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Prescription Drug Coverage (Part D)

Drug coverage comes from a private plan — and skipping it when you are first eligible carries a penalty that never goes away.

How Part D works

Part D plans are sold by private insurers, either standalone (alongside Original Medicare or Medigap) or built into a Medicare Advantage plan. Each plan has its own formulary — the list of covered drugs and their tiers — which is why the same prescription can cost very different amounts on different plans.

Federal law now caps what you pay out of pocket for covered drugs each year (the cap is indexed annually), which has made the annual plan comparison simpler — but the formulary match still decides most of what you actually pay.

The penalty that compounds quietly

If you go without Part D (or other creditable drug coverage) after becoming eligible, Medicare adds a permanent late-enrollment penalty when you do join — about 1% of the national base premium for every month you waited, added to your premium for life. Even people who take no medications usually enroll in a low-premium plan for exactly this reason.

Educational information, not advice about any specific plan. For details on every option available in your area, visit Medicare.gov or call 1‑800‑MEDICARE.