Most generic prescription drugs
Lowest co-payment.
2026 Medicare Plans
Original Medicare doesn’t cover most prescription drugs — that’s where a separate plan for prescription drug coverage (Part D) comes in.
This guide explains Medicare Part D prescription drug coverage: stand-alone plans and drug coverage included in a Medicare Advantage plan, how formularies and tiers affect what you pay, and when you can enroll or change plans.
Quick answer
Since 2006, Medicare Part D has helped beneficiaries cover the cost of prescription drugs, which are not insured through Original Medicare. Part D is offered via private companies as a stand-alone plan (PDP) for Original Medicare enrollees, or as a set of benefits included in a Medicare Advantage Plan. Each plan covers an extensive list of prescription drugs, called a formulary.
Many plans organize the prescription drugs they cover, both brand name and generic, into “tiers” to help lower costs. Each tier costs a different amount, with those in the lower tiers generally costing less. Each plan establishes its own premiums annually, so there is no standard monthly premium for Part D coverage, so it's important to review your prescription costs each year.
In most cases, even if you don’t currently take medications, enrolling in a plan could save you from paying a penalty for prescriptions later on. If you don’t sign up for a Part D plan when you’re first eligible for Medicare you may have to pay a “late enrollment penalty”. This amount increases every month that you don’t have Part D and can get expensive quickly. The good news is that low-cost plans are available. If you have Medicare Part A and/or Part B and lack other drug coverage, the increasing costs of prescription drugs makes it advisable to enroll in a Part D plan as soon as possible.
Medicare Part D has three coverage stages:
*Benefits vary by plan and service area. There may not be a plan in your area that includes all of these benefits.
Plan details
Below is a sample of the kind of tier levels that prescription drug plans use to establish cost levels:
Lowest co-payment.
Medium co-payment.
High co-payment.
High-cost prescription drugs, highest co-payment.
While a plan’s formulary may not include an exact medication you need, a similar alternative option is available in most cases. You can request an exception if you or your prescriber believe that none of the drugs on your plan’s formulary will work for you.
Benefits and considerations
Prescription drug costs can add up quickly. Enrolling in a Part D plan helps relieve the financial burden of out-of-pocket prescription drug expenses. This is particularly true for those who need specialty prescriptions or require multiple brand-name medicines (you may also be charged a late penalty if you have no creditable drug coverage).
Pharmaceutical companies take into consideration a drug’s effectiveness and uniqueness, as well as competition from other manufacturers when it comes to pricing. Research and development costs, which play a role in bringing new drugs to market, also factor into pricing.
*Benefits vary by plan and service area. There may not be a plan in your area that includes all of these benefits.
Benefits
All Part D plans must cover a wide range of prescription drugs, including those in certain “protected classes,” such as drugs that treat cancer or HIV/AIDS. Both brand-name and generic drugs are covered under Medicare Part D plans, though generics must include the same active ingredient as their brand-name versions and meet the same standards for quality, purity, and strength.
n 2026, no Medicare drug plan may have a deductible above $$615, and the annual Part D out-of-pocket threshold is $$2100. Some plans have no deductible.
Drug-plan premiums, formularies, deductibles, copays, and coinsurance vary. Review each plan’s formulary and pharmacy network before enrolling.
Each Medicare Part D prescription drug plan decides which drugs not to include in its formulary, though most exclude prescription drugs for things like weight loss or gain, fertility, sexual dysfunction, hair growth and over-the-counter medications.
Federal law typically precludes Medicare from covering certain kinds of drugs. Drugs used for the reasons below may be covered by Part D if prescribed to treat other conditions. Drugs used to treat psoriasis and rosacea may be covered under Medicare Part D.
Compare coverage paths
Medicare Advantage Prescription Drug plans (MA-PDs) combine Medicare Part A and Part B coverage with Part D prescription drug coverage. Depending on the plan and service area, an MA-PD may also offer one or more additional benefits, such as routine vision, dental, hearing, and/or fitness benefits.*
*Benefits vary by plan and service area. There may not be a plan in your area that includes all of these benefits.
Medigap policies purchased after 2006 do not include prescription drug coverage. If you have a Medigap plan that includes prescription coverage your insurer must remove that coverage if you enroll in a Part D plan. It’s important to bear in mind that most Medigap drug coverage is not considered creditable, so it may benefit you to join a Part D plan.
| Area of comparison | Stand-alone Part D (PDP) | Medicare Advantage (MA-PD) |
|---|---|---|
| How you get drug coverage | A stand-alone plan for people with Original Medicare. | Combines Medicare Part A and Part B with Part D prescription drug coverage. |
| Other benefits | Covers prescription drugs. It does not add the medical benefits of a Medicare Advantage plan. | Depending on the plan and service area, may also offer routine vision, dental, hearing, and/or fitness benefits.* |
| Medigap drug coverage | Medigap policies purchased after 2006 do not include prescription drug coverage. If a Medigap plan includes drug coverage, the insurer must remove it when you enroll in Part D. | Drug coverage is included as Part D. The Medigap drug-coverage rule above applies when you enroll in a Part D plan. |
| Creditable coverage | Most Medigap drug coverage is not considered creditable, so it may benefit you to join a Part D plan. | An MA-PD includes Medicare Part D prescription drug coverage. |
Decision support
You can enroll in Part D when you first become eligible for Medicare. A late-enrollment penalty may apply if you go 63 or more consecutive days without Part D or other creditable prescription drug coverage after your Initial Enrollment Period.
