Medicare Part D Plans
Taking the Sting Out of Pharmacy Costs
Medicare Part D is a supplement to Medicare that is designed to help pay for your prescriptions. Beneficiaries can access this coverage in one of two ways: either as a Part D stand alone plan that works alongside Original Medicare, or bundled inside a Medicare Advantage plan.
This year, there's a new safety net in place to offset the rising cost of prescriptions. A Beneficiary's out-of-pocket costs for covered drugs are capped at $2,100. So once that limit is hit, there is no more cost associated with your covered prescriptions.
Speak with a locally licensed agent today to discuss your specific prescriptions!
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What is medicare part D
Medicare Part D is prescription drug coverage.
Often referred to as a Medicare PDP (Prescription Drug Plan), these policies are sold by private insurance carriers. A Beneficiary may add a Part D plan to Original Medicare or to a Medicare Advantage plan that does not include coverage for prescription drugs. Nearly 90% of Medicare Advantage plans cover prescription medications as a part of their baseline offering.
Medicare Part D has three phases of coverage
Phase one:
Deductible
The deductible phase is controlled by the total out of pocket cost before the plan starts to pay. In 2026 that amount it $615
Phase two:
Initial Coverage
Once the deductible is reached, Part D will cover 75% of your Prescriptions cost until you reach the annual cap of $2,100
Phase three:
Catastrophic
Once the annual cap is met, you will no longer have to pay anything for your covered prescriptions, but you will still pay your Part D premiums every month.
Understanding the medicare part D Penalty
A Medicare Part D penalty (Late Enrollment Penalty - LEP) applies to stand alone Part D coverage & Medicare Advantage plans if you went 63+ days without "creditable" drug coverage after your Initial Enrollment Period. It is 1% of the national base premium ($38.99 in 2026) multiplied by months uncovered, added to your monthly premium for life.
You can avoid the Part D penalty in these specific situations:
Creditable Coverage:
You have drug coverage from another source that is considered as good as Medicare Part D (e.g., TRICARE or employer insurance).
Extra Help:
You qualify for the Extra Help program (Low-Income Subsidy), which waives late enrollment penalties.
Trial Rights:
If you are in your first year of a Medicare Advantage plan and decide to switch back to Original Medicare, you may have a "trial right" to join a Part D plan without penalty.
Penalty Example:
If you became eligible for Part D in January 2025 but did not enroll until June 2025, that represents a 7 percent penalty (7 months without Part D).
Calculation:
$38.99 (2026 base beneficiary premium) x 0.07 (7 percent penalty) = $2.7293
Rounded to the nearest $0.10, a penalty of $2.70 will be added to your 2026 monthly premium. If the base beneficiary premium changes, the penalty also changes.
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