Medicare Part D
Prescription drug coverage explained
What Part D is
What to know about Part D up front
Covers prescription drugs
Part D covers outpatient medications, the ones you pick up at a pharmacy or receive by mail order. It's separate from Parts A and B.
Standalone or bundled
Buy a standalone Prescription Drug Plan (PDP) alongside Original Medicare + Medigap, or get it bundled into a Medicare Advantage plan.
Annual out-of-pocket cap
Thanks to the Inflation Reduction Act, your annual out-of-pocket drug costs under Part D are now capped at a federal limit, which effectively ends the old donut hole.
Formulary tiers
How Part D plans price your drugs
Most plans use a structure like this, though tier names, counts, and ranges vary by plan.
| Drug Type | Typical Copay | |
|---|---|---|
| Tier 1: preferred generic | Common low-cost generics | Lowest copay |
| Tier 2: generic | Standard generics | Low copay |
| Tier 3: preferred brand | Brand-name drugs on the plan's preferred list | Mid-range copay |
| Tier 4: non-preferred brand | Brand-name drugs not on the preferred list | Higher copay |
| Tier 5: specialty | High-cost specialty medications | Coinsurance (a percentage of cost) |
The annual out-of-pocket cap changes everything
For years, the Part D "donut hole" was one of the most confusing and expensive parts of Medicare drug coverage. Beneficiaries who spent past a certain threshold faced dramatically higher costs until reaching catastrophic coverage. The Inflation Reduction Act ended that. Starting in 2025, annual out-of-pocket drug costs under Part D were capped at a federal limit. Once you hit the cap in total out-of-pocket for the year, you have no further copays for the rest of the calendar year. Plans also offer the option to spread your annual out-of-pocket costs evenly across the year so you never face a large single expense.
- Annual out-of-pocket maximum set by federal law
- No further copays once you hit the cap
- Optional monthly payment smoothing
Choosing the right plan
The checks that actually matter before you pick a plan
List every medication
Include dosage and frequency. This is the foundation of any meaningful Part D comparison. A generic you didn't mention could change the recommendation.
Check pharmacy networks
Many plans offer lower copays at preferred pharmacies. Verify that your pharmacy (or a convenient mail-order option) is in the plan's preferred network.
Calculate total annual cost
A low-premium plan with high copays can cost more over a year than a higher-premium plan with low copays. Add up premium, deductible, and annual copays for your actual meds.
Enrollment windows
When you can add or change Part D
7 months around 65
Initial Enrollment Period
A 7-month window: the 3 months before your 65th birthday month, your birthday month, and the 3 months after. Enrolling during your IEP avoids the Late Enrollment Penalty.
Oct 15 – Dec 7
Annual Enrollment Period
Switch Part D plans, add Part D, or drop coverage. Changes take effect January 1. This is when we recommend re-comparing your plan against your current medication list.
As needed
Special Enrollment Periods
Triggered by qualifying events like moving, losing creditable drug coverage, or qualifying for Extra Help (Low-Income Subsidy).
Don't sleep on the Late Enrollment Penalty
If you go 63+ consecutive days without Medicare Part D or other creditable prescription drug coverage, you'll pay a Late Enrollment Penalty when you eventually enroll. The penalty is permanent and gets added to your Part D premium for as long as you have Medicare drug coverage. It's calculated as 1% of the national base premium for each month you went without creditable coverage, so even modest delays add up over a lifetime of premiums. Employer or union coverage that's certified "creditable" protects you, so ask for a creditable coverage notice each year.
- 1% of base premium per month without creditable coverage
- Permanent, lasting as long as you have Part D
- Creditable employer coverage protects you
Will was extremely helpful getting us our Medicare A, B, Supplement, and Drug plan. My situation was difficult — I'm handicapped and only qualify for spousal benefits, and my medications are expensive. Will worked hard to find a Part D plan that fit.
Susan S.
Medicare Part D client · South Carolina
Related coverage
Explore the rest of Medicare
Medicare Overview
Start here to understand the full Medicare landscape, including Parts A, B, C, D, and Medigap.
Learn moreMedicare Advantage
Part C plans that bundle A, B, and usually D into one — with dental, vision, and hearing extras.
Learn moreMedicare Supplement
Medigap plans that fill the gaps in Original Medicare, typically paired with a standalone Part D plan.
Learn more
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What Our Clients Say
Real people. Real guidance. Real peace of mind.
I can't say enough nice things about Will Murdock and the hours he's spent helping me find the best plan. He sat on hold listening to elevator music for hours getting all the kinks worked out with my Medicare and Medicaid.
Stacey R.
Medicare client · South Carolina
Brandon is a wealth of information. He's personable, easy to talk to, and made the crazy world of Medicare make sense. He's my recommendation for friends and family getting ready to become eligible.
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New Medicare enrollee · South Carolina
Brandon is super compassionate with older folks. He guided my mom through her Medicare open enrollment so smoothly. Thanks, Brandon.
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Family caregiver · South Carolina
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Why work with us
Matching your drug list to every plan's formulary is where the savings hide
Every plan compared
We compare every available Part D plan in your area against your exact medication list. The same prescription can sit on a low tier with one plan and a much higher tier with another, so the right plan can save real money.
Total-cost modeling
The lowest premium plan is rarely the lowest total cost. We add up premium, deductible, and copays for your actual drugs across each plan.
Annual reviews at AEP
We re-run the comparison every fall during Annual Enrollment so you're never caught off-guard by formulary or premium changes at renewal.
Got Questions?
Frequently Asked Questions
Have a question not listed here? Get in touch.
During your IEP (7-month window around turning 65), the AEP (October 15 – December 7), or a qualifying SEP. Enrolling when first eligible avoids the Late Enrollment Penalty.
Premiums vary widely by plan and carrier. Some Medicare Advantage plans bundle Part D at no additional premium. The lowest-premium plan is rarely the lowest total cost — formulary, tier placement, and pharmacy network usually drive more savings than the headline premium does.
Starting in 2025, the Inflation Reduction Act capped annual out-of-pocket drug costs under Part D. That federal cap is updated each year and effectively eliminates the old donut hole for most beneficiaries.
Most Medicare Advantage plans include drug coverage. If yours does, you don't need a separate Part D plan. Check your plan's Summary of Benefits.
If you enroll in a Medicare Advantage plan that includes drug coverage, your standalone Part D plan is automatically disenrolled — you can't have both at the same time. If you switch back to Original Medicare later, you can add a standalone Part D plan.
Not if that employer coverage was certified 'creditable' — meaning it was at least as good as standard Medicare drug coverage. Ask your employer or union for a Creditable Coverage Notice each year. If the coverage was creditable, you can delay Part D without penalty. If not, or if you go 63+ consecutive days without creditable coverage, the Late Enrollment Penalty applies.
Important notice: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
Compare Part D plans in SC, free
We analyze your specific drug list against each plan's formulary and cost structure, at no cost to you.