Comprehensive Guide to Medicare Part D Plans

Medicare Part D

Medicare Part D is private insurance to help cover the cost of prescription medications. Part D plans provide coverage for both generic and brand name medications and can be added to Medicare Part A, B or Medicare Supplement Plans. It can also be included in a Medicare Advantage Plan. You can only be enrolled in one Part  D plan at a time.

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The Steps of Part D Drug Coverage

There are four steps of drug coverage during the calendar year. Your drug plan will send you statements on these amounts as you fill your prescription drugs. 

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Step 1 Annual Deductible

If your plan has a deductible, you will pay the full cost of the drug until you reach the deductible amount.

For 2026 no plan may exceed a deductible of $615. Once this is reached you will pay the cost-share for the covered drug. 

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Step 2 Initial Coverage

Your Medicare Drug Coverage (Part D) will have an annual out-of-pocket maximum of $2,100. This annual out of pocket (also referred to as your TrOOP) does not apply to out-of-pocket spending on Part B drugs or excluded drugs. Medicare Part B covers drugs that are administered by a doctor, nurse, or other healthcare provider in an outpatient setting such as a doctor’s office. For example, some cancer drugs and injectable drugs are covered under Part B. You may get your drugs at network retail pharmacies and mail order pharmacies

 

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Step 3 Catastrophic Coverage

After your yearly out-of-pocket drug costs (including drugs purchased through your retail pharmacy and through mail order) reach $2,100, you pay $0 copay for the remainder of the year.

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