Medicare Part D

Reviewed by Russell Noga, a Licensed Medicare Insurance Broker in all 50 states — Updated October 8, 2026

Medicare Part D is Medicare’s prescription drug coverage, sold by private insurers as standalone plans or as part of Medicare Advantage plans. For 2027, the maximum deductible is $700 and out-of-pocket costs are capped at $2,400.

Part D is optional, but if you go without it or other creditable coverage you may owe a lifelong late enrollment penalty. Every plan has its own drug list, tiers and pharmacy network.

See the 2027 Part D plan finder.

✔ Licensed agents in all 50 states
✔ Built on CMS 2027 data
✔ Compare plans for free

Key Highlights

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Part D covers prescription drugs.

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2027 deductible up to $700; cap $2,400.

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Average standalone premium about $36.

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Late penalty if you delay without creditable coverage.

Compare plans and enroll online

How Part D Works

Every Part D plan moves through three stages during the year, and the stage you are in decides what you pay at the pharmacy counter.

The Three Payment Stages

1

Deductible. You pay the full negotiated price until you meet your plan’s deductible, which can be up to $700 in 2027. Many plans charge less or waive it on lower tiers.

2

Initial coverage. You pay a copay or coinsurance set by each drug’s tier, and the plan pays the rest.

3

Catastrophic coverage. Once your out-of-pocket spending reaches $2,400, covered Part D drugs cost $0 for the rest of 2027.

$700

Maximum 2027 Part D deductible, up from $615.

$2,400

2027 Part D out-of-pocket cap, up from $2,100.

About $36

Average standalone Part D premium for 2027, rising by under $1 (CMS).

$7

Expected average drug portion of a 2027 Medicare Advantage premium, lower than $11.32.

What Part D Covers

Every Part D plan must cover a wide range of drugs in commonly prescribed categories and all or substantially all drugs in six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants for transplants, cancer drugs and HIV/AIDS drugs. Covered insulin costs no more than $35 for a month’s supply, and CDC-recommended adult vaccines covered under Part D cost $0.

Each plan has its own formulary and can change it within Medicare rules, so confirm every drug you take.

How to Get Prescription Coverage Medicare Part D

2027 Changes

Part D Item 2026 2027
Maximum deductible $615 $700
Out-of-pocket cap $2,100 $2,400
Average standalone premium $35.09 About $36
Base beneficiary premium – $41.33
Premium Stabilization Demonstration In place Ended

Source: CMS 2027 Part D figures, July and September 2026.

Find & Compare Plans Online

Speak with a licensed insurance agent

1-877-436-2343TTY 711

Mon-Fri: 8am-9pm ET

Drug Tiers and Rules

Tier Typical Drugs Typical Cost
Tier 1 Preferred generics Lowest copay
Tier 2 Generics Low copay
Tier 3 Preferred brand-name drugs Moderate copay
Tier 4 Non-preferred drugs Higher copay or coinsurance
Tier 5 Specialty drugs Highest coinsurance

Each plan sets its own tiers. Review every plan’s formulary.

Pharmacies

Your pharmacy choice can affect your yearly cost as much as your plan choice does. Most plans split their network into standard and preferred pharmacies. Preferred ones offer lower negotiated prices and often lower copays, while standard pharmacies are in network but usually cost more. Except in limited situations, out-of-network pharmacies are generally not covered.

Retail Pharmacy

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Pick up the same day

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Pharmacist on hand for questions

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Preferred retail pharmacies keep copays low

Mail Order

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90-day supplies of maintenance drugs

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Often the lowest copay for long-term medicines

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Delivered to your home

Taking maintenance drugs for diabetes, thyroid, cholesterol or blood pressure? Use the plan finder to compare a 90-day mail-order fill. For many people, nothing cuts costs more easily.

Choosing the Right Medicare Part C Plan

Standalone Part D vs Medicare Advantage

Standalone Part D Plan

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Pairs with Original Medicare, by itself or alongside Medigap

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Average about $36 a month for 2027

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Choose any plan offered in your region

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Medical care stays with Original Medicare

Medicare Advantage With Drugs

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Drug coverage built into your health plan

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Drug portion averages about $7 a month for 2027

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One card and one plan for medical and drugs

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Medical care generally comes through the plan’s network

When to Enroll

You can first join Part D during your Initial Enrollment Period around your 65th birthday. After that, you can change plans each year during Annual Enrollment, October 15 to December 7, or during a Special Enrollment Period.

