Medicare Part D helps pay for covered prescription drugs. It is optional coverage offered by private companies approved by Medicare. You can get Part D through a standalone prescription drug plan or through a Medicare Advantage plan that includes drug coverage.
Who can get Part D?
You need Medicare Part A and/or Part B to join a separate Medicare drug plan. A Medicare Advantage plan generally requires both Part A and Part B. If you have Medicare Advantage with drug coverage, you generally cannot add a separate standalone Part D plan.
A Medigap policy does not include prescription drug coverage. If you have Original Medicare and Medigap, a standalone Part D plan is the usual way to add Medicare drug coverage.
What does Part D cover?
Every plan has a formulary, or list of covered drugs. Formularies can include generic, brand-name, and specialty medicines, but the specific drugs, tiers, pharmacies, utilization rules, and costs differ by plan. A plan may require prior authorization, step therapy, or quantity limits for some prescriptions.
Before enrolling, use Medicare Plan Compare to check your current drugs, pharmacies, estimated costs, and coverage rules. Ask your prescriber whether an equivalent covered medicine may be appropriate, but do not change a prescription without medical guidance.
What does Part D cost?
Your costs depend on the plan and your income. Possible costs include:
- A monthly plan premium
- A deductible, if the plan has one
- Copayments or coinsurance for covered drugs
- A high-income adjustment, if Medicare determines it applies
- A late enrollment penalty, if you went at least 63 days in a row without Part D or other creditable prescription drug coverage after your Initial Enrollment Period
For 2026, no Medicare drug plan may charge a deductible above $615. A plan may charge less or have no deductible. Medicare’s Part D cost page lists the current federal amounts. CMS has also published 2027 policy and benefit-parameter materials, including a $700 defined-standard-benefit deductible and a $2,400 annual out-of-pocket threshold for 2027. These are federal benefit parameters, not a promise about any particular plan’s premium, formulary, or total costs. Recheck Medicare.gov before publication for the applicable plan year.
The 2026 Part D coverage stages
Medicare drug plans and Medicare Advantage plans with drug coverage generally have three stages in 2026:
- Deductible stage: If your plan has a deductible, you pay covered drug costs until you meet it.
- Initial coverage stage: After the deductible, you generally pay 25% of the cost of covered generic and brand-name drugs until your out-of-pocket spending reaches $2,100 in 2026. Some payments made on your behalf, including certain Extra Help payments, can count toward the limit.
- Catastrophic coverage: After you reach the yearly out-of-pocket threshold, you pay $0 for covered Part D drugs for the rest of the calendar year.
Your plan sends an Explanation of Benefits after pharmacy claims are processed. Keep it so you can track what you have paid, your coverage stage, and which costs count toward the limit.
The late enrollment penalty
You may owe a Part D late enrollment penalty if, after your Initial Enrollment Period ends, you go 63 or more consecutive days without Part D or other creditable prescription drug coverage. The penalty is generally permanent while you have Medicare drug coverage.
For 2026, Medicare calculates the penalty using 1% of the national base beneficiary premium of $38.99 for each full uncovered month. The amount is rounded to the nearest $0.10 and added to your monthly premium. You generally do not pay this penalty if you qualify for Extra Help.
Employer or union drug coverage can be creditable. Keep notices from the coverage provider and ask the benefits administrator before dropping that coverage.
Extra Help with drug costs
Extra Help can lower Part D premiums, deductibles, and cost-sharing for people who qualify. You may qualify automatically through Medicaid, a Medicare Savings Program, or Supplemental Security Income, or you may apply through Social Security. Learn more at Medicare’s Extra Help page.
Before you act
Check your medications, pharmacies, formularies, and estimated yearly costs in Medicare Plan Compare. If you need individualized help, contact Medicare, SHIP, your plan, or a licensed professional before enrolling.
Suggested internal links
- Suggested: Medicare Advantage Plans in Texas
- Suggested: Medigap Plan G
- Suggested: Does Medicare Cover Dental?