What You Need to Know About Medicare Part D Drug Coverage

What the private plans pay for, what they cost and what to expect when you use them

7-minute read

Article 8 out of 11 in Medicare Parts

Kimberly Lankford and Dena Bunis,

Updated September 10, 2026

AARP

Reviewed by

Leigh Purvis, MPA

En español

Updated September 10, 2026

The Voorhes/Gallery Stock

Key takeaways

Most retail prescriptions are covered under Part D.
A few classes of drugs aren’t part of coverage.
Premiums vary widely, but other costs are capped.
You can get help with your Part D expenses.
Sign up for Part D even if you take no prescriptions.

You may not remember a time when Medicare left you on your own to pay for prescription drugs.

2026 marked Medicare Part D’s 20th anniversary. Congress took about 40 years to enact this coverage, which can be added as a stand-alone benefit to original Medicare or rolled into Medicare Advantage plans.

This insurance helps pay for prescriptions you take yourself, whether it’s antibiotics for a short-term infection or medications you’ll need for the rest of your life, such as blood pressure pills. The program used to include complicated phases, with Part D enrollees going in and out of a gap in coverage commonly called the donut hole, which required you to pay thousands of dollars in drug costs before catastrophic coverage would take effect.

But since 2025, Part D has been simplified. In 2026, once you hit a $2,100 out-of-pocket spending limit that includes deductibles, copayments and coinsurance for covered drugs in your stand-alone Part D plan or one folded into Medicare Advantage, you won’t pay any more for your prescriptions for the remainder of the year.

The cap, which AARP supported as part of the Inflation Reduction Act of 2022, rises each year along with other parts of the Part D benefit, such as the deductible.

What does Part D cover?

Part D helps pay for a vast array of prescription medicines that you take at home, in contrast to drugs covered under Medicare Part B that are infused in a doctor’s office or outpatient setting. On average, enrollees in stand-alone Part D plans have access to two-thirds of the drugs available through Part D. Medicare Advantage plan participants with drug coverage have access to about 7 in 10 of the medications.

Medicare regulations require insurers that offer Part D to include all or almost all the medicines in these classes, even if few enrollees will use them. And they can’t require prior authorization or step therapy, tools insurers often use to limit access to medications, for patients already taking these drugs:

Anticonvulsants used in part to treat epilepsy and other seizure disorders
Antidepressants for mental health
Antipsychotics used to treat delusions and hallucinations
Cancer drugs
HIV/AIDS drugs
Immunosuppressants for organ transplants

Insulin received special treatment in the Inflation Reduction Act, a $35-a-month out-of-pocket cap. Injectable insulin is covered under Part D; insulin delivered via a durable insulin pump falls under Part B.

And some forms of insulin are even less expensive. Fiasp and NovoLog, brands of insulin pens, were part of the first group of 10 high-cost drugs selected for Medicare price negotiations.

Most Popular

All vaccines that the federal Advisory Committee on Immunization Practices recommends for adults are free.

They include vaccines for chicken pox; measles, mumps and rubella (MMR); respiratory syncytial virus (RSV); and shingles. Covered under Part B are COVID-19, flu and pneumonia as well as hepatitis B for people at increased risk. Also covered are rabies and tetanus shots needed because of an injury or direct exposure.

What Part D doesn’t cover

Some medications are excluded from Part D coverage, specifically prescriptions that aren’t on a particular plan’s drug list, called a formulary. Pharmaceuticals used for these conditions also aren’t covered:

Coughs and colds
Erectile dysfunction
Fertility
Hair growth or other cosmetic uses
Weight gain or weight loss

You’ll have to buy over-the-counter medicines and prescription-strength vitamins and minerals yourself, with a few exceptions. Coverage of some brand-name drugs that require monitoring or tests from the same company also will be rejected.

What about GLP-1s? GLP-1s used exclusively for weight loss won’t be included in Part D coverage without a change in federal law. For now, a pilot program through 2027 that operates outside of Part D allows Medicare enrollees with drug plans to pay $50 a month out of pocket for certain injections or tablets.

That $600 a year won’t count toward your Part D annual spending limit.

Covered elsewhere. When you’re a hospital inpatient, medicines you receive are generally paid for through Part A. And the drugs you get via infusion or other means in a doctor’s office or outpatient center have Part B coverage.

The costs you pay for Part D

Premium. If you have original Medicare and buy a stand-alone Part D prescription plan, you’ll pay a premium that averages $36 a month in 2026. But monthly plan premiums range in price from zero to more than $125.

If you choose a Medicare Advantage plan with drug coverage, you won’t have a specific Part D premium. Any premium beyond the usual Part B that you’re charged will be for all of your Part A, Part B and Part D coverage.

