Medicare Part D is a drug plan that can help make your prescription drugs more affordable if you are age 65 and older. With low premiums and copays, Medicare drug plans are a reasonably priced addition to your Original Medicare policy. Enrolling in a Part D plan is a relatively simple process; you just need to make sure you do it during your enrollment period to avoid monthly penalties that you incur for years.
Here’s what you need to know about enrolling in Medicare Part D, making sure your prescriptions are covered, and comparing plan options.
Medicare Part D eligibility
If you are becoming eligible for Medicare, then it’s time to enroll in a Part D plan, too. To be eligible for a Part D prescription drug plan, you need to meet Medicare eligibility requirements. This means:
- You’re nearing age 65,
- You or your spouse worked and paid Medicare taxes for at least 10 years,
- You’re under 65 and have Lou Gerig’s disease (ALS), end-stage renal disease, or have a disability that qualifies you for Social Security Disability or Railroad Retirement benefits.
If you have questions about whether you qualify for Medicare, you can check the U.S. Centers for Medicare and Medicaid Services’ (CMS) online tool to help determine when you are eligible to enroll.
Identify your enrollment window
Depending upon your circumstances and work status, there are three times you may be eligible to enroll in a Part D plan.
Initial enrollment period – This is a seven-month window around your 65th birthday. You have three months before your birthday, the month of your birthday, and three months after to enroll in a Medicare Part D plan.
Annual enrollment period – If you areswitching Part D plans, you can enroll during open enrollment. The prescription drug plan enrollment in 2026, and every year, is October 15 to December 7. Your coverage will begin on January 1 of the following year.
Special enrollment period – If you are working at age 65 and have creditable coverage through your employer (including COBRA plans), you don’t need to enroll in a Medicare Part D plan during your initial enrollment period. Creditable coverage means your prescription plan is at least as good as a typical Part D plan. Your employer is required to send out a notice of creditable coverage no later than October 15 every year. If you don’t receive notice, talk to your employer. Then, when you retire and lose that coverage, you will need to enroll in a Part D plan within two months of the time your creditable coverage ends.
Understand the Part D late enrollment penalty
It’s important to avoid a Part D late enrollment penalty when possible. If you don’t enroll in a Part D plan within 63 days of your Medicare eligibility, a late penalty will be added to your monthly premium, which you must pay as long as you are eligible for a Medicare prescription drug plan.
The Part D late enrollment penalty is 1% of the national base beneficiary premium for every month you enroll late. In 2026, that premium is $38.99. So, for example, if you wait for 9 months beyond your enrollment period to sign up for a plan, you will pay an extra $3.51 per month ($38.99 x 0.09) on top of your premium.
Know your prescriptions
When you’re choosing a Medicare Part D plan, you’ll want to create a drug list so you can see which plans cover your medications and what they will cost.
When you make your list, you’ll want to include:
- The dosage of each medication,
- The quantity you receive (i.e. a 30-day or 90-day supply),
- The drug’s format (pill, cream, patch, etc.),
- How often you take the drug (once daily, once a month, etc.).
Your drug list can guide you toward choosing the Part D plan that is right for you. Each prescription plan has a formulary that changes each year. Each plan has a formulary that separates drugs into different tiers, or levels. The tiers include generic medications, typically in the lower tiers, and brand-name and specialty drugs that are often in the higher tiers. Lower-tiered drugs usually have lower out-of-pocket costs than those in higher tiers.
Compare eligible Part D plans
What you will pay for prescription drugs isn’t the only thing to consider when choosing a Part D plan. Your out-of-pocket costs also include a monthly premium, deductibles, and copays.
The amount you pay in monthly premiums for Part D plans in 2026 depends on your annual income. The premiums average about $34.50 a month, but individuals making $109,000 or less a year (and couples making $218,000 or less) will pay $0 a month. The premium amount goes up from there.
For instance, some plans have an annual deductible, meaning you will pay the cost of your medications until you reach that amount. The maximum deductible for 2026 is $615. When you reach your deductible, Medicare will begin covering your prescriptions. Plans without an annual deductible often have higher monthly premiums.
Your copays and co-insurance will depend on where each formulary places your medications. Lower tiers typically have smaller copay and co-insurance, and higher tiers will be greater.
The annual out-of-pocket cap for 2026 is $2,100. The amount you pay in deductibles, copays, and co-insurance goes toward this amount. When you hit $2,100, Medicare covers 100% of your prescriptions for the rest of the year. Knowing this can help you budget, especially if you are on a fixed income. It also protects you if you have a chronic condition that requires a lot of medications or a costly, unexpected medical expense.
A final consideration is your pharmacy. If you find plans with preferred pharmacies that are the same as where you fill your prescriptions, it may save you money.
Medicare Part D enrollment steps
When it’s time to sign up for a Medicare Part D plan, there are a few ways to get enrolled. You can:
- Call 1-800-MEDICARE (1-800-633-4227),
- Visit the .gov website,
- Work with a licensed agent to help choose a plan, such as United Medicare Advisors,
- Complete a paper application and send it to the insurer you choose.
When it’s time to choose the right Medicare Part D plan, there are several important factors to consider. Working with trusted advisors like United Medical Advisors can help you avoid penalties and find the plan that best fits your health and income needs.
