Start with your current medications and their costs

The single most useful thing you can do before comparing plans is write down every prescription you take — the drug name, the dose, and how often you fill it. Then check what each drug costs under different plans. This takes an hour but saves you hundreds of dollars a year, because Part D plans vary wildly in what they charge for the same medication.

You can look up drug prices on Medicare.gov's Plan Finder tool without logging in. Enter your zip code, the drugs you take, and the tool shows you which plans cover each one and what you will pay out of pocket. Some plans charge $5 a month for a common blood pressure drug; others charge $50. The difference is real and it is the main reason to compare at all.

If a drug you need is not on a plan's formulary — the list of drugs it covers — that plan is probably not for you, even if the premium is low. Some plans will cover a drug only if you try a cheaper alternative first, a process called prior authorization. If you have tried that cheaper drug and it did not work, you can ask the plan to cover your original drug anyway, but this takes time and paperwork.

Key Takeaways

  • Write down all your current prescriptions and check their costs on Medicare.gov's Plan Finder before comparing plans, because drug prices vary more than premiums do.
  • A plan's formulary — the list of drugs it covers — matters more than the monthly premium if you take expensive medications regularly.
  • Plans with low premiums often have higher copays or coinsurance, so compare your total out-of-pocket cost across the whole year, not just the monthly fee.
  • Your pharmacy matters: some plans charge different prices at different pharmacies, so check the cost at the pharmacy you actually use.
  • You can switch plans once a year during the Annual Enrollment Period in October and November, so you are not locked in if your needs change.

Understand the cost structure: premium, deductible, and coverage gaps

Every Part D plan charges a monthly premium, but that is only one of four costs you will pay. You also pay a deductible before the plan starts paying anything, copays or coinsurance for each prescription, and potentially more money in the coverage gap — a range of drug costs where you pay a larger share.

A plan with a $0 premium might have a $500 deductible and high copays. A plan with a $50 premium might have no deductible and lower copays. The cheapest monthly fee is not the cheapest plan overall. Use the Plan Finder to see your total estimated cost for the year under each plan, not just the premium. This number accounts for your deductible, copays, and the coverage gap, so it is the real comparison.

The coverage gap — sometimes called the "donut hole" — is a range where you pay a larger percentage of drug costs. For 2024, once you and your plan have spent $5,850 on covered drugs, you enter the gap and pay 25 percent of the cost of brand-name drugs and generics until your out-of-pocket spending reaches $7,050. After that, catastrophic coverage kicks in and you pay only a small copay. The exact dollar amounts change each year, so check Medicare.gov for the current year's numbers.

Check whether your pharmacy is in the plan's network

Part D plans contract with specific pharmacies. If you use an independent pharmacy or a small chain, check whether it is in the plan's network before you sign up. Some plans charge more at out-of-network pharmacies, and some do not cover them at all.

Even within a plan, prices can differ between pharmacies. A chain pharmacy across town might charge $20 for a 30-day supply of a drug while your local pharmacy charges $35 for the same thing under the same plan. The Plan Finder lets you choose your pharmacy and see prices at that specific location, so use it. If you use mail order, check whether the plan covers mail-order prescriptions and at what cost.

Compare plans side by side using Medicare's tools

Medicare.gov's Plan Finder is the official tool for this comparison. Enter your zip code, your drugs, and your pharmacy. The tool shows you plans ranked by estimated annual cost, including premiums, deductibles, copays, and coverage gap costs. You can also see which plans are offered by which insurance companies and what customer service ratings they have.

You do not have to use the Plan Finder — you can call 1-800-MEDICARE and speak to someone who will walk you through the comparison — but the online tool is faster if you have your drug list ready. Some local Area Agencies on Aging also offer free counseling on plan choice; call your local agency or search for "SHIP" (State Health Insurance information Program) plus your state name to find a counselor near you.

