What is Medicare Part D?
Medicare Part D is prescription drug coverage offered through private plans approved by Medicare. You can get it two ways: as a standalone Part D plan that works alongside Original Medicare, or built into a Medicare Advantage plan that includes drug coverage.
Formularies and costs
Every Part D plan has a formulary — a list of the drugs it covers, organized into cost tiers. Two plans can cover your medications very differently, so the plan that fits depends on the specific drugs you take. Plans have their own premiums, deductibles, and copays, and these can change each year.
The late-enrollment penalty
If you go 63 or more days without creditable drug coverage (coverage at least as good as standard Part D) after your initial enrollment window, you may owe a late-enrollment penalty added to your premium for as long as you have Part D. That is why many people enroll in at least a low-premium drug plan even if they do not take medications yet. To compare plans, use Medicare.gov's Plan Finder, call 1-800-MEDICARE, or get free help from your SHIP.
The coverage stages and the yearly cap
A Part D plan moves through stages over the year. You may first pay a deductible (if the plan has one), then move into the initial coverage stage where you pay copays or coinsurance for your drugs. The old “donut hole” coverage gap has been phased out, and a major change now caps what you pay: once your out-of-pocket spending on covered drugs reaches the annual limit ($2,000 in 2025, $2,100 in 2026), you pay $0 for covered drugs for the rest of the year.
If large or front-loaded drug costs are a concern, the Medicare Prescription Payment Plan lets you spread your yearly out-of-pocket prescription costs into smaller monthly payments instead of paying a lot at the pharmacy at once. It does not lower your total cost, but it can smooth out an expensive month. Ask your plan or pharmacist whether it makes sense for you.
How to choose a Part D plan
The plan that fits you depends on your specific medications. Start by listing your drugs and dosages, then check each plan's formulary to confirm your drugs are covered and on what tier. Compare the total expected yearly cost — premium plus deductible plus the copays for your drugs — rather than the premium alone, since a low-premium plan can cost more overall if your medications sit on higher tiers. Also check that your preferred pharmacy is in the plan's network, as costs can differ between preferred and standard pharmacies.
Medicare.gov's Plan Finder does this comparison for you when you enter your drug list. You can also get free, unbiased help from your State Health Insurance Assistance Program (SHIP), or have a licensed agent compare the Part D plans they represent against your medications at no cost to you.
Help paying for Part D
If prescription costs are a strain, you may qualify for Extra Help (the Part D Low-Income Subsidy), a federal program that lowers or eliminates Part D premiums, deductibles, and copays for people with limited income and resources. Many people who qualify never apply. It is free to apply through Social Security, and applying can also connect you to related programs that lower other Medicare costs.
Frequently asked questions
Do I need Part D if I don't take any medications?
Many people still enroll to avoid the late-enrollment penalty later. Going without creditable drug coverage for 63+ days after your initial window can add a lasting penalty to your premium.
Can I add Part D to any Medicare plan?
You can pair a standalone Part D plan with Original Medicare. Most Medicare Advantage plans already include drug coverage, so you usually do not add a separate Part D plan to them.
Is there still a coverage gap (the donut hole)?
No. The donut hole has been phased out. Part D now has an annual out-of-pocket cap — $2,000 in 2025 and $2,100 in 2026 — after which you pay $0 for covered drugs for the rest of the year.
What is the most I will pay for covered drugs in a year?
Your out-of-pocket spending on covered drugs is capped each year (for example, $2,100 in 2026). Once you reach the cap, you pay nothing more for covered drugs that year. The exact figure is set annually.
Related guides
This is general education, not personalized advice, and plan details change every year. For all of your options, contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program (SHIP) at shiphelp.org.