How to Evaluate Your Medicare Part D Drug Coverage
Updated October 2026
When it comes to Medicare, one area that deserves an annual check-up is your prescription drug coverage. Many retirees don’t realize that while Medicare Supplement (Medigap) policies generally lock you into your original carrier and plan, Medicare Part D drug plans are different. You can review and change your Part D plan every year during the Annual Enrollment Period (October 15 – December 7). Any changes you make will take effect on January 1. That flexibility is valuable — but only if you take the time to compare your options.
The same is true for Medicare Advantage (also known as Part C) plans, which often include prescription drug coverage. You should also review these plans and possibly switch annually, since their benefits, networks, and pricing can change from year to year. If you opted for Medicare Advantage instead of original Medicare (Parts A & B with a supplement), then it’s even more critical that you review your plan annually to ensure it’s still a good fit, since insurers can, and often do, change pricing, networks, and coverages from one year to the next.
What's Changed Since 2025
Part D was redesigned by the Inflation Reduction Act, and the changes are significant:
An annual out-of-pocket cap. Once your out-of-pocket spending on covered drugs reaches the cap, you pay nothing more for covered drugs for the rest of the year. The cap is $2,000 in 2025 and is adjusted annually for inflation every year thereafter. It applies to every Part D plan and Medicare Advantage drug plan, regardless of premium.
The "donut hole" is gone. The old coverage gap was eliminated in 2025.
The Medicare Prescription Payment Plan. You can opt to spread your out-of-pocket drug costs into monthly payments across the year rather than paying most of it in January through March. This can help with cash flow if you expect to hit the cap, though it doesn't reduce what you owe.
Negotiated drug prices. Medicare now negotiates prices on a growing list of high-cost brand-name drugs, with 10 drugs taking effect in 2026 and 15 more in 2027.
The cap only counts drugs on your plan's formulary (or approved through an exception) and filled at a network pharmacy. That's why checking that each of your medications is covered remains the most important step.
Why You Should Review Annually
Part D and Advantage drug plans are not static. Each year:
Formularies change: Drugs may move from one “tier” to another, affecting your cost.
Premiums and deductibles adjust: What was affordable last year may no longer be the best value.
Your prescriptions may change: New medications or dosage changes can alter which plan works best for you.
Plan choices change: Insurers have added, dropped, and restructured stand-alone Part D plans since the redesign. Your plan may look quite different next year, or may not be offered at all. Read your Annual Notice of Change (ANOC) carefully.
As a result, sticking with last year’s plan can cost you more than necessary.
Matching the Plan to Your Prescriptions
The best way to evaluate your options is to start with your medication list:
If most of your prescriptions are generic
A low-premium plan often makes sense, since generics typically fall into Tier 1 or Tier 2 with low copays. For a few inexpensive generics, it's also worth comparing cash prices (see below).If you take brand-name or specialty drugs
The out-of-pocket cap changes this calculation. If you're likely to reach the cap under any plan that covers your drugs, a lower-premium plan may cost you less overall, since your out-of-pocket ceiling is the same either way. What matters most is that the plan covers each of your drugs without burdensome restrictions such as prior authorization or step therapy. If you're unlikely to reach the cap, differences in copays and coinsurance still matter.
Remember: it’s not just about the cheapest monthly premium. The real goal is to minimize your total yearly expense — premiums plus deductibles, copays, and coinsurance.
Other Key Considerations
Preferred Pharmacies: Many plans offer lower copays at “preferred” pharmacies. Switching where you fill prescriptions can sometimes save as much as changing plans.
The Out-of-Pocket Cap: See above. The cap ($2,400 in 2027) is the same on every plan, but only covered drugs count toward it.
Extra Help: If you have limited income, you may qualify for the federal “Extra Help” program, which can significantly reduce premiums and out-of-pocket costs.
Paying Cash Outside of Insurance: Tools like GoodRx, Mark Cuban Cost Plus Drug Company, and TrumpRx can sometimes beat your plan's price, especially for inexpensive generics or drugs your plan doesn't cover. Keep in mind that cash purchases do not count toward your Part D deductible or out-of-pocket cap. For people on expensive medications, filling through the plan is generally the safer choice.
GLP-1 Weight-Loss Drugs: Part D generally doesn't cover GLP-1 drugs prescribed for weight loss. From July 1, 2026 through December 31, 2027, the temporary Medicare GLP-1 Bridge offers eligible Part D enrollees certain GLP-1 drugs for $50 per month. That copay does not count toward the out-of-pocket cap.
Common Mistakes to Avoid: Don't pick a plan based solely on premium, forget to update your prescription list when comparing, or assume your current plan is still the best choice. And don't assume a broker or your insurer will flag a better option for you (see below).
How to Compare Plans
The most reliable resource is the official Medicare Plan Finder at Medicare.gov. It allows you to:
Enter your ZIP code.
Select your preferred pharmacies.
Add your medications.
View side-by-side comparisons of available plans, including estimated annual costs and star quality ratings.
Importantly, the Medicare Plan Finder lets you compare both stand-alone Part D drug plans and Medicare Advantage (Part C) plans with drug coverage. In either case, evaluating your options annually helps ensure your coverage still fits your needs. For a step-by-step walkthrough of the Plan Finder, the Steinlage Insurance Agency's Medicare Part D Resource Center is a helpful guide.
Why fewer brokers offer reviews now: Since the Part D redesign, many insurers have stopped paying brokers commissions on Part D plans. As a result, many brokers no longer review drug coverage with clients each year. That makes the free and paid options below more important.
For personalized guidance, you can also contact your state’s SHIP (State Health Insurance Assistance Program) or call 1-800-MEDICARE.
The Bottom Line
Evaluating your Part D coverage each year is one of the simplest ways to keep your health care costs under control. Take an hour during open enrollment to run your prescriptions through the Medicare Plan Finder and compare your options. With the out-of-pocket cap now in place, the most expensive plan is often not the safest one; the plan that covers all of your drugs is.
Whether you have a stand-alone Part D plan or drug coverage through a Medicare Advantage plan, annual review during open enrollment is the key to keeping costs manageable and coverage aligned with your needs.
Clients can also reach out to us for guidance and referral to local outside experts during open enrollment to help them find coverage that fits their situation.
