Part D Explained
Medicare’s drug program (Part D) creates more confusion than any other part of Medicare. Many seniors feel frustrated at the pharmacy because drug plans use complex rules and limited pricing flexibility. My goal is to simplify how these plans work and reduce some of that frustration.
You can change your drug plan once a year from October 15 to December 7, unless you qualify for a special election period.
Most seniors receive drug coverage in one of two ways. Some choose a stand-alone Part D plan, while others use a Medicare Advantage plan with drug coverage included. Both options work similarly, although stand-alone plans usually charge a monthly premium and Advantage plans often do not.
Part D plans move through several phases, and you progress through them in order.
1. Deductible Phase
Most drug plans include a deductible. You pay the retail price of your medications until you meet that amount.
For 2026, the deductible on most plans is $615.
Some plans apply the deductible only to higher-tier drugs, so your lower-tier medications may bypass it.
2. Initial Coverage Phase
After you meet the deductible, you pay the discounted price for your medications.
Your cost depends on the drug’s tier.
Generic drugs almost always cost far less than brand-name drugs.
3. Catastrophic Phase
Once your out-of-pocket costs reach $2,100, you move into catastrophic coverage.
You pay nothing for covered medications for the rest of the year.
Picture your drug costs on a timeline. You move through these phases as the year progresses, and your prices change along the way. I’ve kept this explanation brief, but it should give you a clear understanding of how Part D works.
If you’d like to talk through your Medicare questions, please give us a call at 800-750-2407. We’re always happy to help.
God Bless!