Medicare Part D Prescription Drug Plans: How They Work and Where to Enroll

Medicare drug coverage (Part D) helps pay for the prescription drugs you take. It’s optional, but even if you don’t take medications now, it’s worth understanding your options: if you decide not to get drug coverage when you’re first eligible and don’t have other creditable coverage (like coverage from an employer or union) or qualify for Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later, generally for as long as you have Medicare drug coverage.

To get Medicare drug coverage, you must join a Medicare-approved plan. Costs and covered drugs (the plan’s “formulary”) vary significantly between plans, so it’s worth comparing rather than picking the first one you see.

There Are 2 Ways To Get Medicare Drug Coverage

1. A stand-alone Medicare drug plan (PDP). This adds Part D coverage to Original Medicare, some Medicare Cost Plans, some Private Fee-for-Service plans, and Medical Savings Account plans. You must have Part A and/or Part B to join.
2. Medicare Advantage Plans or other Medicare health plans with drug coverage. You get your Part A, Part B, and drug coverage bundled into one plan. Not all Medicare Advantage plans include drug coverage, and you generally can’t pair a stand-alone Part D plan with a Medicare Advantage plan that already includes one.

In either case, you must live in the plan’s service area and be lawfully present in the U.S.

What Does Part D Cost In 2026?

Costs vary by plan and depend on your income, but as of 2026 the Part D standard benefit works in three phases: a deductible phase (plans can charge up to $615 before coverage kicks in), an initial coverage phase where you pay a percentage of drug costs, and a catastrophic phase once your out-of-pocket spending on covered drugs reaches $2,100 for the year, after that, your plan covers 100% of costs for the rest of the year. There’s no more “coverage gap” or “donut hole.” If you’d rather not pay large amounts at the pharmacy counter, the Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly installments across the year instead. For 2027, CMS raised the maximum deductible to $700 and the out-of-pocket cap to $2,400 (CMS).

When Can I Join, Switch, Or Drop A Plan?

• Initial Enrollment Period, when you first become eligible for Medicare, you can join a plan.
• Annual Enrollment Period (October 15 – December 7), join, switch, or drop a plan each year, with coverage starting January 1.
• Medicare Advantage Open Enrollment Period (January 1 – March 31), if you’re enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan or back to Original Medicare (and join a separate Part D plan) once during this window.

Already Have Coverage? It’s Worth Checking Every Year.

Plan formularies, pharmacy networks, and premiums can change from year to year, even if your plan’s name stays the same. We recommend reviewing your Part D or Medicare Advantage drug coverage every Annual Enrollment Period to make sure your medications are still covered at a price that makes sense, especially if you’re also weighing a Medicare Supplement plan or hospital indemnity coverage.

Not yet 65? See our individual health insurance options in the meantime.

Common Mistakes People Make With Part D

• Skipping drug coverage entirely because they don’t take medications now, then facing a late enrollment penalty later.
• Assuming last year’s plan still covers this year’s medications at the same price without checking the new formulary.
• Not comparing preferred pharmacy networks, which can make a real difference in copay costs.
• Overlooking the Medicare Prescription Payment Plan option for spreading out high drug costs across the year.
• Using an out-of-network pharmacy and being surprised the drug isn’t covered there.
• Changing or dropping current or previous employer or union drug coverage without checking with the benefits administrator first.

How to Compare and Enroll on Medicare.gov

1. List your medications. Include each drug, the dose, how often you take it, and the pharmacies you use.
2. Use the Medicare.gov Plan Finder. Go to Medicare.gov/plan-compare, enter your ZIP code and drugs, and the tool estimates your total yearly cost for each plan, not just the premium.
3. Check pharmacy networks. Preferred pharmacies can lower your copays.
4. Enroll online or by phone. Enroll through the Plan Finder or call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day.
5. Compare again every fall. Formularies change each year, so check during the Annual Enrollment Period, October 15 to December 7.

For free, unbiased one-on-one help, Florida’s SHINE program (Serving Health Insurance Needs of Elders) offers Medicare counseling at 1-800-963-5337.

Adding Part D to a Medicare Supplement

Medicare Supplement plans don’t include drug coverage, so our Medigap clients add a stand-alone Part D plan through Medicare.gov. We don’t sell Part D plans ourselves, but we’re glad to help with the Medigap side at no cost to you.

Tell us what you’re looking for and the best time to reach you. We usually call back within one business day.

Prefer to talk now? Call (239) 633-4392.