Comparing Medicare Part D Drug Plans

What Medicare Part D Covers

Medicare Part D is the prescription drug benefit offered through Medicare. It is available either as a stand-alone Prescription Drug Plan (PDP) � paired with Original Medicare � or bundled into a Medicare Advantage Prescription Drug plan (MA-PD).

Part D plans are run by private insurance companies approved by Medicare. Each plan maintains its own list of covered drugs, sets its own premiums and cost-sharing amounts, and may have different pharmacy networks. Coverage broadly includes:

• Brand-name and generic prescription drugs
• Certain vaccines not covered under Part B (such as the shingles vaccine)
• Insulin and some other diabetic supplies (depending on the plan)
• Drugs dispensed at retail pharmacies and, in many plans, through mail-order

Part D does not cover most over-the-counter drugs, drugs used for weight loss or fertility, drugs covered under Medicare Part A or Part B, or drugs that are not on the plan's formulary unless you obtain an exception.

How Formularies and Drug Tiers Work

A formulary is the official list of prescription drugs covered by a specific Part D plan. Plans organize their formularies into tiers, with each tier carrying a different cost-sharing level. The more tiers a plan has, the more granular the pricing can be. A typical five-tier structure looks like this:

Plans can also apply coverage rules such as prior authorization (the plan must approve the drug before covering it), quantity limits (limits on how much of a drug is covered per fill), and step therapy (requiring you to try a lower-cost drug first). If your drug is subject to these restrictions, your doctor can submit an exception request on your behalf.

How to Compare Plans: Premium vs. Total Out-of-Pocket Costs

A common mistake is choosing the plan with the lowest monthly premium without considering total annual costs. The plan with the $10 monthly premium may charge far more per prescription than a plan with a $40 monthly premium � leaving you paying more overall.

When comparing plans, look at all of these cost components together:

The most reliable way to compare plans is to use the Medicare Plan Finder tool at Medicare.gov. Enter your specific drugs, dosages, and preferred pharmacy to get a personalized estimate of annual costs across every available plan in your area. Focus on the estimated annual drug cost column, not just the premium column.

Why You Must Check Your Specific Drugs Every Year

Part D plans are not locked in permanently. Every year, insurance companies can and do make significant changes to their formularies, tier placements, premiums, and pharmacy networks � and those changes take effect on January 1. A drug that was on Tier 2 this year may move to Tier 4 next year, dramatically increasing what you pay.

Each fall, your plan is required to mail you an Annual Notice of Change (ANOC). Read it carefully. Look for:

• Any of your current drugs being removed from the formulary
• Drugs moving to a higher (more expensive) tier
• New prior authorization or step therapy requirements added to your drugs
• Changes to your preferred pharmacy network
• Premium or deductible increases

Even if nothing in the letter looks alarming, it is worth re-running your drug list through Medicare Plan Finder during the Annual Enrollment Period to confirm your current plan is still the best fit. A better option may now exist that was not available when you last enrolled.

This annual review is especially important for people taking specialty medications, brand-name drugs without a generic equivalent, or multiple prescriptions across different drug classes.

Extra Help and the Low Income Subsidy (LIS)

If your income and resources are limited, you may qualify for a federal program called Extra Help (also known as the Low Income Subsidy, or LIS). Extra Help pays most of your Part D costs, including premiums, deductibles, and copays.

In 2025, individuals with annual income below roughly $22,590 (or couples below $30,660) and limited assets may qualify. Eligibility thresholds are updated each year. People who receive Medicaid, Supplemental Security Income (SSI), or who are enrolled in a Medicare Savings Program are automatically eligible for Extra Help.

You can apply for Extra Help through the Social Security Administration at SSA.gov, by calling 1-800-772-1213, or at your local Social Security office. Your State Pharmaceutical Assistance Program (SPAP) may offer additional savings on top of Extra Help depending on where you live.

When You Can Change Part D Plans

You cannot change your Part D plan at any time during the year. Changes are generally limited to specific enrollment windows:

Outside of AEP, you may be able to change plans if you qualify for a Special Enrollment Period (SEP). Common SEP triggers include:

• Qualifying for or losing Extra Help / Low Income Subsidy
• Moving to a new address outside your plan's service area
• Losing other creditable drug coverage
• Your plan leaving Medicare or losing its contract
• First becoming eligible for Medicare (Initial Enrollment Period)

If you miss AEP and do not have a qualifying SEP, you generally must wait until the following AEP to make changes. For this reason, it is important not to let the October 15 deadline pass without reviewing your coverage.

How a Medicare Agent Can Help with Part D Decisions

Comparing dozens of Part D plans across formularies, pharmacy networks, and cost structures is genuinely complex � and the stakes are real. A licensed Medicare agent can simplify this process considerably.

An independent Medicare agent works with multiple carriers and has no financial incentive to steer you toward a specific plan. They can:

• Run a side-by-side comparison using your actual drug list, dosages, and preferred pharmacy
• Identify plans that cover all or most of your medications at the lowest tiers
• Explain formulary restrictions and whether your drugs require prior authorization
• Check whether your preferred pharmacy is in-network � or identify a comparable alternative
• Help you apply for Extra Help if you may qualify
• Alert you to changes in your current plan before AEP begins so you are not caught off guard
• Handle enrollment paperwork and follow up with the plan on your behalf

There is no extra cost to work with a licensed agent � agents are compensated by the insurance carriers, not by you. Working with a knowledgeable local agent is one of the most effective ways to ensure your Part D plan is actually aligned with your prescriptions and budget, year after year.