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Medicare Part D (Prescription Drug Plans)
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Important Points
In 2006, the Medicare Part D program was started to provide prescription drug coverage to Medicare beneficiaries.
There are specific enrollment periods during the year you can enroll in a Part D plan or change to a different Part D plan.
Part D plans will have a monthly premium as well as cost-sharing for covered drugs.
Medicare Part D is a federal program that started in 2006 that provides Medicare beneficiaries with access to prescription drugs at affordable copays. Prior to this program, people on Medicare paid mostly out-of-pocket for their medications for over 40 years. This was a much needed, overdue, improvement to the Medicare program.
Medicare Part D is coverage for prescription drugs that you get from a retail pharmacy. This is a voluntary program and it allows you to access medications at a more affordable rate while also providing insurance against catastrophic drug costs.
You do not enroll in Medicare Part D through Social Security. Medicare Part D plans are offered by private insurance companies in your state and can be purchased through an agent that specializes in Medicare.
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Medicare Part D Cost
Medicare Part D costs include several things. First, there is a monthly premium that you will need to pay for the insurance itself. Additionally, there is cost-sharing that you will pay at the pharmacy for your medications. This cost-sharing may include some deductible spending if your plan has a deductible.
Let's break these down for you.
Monthly Premiums
The monthly premiums for Part D drug plans can vary depending on the specific plan you choose. Each insurance company sets their own rates.
In 2025, there are many Part D plans to choose from in each state. Plans can range from as low as $7 a month in some states to over $200 per month. Each insurance company sets its own formulary (a list of medications that are covered by the plan).
The cheapest Part D plan in your state is not always going to the best fit for you. Its important to select a plan with a formulary that offers the medications that you need. If you enroll in the cheapest plan without checking the plan's formulary, you may learn - after you are already locked in - that your plan does not cover one of your medications. A good agent will review the medications you take against the plans that are available in your state and assist you in selecting the best plan that will fit your budget and cover all of your medications.
People with higher incomes might have to pay more for the Part D plan. If you earned more than a certain amount, then Medicare will require you to pay extra for your Part D plan. This is part of the Income Related Monthly Adjusted Amount (IRMAA). You can read more about this on our IRMAA page.
Medicare Part D Cost-Sharing
When you go to the pharmacy to pick up your medications, you will pay your share of the costs. Some plans require a deductible, and then there are copays that you pay for the medication itself.
Medicare Part D Deductible
The Center for Medicare and Medicaid Services (CMS) sets the minimum guidelines for Part D plans each year, and every insurance company offering these plans must follow these guidelines. All Part D plans have 3 stages, and Medicare sets the threshold for each stage each year.
Stage 1 is the Medicare Part D deductible. In 2025, this deductible is capped at $590. What this means is that each company can require up to a $590 deductible from you up front before your benefits kick in. Many plans can and will offer a lower deductible or sometimes no deductible at all. However, no plan can charge a higher deductible than what Medicare allows for that specific year.
Generally, the plans that charge the deductible upfront have lower monthly premiums and lower drug copays. Some companies may not have a deductible (which means your coverage kicks in right away), but generally they will have higher premiums and copays than plans that have a deductible.
Medicare Part D Copays
Medicare Part D plans typically have 5 tiers for the medications in their formulary. Tier 1 is usually preferred generic medications. Tier 2 would be non-preferred generic meds. Tier 3 would be the preferred brand name drugs, and so on. The insurance carrier will set the copay for each tier. For instance, one company may charge a $5 copay for Tier 1 medications while another charges $8. This is why it is so important that you review the plan's formulary and make sure that your medications are covered and you know what you can expect to pay for your drugs.
At Mohring Insurance Services LLC, we employ a Drug Finder Tool that will show us which plans in your state will be the most cost-effective for you based on your zip code and the medications you take.
It is crucial to do your homework each year, as plans change annually. Make sure you are getting the lowest out-of-pocket drug spending for the upcoming year.
Extra Help Paying for Part D Costs
The federal government offers help paying for your Part D expenses if you qualify for a Low-Income Subsidy. Anyone can apply for this with the Social Security Administration, but the help is awarded based on proof of low income and limited resources. Your annual income must fall below 150% of the Federal Poverty Level based on your household size.
If you qualify, you will receive assistance with paying your monthly Part D premiums, your annual Part D deductible, and your copays for retail medications. There are different levels of qualifying. The subsidy level determines how much assistance you will get with your monthly premiums. Someone who qualifies for a full subsidy would have 100% of the Part D premium paid for - up to the limit allowed by Medicare for that year.
