The Truth About Medicare Part D (And How to Avoid Overpaying)

What Is Medicare Part D?

Medicare Part D is prescription drug coverage, and you can get it in two ways:

1. As a standalone Part D plan with Original Medicare
2. Built into a Medicare Advantage plan

Part D plans are run by private insurance companies, which means:

• Not all plans cover the same medications
• Drug costs can vary dramatically
• Each plan has its own network of pharmacies

The Truth About Part D: It’s Not One-Size-Fits-All

The best plan for your neighbor might be the worst one for you. Why?
Because every plan has:

• Different formularies (the list of drugs it covers)
• Different copays and coinsurance
• Different pharmacy networks
• Different tiers for the same medication

Example: One plan might charge $5 for your prescription, while another charges $150 for the exact same drug.
We’ve had clients save over $1,000 per year simply by switching plans—without changing a single medication.

Why You Must Review Your Plan Every Year

Part D plans can change every year during the Annual Enrollment Period (AEP), which runs October 15 – December 7.
If you don’t review your plan annually, you could:

• Lose coverage for your medications
• Pay much higher copays
• Miss out on lower-cost pharmacy options

The Big Change in 2025: No More Donut Hole

In 2026, Part D will have a major update:

• The donut hole is gone
• There’s now a $2,000 annual out-of-pocket cap for covered medications

Here’s how it works:

1. Pay your plan’s deductible (if it has one)
2. Pay copays or coinsurance for prescriptions
3. Once your total out-of-pocket for covered drugs hits $2,000, you pay nothing for the rest of the year

This is especially good news if you take expensive brand-name medications—it could save you thousands compared to prior years.

Our Recommendations for Every Medicare Beneficiary

1. Review your prescriptions every year during AEP
2. Compare all available plans in your zip code
3. Check pharmacy pricing—switching pharmacies can save you money
4. Make sure your plan:
   • Covers your medications now
   • Has competitive copays and coinsurance
   • Will continue to meet your needs going forward

Key Takeaways

• Medicare Part D is not the same for everyone
• The $2,000 annual out-of-pocket cap in 2026 is a big win for those with costly medications
• Reviewing your plan every year is the best way to avoid overpaying

If you want expert help choosing the right plan for your prescriptions and budget, call us at 800-208-4974. We’ll walk you through it step-by-step.