You may also join, switch, or drop Part D coverage during the Medicare Annual Enrollment Period (Oct. 15–Dec. 7) or during a Special Enrollment Period if you qualify.
Initial Enrollment Period
Your Medicare Part D Initial Enrollment Period is generally a seven-month window that starts three months before the month you turn 65, includes your birthday month, and ends three months afterward. If your birthday is on the first day of a month, Medicare treats you as reaching age 65 in the prior month, so the window starts and ends one month earlier.
Annual Enrollment Period
You may join, switch, or drop Medicare drug coverage from Oct. 15–Dec. 7. Coverage selected during this period generally begins Jan. 1.
Medicare Advantage Open Enrollment Period
If you are already enrolled in Medicare Advantage, you may switch to a different Medicare Advantage plan or return to Original Medicare from Jan. 1–Mar. 31. If you return to Original Medicare, you may also enroll in a standalone Part D prescription drug plan. You may make only one plan change during this period.
Special Enrollment Periods
You may qualify to change prescription drug coverage after certain events, such as losing other creditable coverage or moving outside your plan’s service area.
The same windows apply. These rules are the ones that are easy to miss:
A Part D late-enrollment penalty may apply if, after your Initial Enrollment Period, you go 63 or more consecutive days without Part D or other creditable prescription drug coverage. The monthly penalty is generally calculated by multiplying 1% of the national base beneficiary premium by the number of full uncovered months, then rounding to the nearest $0.10.
The national base beneficiary premium is $38.99 in 2027. This is used to calculate the penalty and is not necessarily the premium a plan charges. The base amount may change each year, and the penalty generally continues for as long as you have Medicare drug coverage.
A licensed insurance agent can help you compare prescription drug coverage options based on your medications, preferred pharmacies, coverage needs, and budget. SmartMatch represents a range of plans, but does not offer every plan available in every area.
Common questions
Medicare Part D has three coverage stages:
Many prescription drug plans determine patient costs by assigning drugs to one of four tiers, based on:
Federal law typically precludes Medicare from covering certain kinds of drugs, including:
NOTE: Drugs used for the reasons given above may be covered by Part D if prescribed to treat other conditions.
You may join, switch, or drop Part D coverage during the Medicare Annual Enrollment Period from Oct. 15–Dec. 7. You may also enroll during your Initial Enrollment Period or a Special Enrollment Period if you qualify.
If you are already enrolled in Medicare Advantage, you may switch to a different Medicare Advantage plan or return to Original Medicare from Jan. 1–Mar. 31. If you return to Original Medicare, you may also enroll in a standalone Part D prescription drug plan. You may make only one plan change during this period.
According to Medicare.gov, there are three ways to avoid paying the Part D late enrollment penalty. You can:
One option is to determine whether the medication you need is covered by Medicare under a different Part A or B. If not, you may request a formulary exception from a doctor and/or your plan. If it’s determined the drug is necessary to your health, you’ll need a written statement to that effect from a doctor or other healthcare provider.
If you are unhappy with your Medicare Part D or Medicare Advantage prescription drug plan, you can file a grievance, a formal complaint submitted to your plan. Such a complaint may be filed due to a coverage denial, customer service problem, or difficulty understanding written instructional materials.
An enrollee can file a grievance orally or in writing to your plan. Each must be filed no later than 60 days after the incident/event that caused the complaint.
Understanding Medicare prescription drug coverage can be complex. A licensed insurance agent can help you review your medications, preferred pharmacies, and available plan options so you can make a coverage decision based on your needs.
Practical Medicare guidance to help you compare coverage with confidence.
SmartMatch has a dedicated team of licensed insurance agents ready to assist you.
This is a solicitation for insurance. Not connected with or endorsed by the U.S. government or the federal Medicare program. SmartMatch Insurance Agency and its divisions are licensed to sell insurance products in all 50 states and DC. Callers will be connected with a licensed insurance agent who can enroll you into a Medicare Advantage, Prescription Drug (Part D) and Medicare Supplement insurance plan.
We do not offer every plan available in your area. Currently we represent 9 organizations which offer 3,239 products in your area. Please contact Medicare.gov, 1-800-MEDICARE (24 hours a day/7 days a week), or your local State Health Insurance Program to get information on all of your options. The plans we represent do not discriminate on the basis of race, color, national origin, age, disability, or sex. Not all plans offer all benefits. Benefits may vary by carrier and location. Limitations and exclusions apply. No obligation to enroll. SmartMatch Insurance Agency represents Medicare Advantage HMO, HMO SNP, PPO, PPO SNP, and PDP organizations that have a Medicare contract. Enrollment in any plan depends on contract renewal.
PLEASE NOTE: Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal Disease (ESRD). Enrollment in a plan may be limited to certain times of the year unless you qualify for a Special Enrollment Period or you are in your Medicare Initial Enrollment Period.
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