're exposed and risk a lifetime penalty.
- How: Enroll during your IEP, review annually during AEP, and use the Medicare.gov Plan Finder to compare total annual cost.
Medicare has neither reviewed nor endorsed this information. For a complete list of plans in your area, call 1-800-MEDICARE (TTY: 1-877-486-2048).