Part D is Medicare's prescription drug coverage. It's offered by private plans approved by Medicare, and it's the part where plan details make the biggest difference to what you pay.
Two ways to get it
- A stand-alone drug plan, alongside Original Medicare.
- Built into a Medicare Advantage plan, which most Advantage plans include.
Drug lists and tiers
Every plan has a formulary — its list of covered drugs. The list sorts drugs into tiers, and the tier decides your share of the cost. Lower tiers, often generics, usually cost less.
Plans can also attach rules to a drug: prior authorization (the plan must approve it first), step therapy (try a lower-cost drug first) or quantity limits.
Drug lists change every year. A drug can move tiers, pick up a new rule, or leave the list on January 1. Checking your own prescriptions against next year's list is the single most useful thing you can do each fall.
The yearly out-of-pocket cap
Since 2025, Part D has a yearly cap on what you pay out of pocket for covered drugs. Once you reach it, you pay nothing more for covered drugs for the rest of the year. There's also an option to spread your out-of-pocket drug costs across the year in monthly payments, instead of paying at the pharmacy counter.
Avoiding the late enrollment penalty
If you go 63 days or more in a row without Part D or other creditable drug coverage after you're first eligible, a penalty can be added to your premium for as long as you have Part D. Coverage from an employer or union often counts as creditable — the plan should tell you in writing each year.
Help with costs
Extra Help is a federal program that helps people with limited income and resources pay Part D premiums, deductibles and copays. You can apply through Social Security.
The Medicare cheat sheet
Parts A, B, C and D on a single page, plus the dates that matter this fall. The email version is coming soon.