Late enrollment penalty: once your Initial Enrollment Period is over, going 63 days or more in a row with no Part D or other creditable drug coverage means Medicare adds 1% of the national base beneficiary premium for every full month without it. With the 2027 base beneficiary premium at $41.33, each uncovered month adds about $0.41 a month, and that lasts as long as you have Part D.

Help Paying

Extra Help: people with limited income and resources may qualify for Extra Help, which lowers Part D premiums, deductibles and copays. People enrolled in a Medicare Savings Program automatically qualify. See Extra Help and prescription assistance programs.

When large drug costs come early in the year, the Medicare Prescription Payment Plan lets you pay your out-of-pocket drug costs in monthly installments over the year rather than all at the pharmacy counter. Every Part D plan and every Medicare Advantage plan with drug coverage offers it, and your total amount owed stays the same.

How to Choose

How to Pick a Plan

1

Write down every prescription. Include the strength, dose and how often you fill it.

2

Enter them in Medicare Plan Finder. Add your usual pharmacies and mail order.

3

Sort by estimated total cost. Premium plus drug costs for the full year.

4

Check tiers and rules on your drugs. Prior authorization, step therapy and quantity limits.

5

Confirm your pharmacy is preferred. Preferred pharmacies usually mean lower copays.

6

Enroll by December 7, 2026. Coverage starts January 1, 2027.

If a Drug Is Not Covered

A drug you take might be missing from a plan’s 2027 formulary, or come with a rule such as prior authorization. Options remain:

If Your Drug Is Not Covered

1

Request a transition fill. During the first 90 days of a new plan or new plan year, plans generally have to provide a temporary supply of a drug you already take, giving you time to change drugs or ask for an exception.

2

Talk with your doctor about other options. A covered drug from the same class could work just as well for less.

3

Ask for a formulary or tiering exception. A statement from your doctor explains why you need the drug or a lower copay. The plan has to decide within set time limits.

4

Challenge a denial. When the plan turns you down, an appeal is available, with multiple levels of review.

See steps to appeal a Medicare Part D denial.

Help Paying for Drugs

Two programs can greatly lower Medicare costs for people with limited income and savings:

Medicare Savings Programs

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Run by your state Medicaid office

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May cover your Part B premium, and in some cases deductibles and coinsurance

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Income and asset limits vary by state

Extra Help (Part D)

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Run by Social Security

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Lowers Part D premiums, deductibles and copays

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Automatic eligibility for Medicare Savings Program members

If you qualify for both Medicare and full Medicaid, you may also be able to join a Dual Special Needs Plan. See help for low-income Part D beneficiaries.

Reading Your Annual Notice of Change

Check Every Line

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Your 2027 premium and deductible

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Copays for hospital stays, doctors and specialists

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The out-of-pocket maximum

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Updates to your drug list, tiers and coverage rules

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Whether your pharmacy, hospitals and doctors remain in network

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Updates to dental, vision, hearing and other extra benefits

By September 30, plans have to send the Annual Notice of Change. Because it spells out exactly how your plan changes on January 1, it is the most useful document you receive each fall.

Special Enrollment Periods

Changing plans outside the fall and early-year windows generally requires a Special Enrollment Period. Typical reasons include:

You May Qualify If

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Your plan is leaving your area or ending

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You move outside your plan’s service area

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You lose employer or union coverage

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Your Medicaid status changes, or you become eligible for Extra Help or a Medicare Savings Program

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You want to join a 5-star plan, once a year

Every Special Enrollment Period has its own deadline, so move quickly once the event occurs.

Common Part D Mistakes

Avoid These

1

Picking by premium alone. What counts is your full cost for the year.

2

Omitting drugs from your list. One missing drug can flip which plan wins.

3

Overlooking pharmacy status. Using a standard pharmacy can be far more expensive.

4

Letting your plan renew without a review. Every January, formularies and tiers change.

5

Waiting without creditable coverage. You pay the penalty for as long as you have Part D.