Medicare Part D Explained: What You Need to Know (Plus 2025 Changes)
What Is Medicare Part D?
Medicare Part D is prescription drug coverage provided through private insurance companies approved by Medicare. You can get it either:
As a standalone plan (if you have Original Medicare)
As part of a Medicare Advantage plan (most include drug coverage)
It helps cover the cost of medications — both brand-name and generics — and protects you from high drug costs over time.
What Does Part D Cover?
Each Part D plan has its own formulary (list of covered drugs), but plans generally cover:
Prescription drugs your doctor prescribes
Common brand and generic medications
Drugs grouped into tiers (Tier 1 = cheapest, Tier 5 = specialty)
You’ll also get:
Access to a network of pharmacies
Mail-order options in most plans
💡 Always check the plan’s formulary and pharmacy list to make sure your medications are covered.
What Does Part D Cost?
Costs can vary, but you’ll typically pay:
Monthly premium (can be $0–$70+ depending on plan)
Annual deductible (some plans have none, max in 2025 is $590)
Copay or coinsurance based on drug tier
Extra charge if you’re a high-income earner (called IRMAA)
📌 What’s New in 2025: Big Changes to the Donut Hole and Drug Costs
Medicare drug coverage is changing in a BIG way in 2025:
✅ $2,000 Out-of-Pocket Cap – You’ll never pay more than $2,000 in prescription drug costs for the year, no matter what.
✅ Donut Hole Phased Out – The old confusing “coverage gap” is now gone. No more shifting into a new phase with higher costs.
✅ No More 5% Coinsurance in Catastrophic Phase – Once you hit the $2,000 cap, you pay $0 for the rest of the year.
✅ Smoother Spending with Monthly Payment Option – Starting in 2025, you can opt to pay your drug costs in monthly installments instead of big upfront payments.
These changes are part of the Inflation Reduction Act and are meant to make drug costs predictable and affordable.
When Can You Enroll in Part D?
Initial Enrollment Period – When you first become eligible for Medicare
Open Enrollment – October 15 to December 7 (change or enroll in a new plan)
Special Enrollment Periods – If you lose other coverage or move
⚠️ If you don’t enroll when first eligible, you could face a late enrollment penalty.
Part D vs. Drug Coverage in Medicare Advantage
Feature Part D (Standalone) Medicare Advantage w/ Drug Coverage Who Can Enroll Anyone with Original Medicare Only for those in Advantage plans Flexibility Pick your own plan Must use plan’s included coverage Pharmacy Network Varies by plan Usually tied to provider network Drug Formulary Set by plan Included in Advantage formulary
Is Part D Right for You?
You take regular prescriptions
You want protection from high drug costs
You prefer control over your drug plan
You have Original Medicare and need coverage
Then yes — a Part D plan could be a key piece of your Medicare coverage.
