How to Compare Medicare Part D Plans Against Your Own Prescriptions

Two people in the same town, with the same budget, can be offered the same set of Medicare drug plans and should choose differently — because they take different medications. That is the whole thing in one sentence. A Part D plan is not a product with a price; it is a price list, and which list is cheapest depends entirely on what you are buying from it.

Before you open a single plan, write down every prescription you take: the drug name, the dose, and how often. Include the ones you take seasonally and the one you have not refilled since spring. If a household is choosing together, write two lists — plans are chosen per person, and the best plan for one of you is frequently not the best plan for the other.

This sounds obvious and it is the step that gets skipped, because the plan listings are sorted by premium and the premium is right there. The list takes ten minutes and it is the only input that makes the comparison mean anything at all.

Part D has three stages, and knowing them is what lets you tell a cheap plan from a plan that is cheap in January.

• The deductible stage. You pay the full cost of your covered drugs until the deductible is met. Some plans have no deductible at all. For 2027 the most a plan is allowed to charge is $700.
• The initial coverage stage. You generally pay 25% of the cost as coinsurance on your generic and brand-name drugs.
• The catastrophic stage. Once your out-of-pocket spending on covered Part D drugs reaches the annual cap — $2,400 for 2027 — you pay nothing more for covered Part D drugs for the rest of the year.

That cap is worth pausing on, because it changes the shape of the risk. There used to be a long middle stretch where costs climbed again after the initial coverage ran out, and it is gone — spending on covered Part D drugs now has a ceiling. What is left to compare is how fast you get to that ceiling, and that is decided by the formulary.

A plan's list of covered drugs is called its formulary, and most plans sort that list into tiers — levels that carry different costs, with lower tiers generally costing you less. Two things follow from that.

First, a drug that is not on the list is not covered, and no premium saving compensates for paying full retail on a medication you take every day. Plans must include most drugs in certain protected categories — among them cancer and HIV/AIDS drugs, antidepressants, antipsychotics, anticonvulsants and the immunosuppressants used after an organ transplant — and each list has to include at least two drugs in the most commonly prescribed classes. Beyond that floor, plans choose what they offer.

Second, the list can change while you are on the plan. Medicare allows a plan to change its drug list during the year — when drug therapies change, a new drug is released, or new medical information becomes available. So "my plan covered it last year" is a reasonable expectation and not a guarantee, which is the real argument for re-checking every autumn rather than letting the plan roll over.

Being on the formulary is necessary and not always sufficient. Three restrictions can apply drug by drug, and each one is a reason a prescription that looks covered can still be refused at the counter.

• Prior authorization. You or your prescriber must get the plan's approval before it will cover certain drugs.
• Step therapy. A form of prior authorization that requires you to try a less expensive drug on the plan's list first.
• Quantity limits. Plans may cap how much of a drug they cover over a period, for safety and cost reasons.

None of these is automatically a reason to reject a plan — they are common, and a plan with a restriction on a drug you do not take is irrelevant to you. What matters is knowing which of your drugs carries one, and that there is a route out: you can ask the plan for an exception, and a tiering exception can get a drug charged at a lower cost level.

This one surprises people every year. If your plan has preferred in-network pharmacies, those pharmacies have agreed to charge less than other pharmacies in the same network. The identical prescription, on the identical plan, costs two different amounts depending on which door you walk through.

Outside the network it is worse: those pharmacies usually charge more, and in some situations you pay the full cost yourself. So the question is not only "is my pharmacy in the network" but "is my pharmacy a preferred one" — and if the answer is no, it is worth knowing what switching would save before you decide the plan is too expensive.

Medicare runs a free comparison tool at medicare.gov/plan-compare, and it does the one thing that matters: it lets you enter your own drugs and the pharmacies you would use, then shows an estimated total for the year — drug costs plus premium — rather than the premium alone. You can add several pharmacies and see the difference between them.

Two habits make it far more useful. Enter the doses, not just the drug names, because the dose changes the price. And sort by the estimated yearly total rather than by premium — the ordering flips more often than you would guess, and the plan at the top of the premium list is frequently nowhere near the top of the total-cost list.

There is a program for exactly this problem, and most people have never heard of it. The Medicare Prescription Payment Plan lets you spread your out-of-pocket Part D drug costs into capped monthly payments across the year, instead of paying them at the pharmacy counter as they fall. Every Part D plan has to offer it, taking part is voluntary, and there is no cost to join — you sign up through your own plan and they confirm it in writing.

One thing has to be said plainly, because the name invites the wrong conclusion: it does not save you money and it does not lower your drug costs. It changes when you pay. That is genuinely valuable if an expensive prescription lands in January and useless if the total for the year is what you cannot afford — in which case the thing to check is whether you qualify for Extra Help instead.

A reasonable-sounding decision causes a lot of avoidable damage: skipping drug coverage because you currently take no medications. Going 63 days or more in a row without creditable drug coverage triggers the Part D late enrollment penalty. It is calculated as 1% of the national base beneficiary premium — $41.33 for 2027 — times the number of full months you went uncovered, rounded to the nearest ten cents, and it is added to your premium for as long as you have Medicare drug coverage. Changing plans does not shake it off.

A year uncovered is a permanent 12% surcharge on a bill you will be paying in your eighties. People who qualify for Extra Help do not pay the penalty at all, which is another reason to check eligibility before deciding coverage is not worth it.

The Annual Enrollment Period runs October 15 to December 7, and the changes you make in that window start on January 1. If you would rather not do the drug-by-drug arithmetic yourself, send us your medication list and our licensed agents will run it against the plans available where you live — by phone or video, wherever you are, at no cost. We will also tell you when your current plan is still the right one, because that is frequently the answer.

Related reading: compare Medicare plans side by side, how to read your ANOC letter, or how to switch Medicare plans.