Guide to Medicare Part D: Prescription Drug Plans

Written by Tyler Dalton, PharmD
Medicare-focused clinical pharmacist.
14 years experience counseling seniors on drug-cost optimization.
NPI: 1235678901  |  Member, American Pharmacists Association

Your medication costs just got more predictable.

Thanks to major Medicare Part D changes in 2025, seniors nationwide now have an annual out-of-pocket cap of $2,000. No more surprise pharmacy bills. No more rationing medications.

But here’s what nobody tells you: choosing the wrong Part D plan can still cost you hundreds even with the new protections.

Medicare Part D phase chart 2025

Why Medicare Part D Matters More Than Ever

The average American senior takes 4.2 prescription medications monthly. Without Part D coverage, those medications could cost $400+ per month.

Medicare Part D isn’t just insurance. It’s your financial shield against rising drug costs nationwide.

What Changed for 2025?

Good news first: The Medicare Part D “donut hole” is gone. Completely eliminated.
Previously, seniors hit a coverage gap where they paid 25% of drug costs. Not anymore. Once you spend $2,000 out-of-pocket, your Medicare Part D plan covers 100% of prescription costs for the rest of the year.

Even better: You can now spread that $2,000 across monthly payments instead of paying large amounts upfront.

How Medicare Part D Works

Think of Part D coverage as moving through three phases:

National Part D Plan Options for 2025

Most states offer 19 to 27 standalone Part D plans. Monthly premiums range from $7 to $200+.

Real Medicare Part D Costs Nationwide

Here’s what seniors actually pay:

Remember: These are averages. Your costs depend entirely on which medications you take and which plan you choose.

Who Qualifies for Medicare Part D?

Anyone with Medicare Part A or Part B can enroll in Part D. Period.

When to Enroll?

Extra Help Programs

Low-income seniors may qualify for Extra Help, covering: Monthly premiums up to $46.50 Annual deductibles Reduced copays ($1.55 for generics, $4.60 for brand names)

Many states also offer additional prescription assistance programs that work alongside Medicare Part D.

Choosing Your Plan: The Smart Way

Want to see real numbers for your ZIP code?

Use our free comparison tool to view 2025 Part D and Medicare Advantage plans side by side.

Launch Custom Search

Tool provided by SunFire Matrix. No contact info required to browse plans.

Common Medicare Part D Misconceptions

Pharmacy Networks That Matter

Preferred pharmacies nationwide offer lower copays:

CVS/Target: Extensive network coverage Walgreens: Strong rural and urban presence
Walmart: Competitive pricing nationwide Costco: Often lowest prices for cash-paying customers Independent pharmacies: Personalized service but check network status

Mail-order pharmacies can save 10-15% on 90-day supplies for maintenance medications.

What Part D Doesn't Cover

Medicare Part D won’t pay for:

Over-the-counter medications (unless prescribed) Vitamins and supplements Medical devices Medications covered by Part A or Part B Cosmetic products Medications purchased outside the United States.

Medicare Part D vs. Medicare Advantage

Standalone Part D plans work with Original Medicare. You choose separate plans for medical coverage (Original Medicare + Medigap) and drug coverage (Part D).

Medicare Advantage with drug coverage bundles everything together. Most Medicare Advantage plans include Part D coverage, but check the formulary carefully.

Can’t have both: You cannot enroll in a standalone Part D plan if you’re in a Medicare Advantage plan that includes drug coverage.

Making Your Part D Decision

Bottom line: The best Medicare Part D plan is the one that covers YOUR medications at YOUR preferred pharmacies for the lowest total annual cost.

Don’t let choice paralysis cost you money. The wrong decision costs seniors an average of $847 annually.

Take action during these enrollment periods:

New to Medicare: Enroll during your 7-month Initial Enrollment Period Current beneficiaries: Review plans every October 15 to December 7 Life changes: Use Special Enrollment Periods when eligible

Plan Comparison Strategy

Compare these factors:

Red flags to avoid:

Plans that don’t cover your most expensive medications Networks that exclude your preferred pharmacy Plans with excessive prior authorization requirements.

Your Next Steps

Medicare Part D isn’t just about saving money on prescriptions. It’s about removing the financial stress that keeps seniors from taking medications as prescribed.

Ready to find your ideal Part D plan?

Start with Medicare.gov’s Plan Finder tool. Enter your ZIP code and medications to see personalized cost comparisons.

Want to compare Part D and Medicare Advantage Prescription Drug (MAPD) plans? Use our custom plan comparison tool to see all available options in your area and get personalized recommendations based on your specific medications and pharmacy preferences.

Still overwhelmed? Contact a local Medicare specialist for free help. They’ll analyze your specific medications, compare all available plans, and show you exactly what you’ll pay with each option.

Your medications are too important to leave to chance. The right Part D plan can save you hundreds while ensuring you get the prescriptions you need.

For more information, visit Medicare.gov’s official Part D page or use their Plan Finder tool to compare plans in your area.

Citation sources

  • CMS Final Rule CY 2025 (published April 12 2024)
  • Kaiser Family Foundation Medicare Part D Data 2025
  • Medicare.gov 2025 Plan Landscape File (downloaded May 2025)

Content last reviewed May 30 2025 by Tyler Dalton, PharmD.

Frequently Asked Questions About Medicare Part D

What happens if I don't enroll in Medicare Part D when I'm first eligible?

You’ll face a lifetime late enrollment penalty if you go 63 or more days without creditable prescription drug coverage. The penalty equals 1% of the national average premium for each month you delayed enrollment. This penalty never goes away as long as you have Medicare Part D.

Can I use any pharmacy with my Medicare Part D plan?

Not necessarily. Each Part D plan has its own pharmacy network. You can use out-of-network pharmacies, but you’ll pay significantly more. Most plans include major chains like CVS, Walgreens, and Walmart, plus many independent pharmacies. Always check if your preferred pharmacy is in-network before enrolling.

What's the difference between a formulary and a pharmacy network?

A formulary is your plan’s list of covered medications. A pharmacy network is the list of pharmacies where you can fill prescriptions at contracted rates. Both matter for your costs. A medication might be on the formulary but cost more at an out-of-network pharmacy.

Can I change my Medicare Part D plan if I'm not happy with it?

Yes, but only during specific enrollment periods. The main opportunity is during Annual Open Enrollment (October 15 to December 7). You can also change during Special Enrollment Periods if you qualify due to circumstances like moving or losing other coverage.

Do Medicare Part D plans cover specialty medications for conditions like cancer or rheumatoid arthritis?

Most Part D plans cover specialty medications, but they’re typically placed in higher tiers (Tier 4 or 5) with higher costs. Many require prior authorization or step therapy. If you need specialty drugs, carefully compare plans’ formularies and consider the total annual cost, not just monthly premiums.

Sources

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Drug coverage, Medicare. Accessed June 2025. https://www.medicare.gov/drug-coverage-part-d
  2. How Medicare Prescription Drug Coverage Works with a Medicare Advantage Plan or Medicare Cost Plan, Medicare. Accessed June 2025. https://www.medicare.gov/Pubs/pdf/11135-prescription-drug-coverage-with-ma-mcp.pdf