Medicare
What is Medicare Part D prescription drug coverage?
Medicare Part D is prescription drug coverage offered by private insurers approved by Medicare. Each Part D plan has a formulary organized into tiers. In 2026, the Part D out-of-pocket cap is $2,000 — once you've paid $2,000 in covered drug costs, your plan pays 100% for the rest of the year. Late enrollment penalty: 1% per month for each month without creditable coverage.
Key Points
- Part D covers prescription drugs — not included in Original Medicare Parts A and B
- Offered by private insurers approved by Medicare
- 2026: $2,000 annual out-of-pocket cap on covered drugs
- Each plan has a formulary — check that your drugs are covered before enrolling
- Standalone Part D plans added to Original Medicare + Medigap
- Most Medicare Advantage plans include Part D coverage
- Late enrollment penalty: 1% per month for each month without creditable coverage