Prescription Drug Plans (Part D)

Part D is Medicare's prescription drug benefit, delivered by private carriers. Each plan publishes a formulary: its list of covered drugs, organized into tiers that determine your copay. Two plans with identical premiums can differ enormously in what they actually cost you, because what matters is whether your specific medications sit on a low tier and whether your pharmacy is in the preferred network. Under the current benefit design, once your out-of-pocket spending on covered drugs reaches the annual threshold you enter catastrophic coverage and pay nothing further for covered drugs that year. Enrolling on time matters: if you go 63 days or more without creditable drug coverage after becoming eligible, a late-enrollment penalty is added to your premium for as long as you have Part D.