Two ways to get prescription drug coverage
A stand-alone Prescription Drug Plan (PDP) can work with Original Medicare. Most Medicare Advantage plans include Part D in one plan (often called MA-PD). Check the rules before adding a separate drug plan: doing so can disenroll you from certain Medicare Advantage plans.
Plans are offered by private insurers approved by Medicare. Premiums, covered drugs, pharmacy networks and cost sharing differ. Compare your specific medicines, including dosage and frequency.
Part D costs: 2026 and 2027
These are federal Part D limits, not a quote for a particular plan. A plan may have a lower deductible or different cost-sharing arrangements.
| Item | 2026 | 2027 |
|---|---|---|
| Maximum annual deductible | $615 | $700 |
| Annual out-of-pocket limit for covered Part D drugs | $2,100 | $2,400 |
| After reaching the covered-drug limit | $0 cost sharing for covered Part D drugs for the rest of the calendar year. | $0 cost sharing for covered Part D drugs for the rest of the calendar year. |
| Plan premium | Varies by plan; income-related adjustments and late enrollment penalties may apply. | Varies by plan; check the 2027 plan documents. |
Premiums and drugs your plan does not cover are not included in the drug spending limit. Certain payments made on your behalf count; your Explanation of Benefits shows your progress. The old “donut hole” descriptions and 2020 dollar thresholds no longer describe current Part D coverage.
How the coverage stages work
- Deductible: if your plan has one, you pay applicable covered costs until you meet it. Some drugs may be exempt.
- Initial coverage: you pay the plan’s copayment or coinsurance. Under the standard benefit, this is 25% coinsurance; actual plan designs can differ.
- Catastrophic coverage: after reaching the annual covered-drug out-of-pocket limit, you pay no cost sharing for covered Part D drugs for the rest of the calendar year.
What is covered? Start with the formulary
The formulary is the plan’s covered-drug list. Different tiers can have different costs. Some drugs require prior authorization, step therapy or quantity limits. A preferred pharmacy may cost less than another network pharmacy.
Plans must cover a broad range of medicines, including protected categories under Medicare rules. This does not mean every medication or every brand is covered. Check each drug by name and strength. Some covered items have special cost-sharing protections. Confirm the current rules and your expected costs with the plan.
Payment options and help with costs
The Medicare Prescription Payment Plan lets you spread covered out-of-pocket drug costs across the remaining months of the calendar year. It does not reduce the total you owe, and monthly bills are not necessarily equal. Contact your drug plan to opt in.
Extra Help may reduce Part D premiums, deductibles and copayments if you qualify. Medicaid, Medicare Savings Programs and State Pharmaceutical Assistance Programs have their own rules. Do not assume Extra Help pays the Part B premium; that is a separate question. Read our financial assistance answers.
Who can enroll?
For a stand-alone Part D plan, you generally need Part A or Part B and must live in the plan’s service area. For a Medicare Advantage plan with drug coverage, you need both A and B. Citizenship or lawful-presence and enrollment-period rules apply.
People may qualify before age 65 because of disability, ALS or End-Stage Renal Disease. The start date depends on the individual’s Medicare eligibility.
Enrollment dates and avoiding penalties
| Period | When | What it means |
|---|---|---|
| Initial enrollment | Generally the seven-month period around your 65th birthday. Disability and other circumstances can change the timing. | Enroll in Medicare when first eligible; confirm your health and drug plan election dates. |
| Annual Open Enrollment | October 15–December 7, 2026 | Make eligible health and drug plan changes for January 1, 2027. |
| Medicare Advantage Open Enrollment | January 1–March 31 | People already in Medicare Advantage can make one eligible change to another MA plan or return to Original Medicare, with an opportunity to join a Part D plan. |
| Special Enrollment Period | Depends on the qualifying event | Moving, loss of certain coverage or other qualifying circumstances may allow a change. The deadline and allowed change depend on the event. |
If you go 63 consecutive days or more without Part D or other creditable prescription drug coverage after your initial enrollment opportunity, a late enrollment penalty may apply for as long as you have Part D. Keep your employer or other plan’s creditable-coverage notices. Extra Help can affect the penalty. See how to enroll before dropping existing coverage.
If a drug is not covered
Ask the plan whether an equivalent covered medicine is available and discuss any change with your prescriber. You or your prescriber can request a coverage determination or formulary exception. If the plan denies the request, the decision notice explains appeal rights. Ask about transition supplies when joining a new plan.
An insurance agent can help you find plan information; only your healthcare professional can recommend a medication change.