Medicare Part D

Part D, with the 2026 figures.

Medicare Part D is prescription drug coverage, sold either as a standalone plan you pair with Original Medicare or built into a Medicare Advantage plan. As of 2026, every Part D plan caps your annual out-of-pocket spending on covered drugs at $2,000 — the first time Medicare has had any drug-cost cap. Each plan has its own formulary (list of covered drugs), pharmacy network, and tier structure, so the right Part D plan depends on your specific medication list.

What Part D is

Part D is the prescription drug benefit of Medicare. It's run by private insurance companies that contract with Medicare. You can get Part D two ways:

• Standalone Part D plan (PDP) — added to Original Medicare. You pay a separate monthly premium.
• Medicare Advantage plan with drug coverage (Medicare Advantage with Part D (MAPD)) — bundled into an MA plan. Drug coverage is built in.

The new $2,100 cap

The three stages (2026)

The new Medicare Prescription Payment Plan (M3P)

Available since 2025: you can opt into a payment plan that spreads your annual drug costs evenly across the year instead of paying large amounts in any single month. So instead of paying $1,200 in January and $0 in November, you'd pay roughly $167/month each month.



The total you pay is the same. But for people on expensive drugs early in the year, M3P can prevent a painful January cost shock. Sign up directly with your Part D plan.

How to choose a Part D plan

This is one area where the right plan really does depend entirely on you. Two people on the same prescriptions can have wildly different "best plans" depending on which pharmacies they use and which formulary tiers their drugs fall into.

The way we approach it:



1. Make a list of every prescription you take—name, dose, and how often.
2. List your preferred pharmacies—chain or independent. Some plans have "preferred" pharmacies with much lower copays.
3. We run your drug list against every Part D plan available in your zip code through Centers for Medicare & Medicaid Services (CMS)'s Plan Finder.
4. We compare estimated annual cost—premium + deductible + copays for your specific drugs. Not the headline premium, the all-in number.
5. We re-check every year during Annual Enrollment Period (AEP) (Oct 15–Dec 7), because formularies change, pricing changes, and what was best last year may not be best this year.

Common questions

Do I need Part D?

If you don't have other "creditable" prescription drug coverage (like from an employer or VA), you should generally enroll in Part D as soon as you're eligible—even if you take no medications today. Skipping it leads to a Late Enrollment Penalty added to your premium for as long as you have Part D, calculated at 1% of the national base beneficiary premium for each month you went without coverage.

What if I have prescription coverage from my employer or VA?

That coverage may count as "creditable"—meaning equivalent to Part D—and lets you delay enrolling without penalty. Check with your benefits administrator. Read more about Part D and other coverage →

What's a formulary?

The list of drugs your plan covers, organized into tiers. Generic drugs are usually Tier 1 (lowest copays). Specialty drugs are usually Tier 4 or 5 (highest). The same drug can be on different tiers in different plans, which is why drug-by-drug comparison matters.

Can my plan change in the middle of the year?

Generally no, with a few exceptions: drugs can be removed for safety reasons, generics can be added, and prior authorization rules can change. Plans must give 30 days' notice for most material changes affecting current users.

More Part D resources

• Detailed walkthrough of the IRA Part D changes
• Part D + employer / VA / TRICARE coverage
• Back to Medicare 101 hub

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