Common Mistakes When Choosing Plan D

Each fall, the same handful of mistakes cost people with Medicare money they did not need to spend. Here they are, with how to avoid each one.

The monthly premium is the easiest number to see and the least reliable guide to what you will pay. A plan with a $0 or very low premium can have a full $700 deductible, put your drugs on higher tiers, or charge more at your pharmacy. Over a year, those costs can easily outweigh a few dollars of premium savings. Medicare Plan Finder’s “lowest drug + premium cost” sort exists precisely to prevent this mistake.

People often enter the drugs they take every day and forget the ones they fill occasionally: an inhaler, an antibiotic they need every winter, eye drops or a drug their doctor plans to start next year. Because formularies and tiers differ so much, one missing drug can change which plan is cheapest. Pull your list from your pharmacy or your Medicare.gov account rather than from memory.

Most Part D plans split their network into preferred and standard pharmacies. The same drug can cost far more at a standard pharmacy, even though both are “in network.” Enter the pharmacy you actually use, and compare a mail-order option for maintenance drugs, which is often the lowest-cost way to fill long-term prescriptions.

A drug can be on the formulary and still come with prior authorization, step therapy or quantity limits. Those rules can delay a refill in January while paperwork is sorted out. Before you enroll, check each of your drugs for these rules, and if one applies, ask your doctor to start the approval process early.

Tiers decide what you pay. The same brand-name drug might be a preferred brand on Tier 3 in one plan and a non-preferred drug on Tier 4 in another, with a very different copay or coinsurance. For expensive drugs, the tier can matter more than anything else on the page.

Your plan renews automatically, but that does not mean it stays the same. Every year, plans can change premiums, deductibles, formularies, tiers and pharmacy networks. For 2027, the maximum deductible rises to $700 and the Premium Stabilization Demonstration ends, so standalone plans are repricing. Read your Annual Notice of Change and compare, even if you were happy in 2026.

If you go 63 days or more without Part D or other creditable drug coverage after you first become eligible, Medicare adds a penalty to your premium for as long as you have Part D: 1% of the national base beneficiary premium, $41.33 for 2027, for each month you went without. Even if you take no drugs today, a low-cost plan protects you from a penalty that never goes away.

Extra Help can lower Part D premiums, deductibles and copays dramatically for people with limited income and resources, and everyone in a Medicare Savings Program qualifies automatically. Many eligible people never apply. If money is tight, check eligibility through Social Security or your state Medicaid office.

See Part D drug tiers explained.

You can also spread your out-of-pocket drug costs into monthly payments through the Medicare Prescription Payment Plan. See the Part D late enrollment penalty explained.

Sometimes a drug you take is not on a plan’s 2027 formulary, or it carries a rule like prior authorization. You still have options:

See steps to appeal a Medicare Part D denial.

If your income and savings are limited, two programs can cut your Medicare costs sharply:

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.

Plans must send the Annual Notice of Change by September 30. It is the single most useful document you get each fall, because it tells you exactly how your plan changes on January 1.

Outside the fall and early-year windows, you generally need a Special Enrollment Period to change plans. Common reasons include:

Each Special Enrollment Period has its own time limit, so act as soon as the event happens.

Each Part D plan submits a bid to CMS. CMS uses the bids to set the national average monthly bid amount, $296.05 for 2027, and the base beneficiary premium, $41.33 for 2027. The base premium is used to calculate the late penalty and subsidies; your actual premium depends on your plan and region. Federal law limits base premium growth to 6% a year through 2029.

A basic plan covers at least Medicare’s standard benefit. An enhanced plan adds coverage, such as a lower deductible or lower copays, usually for a higher premium. For 2027, CMS says 88% of non-low-income beneficiaries can get a basic plan for $10.30 a month or less, and 93% can get an enhanced plan for less than $6.

If you turn 65 in 2027, your Initial Enrollment Period lasts seven months: the three months before your birthday month, your birthday month and the three months after. Signing up during the first three months means your coverage starts on the first day of your birthday month.

If your plan denies a service, a drug or payment for care, you have the right to appeal. The plan’s denial notice explains how. There are several levels of appeal, starting with the plan and moving to independent reviewers.

For problems that are not about coverage, such as customer service or wait times, you can file a grievance with the plan. You can also contact 1-800-MEDICARE or your State Health Insurance Assistance Program for help.

If you miss the Annual Enrollment deadline, your current plan renews automatically for 2027, with the changes in your Annual Notice of Change. If you are in Medicare Advantage, you get one more chance from January 1 to March 31, 2027, to switch Medicare Advantage plans or return to Original Medicare and join a Part D plan.

The same mistakes apply to the drug portion of Medicare Advantage plans. If you are comparing Medicare Advantage plans, run your drug list through each one, because a plan that looks great for medical care can be expensive for your prescriptions.

Where you fill prescriptions can change your yearly cost as much as which plan you choose. Most plans divide their network into preferred and standard pharmacies. Preferred pharmacies have lower negotiated prices and often lower copays; standard pharmacies are still in network but usually cost more. Out-of-network pharmacies are generally not covered except in limited situations.

If you take maintenance drugs for blood pressure, cholesterol, diabetes or thyroid, compare a 90-day mail-order fill in the plan finder. For many people it is the single easiest way to cut costs.

If big drug costs hit early in the year, the Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments across the year instead of paying at the pharmacy counter. It is available with every Part D plan and Medicare Advantage plan with drug coverage, and it does not change the total you owe.

The Part B premium is the one big number not released with the plans. CMS normally announces it in November. The 2026 Medicare Trustees Report projects a 2027 standard premium of about $209.50 a month and a deductible of about $292, up from $202.90 and $283 in 2026. You keep paying it with Medicare Advantage.

Medicare rates every Medicare Advantage and Part D plan from 1 to 5 stars each fall, based on things like preventive care, how well the plan manages chronic conditions, member complaints, customer service and drug pricing accuracy. The ratings are shown in Medicare Plan Finder.

Tier structures vary by plan. Check each plan’s formulary.