As an example, if you get a notice that you have been awarded a full subsidy, and the limit allowed by Medicare that year is $55, then the Low-Income Subsidy program will pay up to $55 per month toward your premium. Choosing a Part D plan with a premium of $55 or less would mean that you pay nothing for your drug plan. Also, you will pay no deductible, even if your plan has one. Additionally, your copays for medications are greatly reduced. If you think you might qualify for the Low-Income Subsidy, it is worth contacting Social Security to submit an application.
Medicare Part D Enrollment
Medicare Part D is voluntary. However, without it, you may pay a lot for medications that you need down the road. We always suggest that if Medicare is going to be your primary coverage, you should enroll in a Part D plan when you first become eligible.
EXCEPTION: If you are still working at age 65 you can delay your Part D enrollment until you retire. As long as your employer insurance has drug coverage that's as good as or better than Part D plans, you can delay your enrollment without accruing a penalty.
How to Enroll in Part D?
You can enroll in a Part D plan directly with a Medicare Part D insurance provider or through one of our agents that specialize in Medicare products. Enrolling with an agent means that you will have an extra resource for help when you have questions or issues with your drug plan. If you would like help in selecting a Part D plan or just have questions in general you can call us at (866) 440-1885.
You must enroll in a Part D plan in the service area where you live. Alternatively, you can enroll in a Medicare Part D plan on Medicare's website or by calling Medicare at 1-800-MEDICARE.
PLEASE NOTE: Some Medicare Advantage plans have built-in Part D drug coverage. Make sure to check that your specific medications are covered by a Medicare Advantage plan before enrolling. You can only have one Part D plan at a time. Therefore, you cannot be enrolled in both Medicare Advantage and Part D at the same time.
When Do I Enroll in Part D?
There are only certain windows of time during the year that you can join a Medicare Part D plan. You are eligible to enroll in a Part D plan when you first get Medicare. This is your Initial Enrollment Period (IEP) and it lasts a total of seven months. It includes the three months before you turn 65, your birth month, and the three months following. A similar window exists for people who become eligible for Medicare because of a disability.
Part D also has an annual election period (AEP) that runs from October 15 - December 7 each year. During AEP, you can enroll or disenroll from any drug plan. The reason this election period exists is because each Medicare Part D plan's benefits, pharmacy networks, premiums, formulary, and/or co-payments/co-insurance may change on January 1st of the following year. Since plans can make these changes annually, Medicare gives you this enrollment period as an opportunity to change plans if you need to.
Each September your Part D drug plan will mail you an Annual Notice of Change (ANOC) letter. The letter will list everything that is changing with your plan for the following year.
If you are okay with the changes, there is no action needed on your part. Your plan will automatically renew in January. However, it is a good idea to review your ANOC letter. Some people change their Part D plans during AEP if their prescription needs have changed and another plan better suits them.
Special Election Periods (SEP's) for Part D Plans
When you enroll in Medicare Part D, you are locked into the plan for the rest of the calendar year and you must wait for the next Annual Election Period (AEP) in order to change plans or disenroll. However, Medicare understands that there may be certain circumstances where you would need to change plans mid-year. This is why they have created Special Election Periods (SEP's) for this. SEP's are typically triggered by certain life events.
For example, if you move out of state or lose your group medical coverage in the middle of the year you would qualify for an SEP. These kind of situations create a 60 day window during which you can make the necessary changes. Keep in mind that your application for the new Part D plan has to be coded properly in order to take advantage of your SEP. An incorrect code on the application may cause it to be rejected, so be sure to work with an agent who specializes in these plans. If you have any questions or concerns about this process you can call us at (866) 440-1885.
NOTE: By law, your insurance agent cannot solicit you for a Medicare Part D plan, so if you wish to enroll, you must initiate the contact with your agent.
Is a Medicare Part D Plan Right for Me?
Each state offers dozens of Medicare Part D plans. We can assist you in evaluating each plan based on your individual medications. We'll help you determine which Part D plans offer the specific medications you need at the lowest copays. You can always schedule a FREE CONSULTATION with us by clicking the button below. We are happy to help.
Key Points
Medicare Part D is the drug coverage program for people with Medicare.
You must enroll in a Medicare Part D plan during an available enrollment period.
You will pay a monthly premium and have copays and coinsurance for your medications.
At Mohring Insurance Services LLC, we are happy to offer assistance with Medicare Part D when you choose to enroll. Give us a call at (866) 440-1885, or to schedule a free consultation, click the link below:
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