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Medicare Part D Plans

Medicare Part D is optional prescription drug coverage offered through private insurance companies approved by Medicare. You can get Part D through a stand-alone Medicare drug plan or through many Medicare Advantage plans that include drug coverage.

The right Part D plan depends heavily on the prescriptions you take, the pharmacies you use, and the plan’s current formulary and cost-sharing rules.

How Medicare Part D works

A stand-alone Medicare drug plan can add prescription coverage to Original Medicare and certain other Medicare coverage arrangements. Many Medicare Advantage plans bundle Part A, Part B, and Part D coverage together.

If you are in a Medicare Advantage HMO or PPO that does not include drug coverage, you generally cannot add a separate stand-alone Part D plan. Check the rules before making a change.

What Part D plans cover

Each plan has a formulary, which is its list of covered drugs. Plans can place drugs into different tiers with different copayments or coinsurance.

Plans may also use coverage rules such as:

  • prior authorization;
  • step therapy;
  • quantity limits; and
  • drug-management and safety programs.

A drug being covered by one Part D plan does not mean every Part D plan covers it the same way.

Pharmacies can change your costs

Part D plans use pharmacy networks. Some pharmacies may be preferred and offer lower plan-negotiated cost sharing than standard network pharmacies.

When comparing plans, enter your actual prescriptions and preferred pharmacies. A plan with a lower premium may cost more overall if your drugs are on higher tiers or your pharmacy is not preferred.

2026 Part D costs

Part D premiums vary by plan. Higher-income beneficiaries may also pay an income-related adjustment in addition to the plan premium.

For 2026, no Medicare drug plan may have a deductible higher than $615, although a plan can set a lower deductible or no deductible.

For covered Part D drugs, the annual out-of-pocket cap is $2,100 in 2026. After your eligible out-of-pocket spending reaches the cap, you do not add new out-of-pocket costs for covered Part D drugs for the rest of the year.

These figures are annual Medicare program amounts and can change each year.

Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan is available to people with Medicare drug coverage. It lets you spread eligible out-of-pocket prescription costs across the remaining months of the calendar year instead of paying the full amount at the pharmacy when you fill a prescription.

The payment option can help manage cash flow, but it does not reduce the total amount you owe for your covered drugs.

Extra Help

Extra Help, also called the Low-Income Subsidy, can lower Part D premiums, deductibles, coinsurance, and other drug costs for people who qualify.

Some people qualify automatically because they have full-benefit Medicaid, receive help from a Medicare Savings Program, or receive Supplemental Security Income. Other people can apply through Social Security.

If you receive Extra Help, you do not pay a Part D late-enrollment penalty while you have the assistance.

Avoiding the Part D late-enrollment penalty

If you go 63 days or more in a row after becoming eligible for Medicare without Part D or other creditable prescription drug coverage, you may owe a Part D late-enrollment penalty if you enroll later.

Creditable drug coverage is coverage expected to pay, on average, at least as much as standard Medicare drug coverage. Employer, union, VA, TRICARE, and other coverage may qualify, but you should keep the annual notice that tells you whether your coverage is creditable.

Review Part D every year

Drug plans can change their premiums, formularies, pharmacy networks, tier placement, and utilization-management rules.

During an annual review, check:

  1. every prescription;
  2. dosage and quantity;
  3. formulary status;
  4. drug tier;
  5. prior authorization;
  6. step therapy;
  7. quantity limits;
  8. preferred pharmacies;
  9. plan premium;
  10. deductible and cost sharing; and
  11. whether Extra Help or another assistance program may apply.

Get help comparing Medicare drug coverage

Wise Owl Insurance Group can help you review Medicare drug-coverage information based on your prescriptions and location. Plan availability, premiums, formularies, pharmacy networks, and cost sharing vary by plan and year.

Wise Owl Insurance Group is not connected with or endorsed by the U.S. government or the federal Medicare program. For information about all available Medicare options, use Medicare.gov or call 1-800-MEDICARE.

Last reviewed: September 22, 2026.