What It Is
Medicare Part D is optional prescription drug coverage that helps pay for outpatient medications you get at a pharmacy, as well as certain vaccines.
It was introduced in 2006 to help cover the cost of prescription drugs that are not covered under Original Medicare.
Who Offers It
Medicare Part D plans are offered by private insurance companies approved by Medicare.
You can get coverage in one of two ways:
- Stand-alone Prescription Drug Plan (PDP): Works with Original Medicare.
- Medicare Advantage Plan with Drug Coverage (MA-PD): Combines medical and drug coverage in one plan.
Who Is Eligible
Available to anyone who is enrolled in Medicare Part A and/or Part B and lives in the plan’s service area.
What It Covers
Each plan has a formulary (list of covered drugs) organized into tiers — lower tiers usually have lower costs.
Plans may also have rules like prior authorization, quantity limits, or step therapy for certain medications.
Key 2026 Cost Figures
- Maximum Annual Deductible: $615
- Annual Out-of-Pocket Spending Limit (Catastrophic Coverage Threshold): $2,100
Enrollment and Late Penalty
- Initial Enrollment Period (IEP):
- 3 months before your 65th birthday
- The month of your birthday
- 3 months after your 65th birthday
- Late Enrollment Penalty
- Applies if you go 63 days or more without creditable prescription coverage after becoming eligible.
- Penalty equals 1% of the national base beneficiary premium for each full month without coverage.
- This penalty is added to your monthly premium permanently once you enroll.
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