High-income surcharge. About 1 out of every 12 people with Part D pay more than the standard premium because their modified adjusted gross income, as reported on their latest tax return, is above a certain threshold.

The surcharge, called an income-related monthly adjustment amount (IRMAA), sometimes surprises recent retirees because it is calculated based on income from two years ago, when they likely were working. Income from the 2024 tax return, filed in 2025, determines what’s paid in 2026.

If you retired, were laid off or had a significant reduction in income since that return was filed, you can request the charge be lowered or eliminated.

Deductible. Some plans charge a deductible, while others don’t. Medicare sets a maximum amount each year. In 2026, it’s $615; some plans set their deductible lower.

Copayments. Copays, more common in Part D for lower-cost medications than coinsurance, are a flat fee you’ll owe each time you fill a prescription for a covered drug. The fee can vary based on the pricing tier.

Many plans allow you to fill prescriptions on their preferred generic drug list, often medicines you take to keep chronic conditions under control, at no charge. Even generics in their next level of pricing have median copays of $10 or less.

Nearly all Part D enrollees are in plans with five price tiers:

Tier 1, preferred generic drugs
Tier 2, other generic drugs
Tier 3, preferred brand-name drugs
Tier 4, non-preferred drugs
Tier 5, specialty drugs

Coinsurance. Rather than a fixed-dollar copay, some plans require you to pay a percentage of the cost of medications in certain pricing tiers, called coinsurance. That happens more often in the higher tiers, where the overall costs are higher.

Coinsurance rates can range from about 20 percent to close to 40 percent for brand-name and specialty drugs in both stand-alone Part D plans and those rolled into Medicare Advantage plans.

Spending limits. Your out-of-pocket costs, excluding premiums, are capped at $2,100 in 2026, $2,400 in 2027.

How to get help with Part D expenses

Medicare’s Extra Help program for people whose assets and incomes are limited can help you with Part D premiums and out-of-pocket costs. If you qualify for the program, you’ll have no premiums or deductible for covered medications, and you’ll pay no more than $5.10 per fill for generics and $12.65 for brand-name drugs.

You can get financial assistance for stand-alone Part D plans or those that are part of Medicare Advantage plans. You apply through the Social Security Administration.

If your resources are too high for Extra Help, you can consider applying for the Medicare Prescription Payment Plan, which will help you spread out what you owe through the remaining months of a year. It won’t reduce your payments, but you won’t be charged interest on the installments.

When to sign up for Part D

Enrolling in Part D is voluntary, but consider buying a plan even if you don’t take any prescription medications now.

You can enroll if you have Medicare Part A or Part B. But if you don’t have other drug coverage considered at least as good as Part D, you may have to pay a late enrollment penalty if you go 63 consecutive days or more without prescription insurance that qualifies.

This other “creditable coverage” can come from an employer or former employer, Tricare military health care, the Department of Veterans Affairs or another source. Your plan should send you a notice each September telling you if it qualifies.

Join our fight to protect Medicare

AARP is working to keep Medicare strong. Here’s how you can help.

Sign up to become an AARP activist for the latest news and alerts on issues you care about.
Find out more about how we’re fighting for you in Congress and across the country.
See the latest AARP research on Medicare, including “How Stronger Medicare Drug Price Negotiation Could Lower Spending.”
AARP is your fierce defender on the issues that matter to people 50-plus. Become a member or renew your membership today.

%{postComment}%

This story, originally published Aug. 8, 2018, has been updated with additional details on what Part D does and doesn’t cover, financial aid and other information.

About the authors

Kimberly Lankford is a contributing writer who covers Medicare and personal finance and now writes about insurance for The Wall Street Journal | Buy Side. She wrote about insurance, Medicare, retirement and taxes for more than 20 years at Kiplinger Personal Finance and has written for The Washington Post and The Boston Globe. She received the personal finance Best in Business award from the Society of American Business Editors and Writers and the New York State Society of Certified Public Accountants’ excellence in financial journalism award for her guide to Medicare.

Dena Bunis covered Medicare, health care, health policy and Congress. She also wrote the Medicare Made Easy column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for The Orange County Register and as a health policy and workplace writer for Newsday.

About the reviewer

Leigh Purvis , prescription drug policy principal at the AARP Public Policy Institute, is also chairman of the governance board for the nonprofit Institute for Clinical and Economic Review, has held a variety of health care policy positions at AARP for more than 20 years, and previously worked at the American Psychological Association. She earned her master’s degree in public administration and policy from George Mason University and has a certificate in gerontology from the University of Washington.