How Part D Works
Stand-alone Part D plans (PDPs) are sold by private insurers and cover prescription drugs for people on Original Medicare or a Medicare Supplement. Most Medicare Advantage plans include drug coverage (MAPD), so if you're on an Advantage plan you generally don't buy a separate PDP.
- Formulary: each plan's list of covered drugs, sorted into tiers with different copays. A drug can be on one plan's list and not another's, or on a cheaper tier.
- Pharmacy network: "preferred" pharmacies usually have the lowest copays; a plan can be great at one chain and poor at another.
- Deductible: many plans charge a deductible before coverage starts, often waived for lower tiers.
- Yearly cap: once what you've paid for covered drugs reaches the yearly limit — $2,100 in 2026, $2,400 in 2027 — you pay nothing more for covered drugs for the rest of the year. The maximum plan deductible is $615 in 2026 and $700 in 2027. The Medicare Prescription Payment Plan also lets you spread costs across monthly payments.
The Late-Enrollment Penalty
If you go 63 days or more without Part D or other creditable drug coverage after your Initial Enrollment Period ends, Medicare adds a penalty to your premium — about 1% of the national base premium for every month you went without — and it lasts as long as you have Part D. If you're healthy and take nothing today, a low-premium plan is usually cheaper than the penalty later.
Extra Help
Medicare's Extra Help program pays most Part D costs for people with limited income and resources, and the income limits are higher than many people assume. We check eligibility as part of every drug review and help with the application.
How We Review Your Drug Plan
- You give us your medication list (names, strengths, how often) and your pharmacy.
- We price that exact list in every Part D plan in your county for the coming year.
- We show total yearly cost — premium plus what you'd pay at the counter — not just the premium.
- We repeat it every fall. Formularies and preferred pharmacies change every year, and last year's best plan often isn't this year's.
Common Questions
Do I need Part D if I don't take any medications?
Not required, but if you later need drug coverage you'll pay a permanent late-enrollment penalty for every month you went without creditable coverage. A low-premium plan is often the cheaper insurance against that.
What is the Part D out-of-pocket cap?
In 2026, once your out-of-pocket spending on covered Part D drugs reaches $2,100, you pay $0 for covered drugs for the rest of the year. For 2027 plans the cap is $2,400 (CMS CY2027 Rate Announcement). The cap is adjusted each year by Medicare.
Can I change my Part D plan every year?
Yes. You can switch during the Annual Enrollment Period (October 15 – December 7) for coverage starting January 1. Some people also qualify for Special Enrollment Periods, and people with Extra Help can change more often.
Why is my drug cheaper on one plan than another?
Each plan negotiates its own formulary and tiers, and preferred-pharmacy pricing differs. The same brand can be Tier 3 on one plan and Tier 4 on another, which can mean hundreds of dollars a year.
Does Medicare Advantage include Part D?
Most Medicare Advantage plans include drug coverage. If you choose one that doesn't, you usually cannot add a separate Part D plan to it (except with certain PFFS or MSA plans).