When you narrow it down to two or three plans, read the plan's Summary of Benefits document on the insurance company's website. This document spells out exactly what you pay for each drug and what happens if you need a drug that is not on the formulary. It is dense, but it is the source of truth.

Know the difference between standard and enhanced plans

All Part D plans must cover the same basic set of drugs — insulin, cancer drugs, anticonvulsants, and others on Medicare's protected classes list. But plans can differ in what else they cover and how much they charge. A plan that covers more drugs or charges lower copays is called an enhanced plan, and it usually costs more in premium.

If you take only common, inexpensive drugs, a standard plan with a low premium might be fine. If you take expensive specialty drugs or multiple medications, an enhanced plan might cost less overall even with a higher premium. The Plan Finder shows you the total cost under each plan, so you can see which is actually cheaper for your situation.

Decide between Original Medicare with a standalone plan or Medicare Advantage

If you have Original Medicare (Parts A and B), you can add a standalone Part D plan from any insurance company. If you have Medicare Advantage (Part C), your plan usually includes drug coverage already, though you may be able to add a standalone plan if your Advantage plan's drug coverage is weak.

Standalone Part D plans let you see any doctor and any pharmacy in the country that accepts Medicare. Medicare Advantage plans usually have networks — you pay more if you see an out-of-network doctor — but they often include dental, vision, and hearing coverage that Original Medicare does not. If you are comparing costs, factor in whether you would use those extra benefits.

If you have Medicare Advantage and your drug costs are high under your current plan, you can switch to Original Medicare plus a standalone Part D plan during the Annual Enrollment Period. This is a bigger change than just switching Part D plans, so talk to a SHIP counselor before you decide.

Act during the Annual Enrollment Period or when you first become may be able to access

You can change Part D plans once a year during the Annual Enrollment Period, which runs from October 15 through December 7. Changes take effect January 1. If you miss this window, you are locked into your plan for the year unless you have a may have access to life event — you move, lose your current coverage, or your income drops enough to may have access to for extra help.

If you are turning 65 or newly may be able to access for Medicare, you have a two-month window to pick a plan without a late enrollment penalty. If you do not pick a plan during this window and you do not have other drug coverage, Medicare will charge you a penalty for every month you go without Part D coverage, even if you sign up later. The penalty is 1 percent of the national average Part D premium per month of delay, and it stays on your premium permanently.

Frequently Asked Questions

What if my drug is not on the plan's formulary?

You can ask the plan to cover it anyway through a process called a formulary exception. The plan will usually ask your doctor to explain why you need that specific drug instead of a cheaper alternative on the formulary. This takes one to three weeks. If the plan says no, you can appeal, but it is faster to pick a plan that already covers your drugs.

Can I switch plans if my needs change during the year?

No, unless you have a may have access to life event like moving to a new state, losing your current coverage, or becoming newly may be able to access for Medicaid. The Annual Enrollment Period is October 15 through December 7, when anyone can switch. If you need a drug that your current plan does not cover, ask about a formulary exception instead of waiting for open enrollment.

Do all Part D plans cover generic drugs?

Yes, all plans must cover at least one drug in each therapeutic category, and most of those are generics. But plans can charge different copays for generics versus brand-name drugs. A generic might cost $5 under one plan and $15 under another, so check the specific price at your pharmacy.

What happens if I cannot afford my copays?

If your income is low, you may be may be able to access for Extra Help, a federal program that pays your Part D premiums and reduces your copays. You can explore through Social Security or at Medicare.gov. Some pharmaceutical companies also offer copay information programs for their drugs, though you cannot use both Extra Help and a copay card at the same time.

Should I pick the plan with the lowest premium?

No. The plan with the lowest premium often has the highest copays and the biggest coverage gap. Use the Plan Finder to see your total estimated cost for the year under each plan, including premiums, deductibles, copays, and coverage gap costs. The cheapest plan overall is the one with the lowest total cost, not the lowest premium.