Need drug coverage? The race is on.
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Medicare Part D provides prescription drug coverage for anyone age 65 and older who is enrolled in Medicare. Alongside Part A for hospital expenses and Part B for outpatient services, Part D is an important component of health care for millions of older adults.
Prescription drugs often make up a significant portion of seniorsâ out-of-pocket medical expenses. Understanding how Part D works and when to enroll is key to helping you maintain comprehensive and affordable medical coverage.
Key Points
- Medicare Part D is a government-sponsored program that helps cover the cost of prescription drugs for Medicare enrollees.
- Part D is optional, but not enrolling when youâre first eligible could lead to a permanent increase in your monthly premium.
- Changes in 2025 included the elimination of the Medicare Part D âdoughnut hole,â a coverage gap that temporarily resulted in higher out-of-pocket costs.
Medicare Part D is a component of the larger Medicare system, which includes Part A and Part B. Introduced in 2006, Part D helps to cover the cost of prescription drugs for those enrolled in Medicare, starting at age 65.
Medicare Part D prescription plans are optional. But if you donât enroll when youâre first eligible, you may be assessed a late-enrollment fee that results in a higher monthly premium. The exception is if you have existing, âcreditableâ prescription drug coverage, such as through an employer-sponsored health care plan. If so, you can enroll in Medicare Part D later without incurring a penalty.
How to enroll in Medicare Part D: Eligibility and steps
To enroll in Medicare Part D, you must be eligible for Medicare, either by turning 65 or meeting certain other requirements, such as having a disability or serious health condition.
- Medicare Part D prescription plan: To enroll in Medicare Part D drug coverage, you must have either Part A or Part B. Part D is considered an add-on to either of these programs.
- Medicare Advantage plan: Also called Medicare Part C, an Advantage plan combines all your Medicare coverage into one policy. Parts A and B are required to enroll. Not all Advantage plans include prescription coverage, so be sure to compare.
- Other Medicare health plans: Medicare Cost plans are an alternative to Advantage plans. They permit out-of-network care and allow you to add Part D separately. The Program of All-Inclusive Care for the Elderly (PACE) includes prescription drug coverage, eliminating the need to enroll in Part D. PACE is available to seniors who qualify for both Medicare and Medicaid and meet the criteria for nursing home care, but prefer to stay in their homes.
Medicare enrollment periods
Medicare has regular enrollment periods. Know when to sign up for or change your Medicare drug plan to ensure you have sufficient coverage.
| Enrollment period | When you can enroll | Actions you can take |
|---|
| Initial enrollment (Part A and Part B) | Three months before turning 65 until three months after you turn 65 | Join any Part D plan as long as you have Part A and Part B |
| Initial enrollment (starting Part B later) | Three months before your Medicare Part B plan starts (as noted in your enrollment paperwork) | Join a Medicare Advantage plan that includes prescription drug coverage or add Part D |
| Open enrollment | October 15 to December 7 | Add or drop drug coverage for Original Medicare or Medicare Advantage, or switch between them |
| Medicare Advantage open enrollment | January 1 to March 31, or within the first three months of signing up for Medicare | Switch to a Medicare Advantage plan with the drug coverage you want or change to Original Medicare |
| Special enrollment | Anytime you experience a major life event or thereâs a significant change to your life circumstances, such as a move or a substantial change in coverage availability | Review and enroll in a new plan or add drug coverage |
How much does Medicare Part D cost?
Medicare Part D costs include your premium, annual deductible, and co-payments or coinsurance.
Insurance premium. The base premium for 2026 is $38.99, but higher-income beneficiaries will pay a surcharge. For individuals earning $109,000 or more annually ($218,000 for couples filing a joint tax return), the projected additional amount for 2026 ranges from $14.50 to $91.90, depending on income. Also, some drug plans impose fees in addition to the base premium. To get the best deal, compare the features of Medicare Advantage and Medigap (supplemental Medicare insurance) plans and their costs.
âExtra Helpâ can lend a hand
The Extra Help program assists low-income seniors with affording their medications. If you qualify, you pay no plan premium or deductible, and the most youâll pay is $4.90 for generic drugs and $12.15 for brand-name drugs at participating pharmacies. Some beneficiaries qualify automatically for Extra Help, while others need to apply.
Plan deductible. Medicare Part D deductiblesâthat is, the amount you pay before your insurance kicks inâvary by plan. Not all drugs are treated the same. Prescription drugs are sorted by tiers; some drugs may be covered before you meet your deductible. Check your plan details and its formulary for more information on drug tiers.
Co-payment and coinsurance. The amounts you pay after your deductible is met are known as co-payments and coinsurance. How much you pay depends on your plan and whether the drug is generic or brand-name. There are exceptions. The Inflation Reduction Act placed a $35 monthly cap on the cost of insulin for those with Medicare Part D coverage, and recommended vaccines are free.
How to avoid a Medicare Part D late enrollment fee
What happened to the Medicare Part D âdoughnut holeâ?
Part D used to include a coverage gap known as the âdoughnut hole,â during which beneficiaries temporarily paid a higher share of prescription drug costs after reaching a spending threshold. As of 2025, that coverage gap disappeared, replaced by an annual out-of-pocket cap on covered prescription drugs.
After reaching that cap, set at $2,000 for 2026, enrollees generally pay nothing for additional covered medications for the rest of the year.
Part D imposes a late enrollment penalty if you fail to sign up when youâre eligible and lack other drug coverage. The fee lasts as long as you have a Part D plan and equals 1% of the national base beneficiary premium for each month you were uninsured, rounded to the nearest 10 cents.
Late enrollment fee example. Suppose you go 16 months without enrolling in Medicare Part D and have no other prescription drug coverage. You enroll in 2026 when the base rate is $38.99. To calculate your fee, multiply $38.99 by 0.01 (or 1%), which equals 0.3899. Then, multiply that amount by 16 months, which comes to $6.24. Round that sum to the nearest 10 cents, and you get $6.20. Add that amount to $38.99 and you wind up with a monthly premium of $45.19.
Millions of seniors 65 and older rely on Medicare Part D to help manage prescription drug costs, which can be substantial for anyone taking multiple or ongoing medications. Enrolling in Part D when you first become eligible is important, because delaying coverage without other prescription drug insurance can result in a permanent late-enrollment penalty.
Some Medicare Advantage plans include prescription drug coverage, eliminating the need to purchase Part D separately.
Recent changes to the program have simplified coverage by eliminating the Part D âdoughnut holeâ and adding an annual out-of-pocket capâ$2,000 in 2026âon covered drugs. Still, plans vary in premiums, pharmacy networks, and which medications are covered, so itâs worth reviewing your options each year to make sure your coverage continues to meet your needs.
This article was most recently revised and updated by Miranda MarquitThis article was most recently revised and updated by David Schepp
