Medicare Part D

Part D was created in 2006 to give people with Medicare access to prescription drug coverage. It is voluntary, but most people should have it or other creditable coverage from the time they are first eligible.

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.

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

Plans can require prior authorization, step therapy or quantity limits. If your doctor believes you need a drug that is restricted or not covered, you can request an exception.

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.

Most people make changes during Annual Enrollment. If you are happy with your current plan, you do not have to do anything; it renews automatically. Still, read your Annual Notice of Change, because premiums, copays, networks and drug lists can all change on January 1. You first become eligible for Part D during your Initial Enrollment Period around your 65th birthday.

The penalty is permanent: it is added to your premium for as long as you have Part D. The simplest way to avoid it is to join a plan when you are first eligible, even a low-cost plan if you take few drugs today.

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.

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.

A basic plan covers at least Medicare’s standard benefit; an enhanced plan adds coverage such as a lower deductible, 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. See standard vs enhanced Part D plans.

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.

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.

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.

Because Medigap plans sold today do not cover prescriptions, you should also have a Part D plan. It does not have to come from your Medigap company. Choose it by your drugs and pharmacy in Medicare Plan Finder, and review it every fall. If you delay drug coverage without other creditable coverage, the late penalty adds 1% of the national base beneficiary premium, $41.33 for 2027, for every month you went without.

You do not have to compare plans alone, and you should not have to pay for help. These are the free options:

Before any call, have your Medicare card, your list of drugs and doses, your doctors and your preferred pharmacies ready. It turns a long conversation into a short one.