How to Compare Part D Drug Plans Before You Enroll

What you're actually comparing in Part D plans

Part D plans differ in three concrete ways: which drugs they cover, how much you pay out of pocket, and which pharmacies you can use. You cannot compare them by price alone, because the same drug costs different amounts depending on which plan you choose and which pharmacy fills it. The only way to know which plan saves you money is to run your actual prescriptions through each plan's formulary — the official list of covered drugs — and see what your total costs would be.

Medicare provides a tool called the Plan Finder that does this work for you. You enter your medications, and it shows you the out-of-pocket cost for each plan in your area, ranked from lowest to highest. This is the comparison that matters. A plan that looks cheap in advertising might be expensive for your specific drugs.

Key Takeaways

• Use Medicare's Plan Finder tool to compare actual out-of-pocket costs for your specific medications, not advertised prices.
• Each plan has a formulary listing which drugs it covers and at what cost tier — some drugs may not be covered at all.
• Pharmacy networks vary by plan, so check whether your preferred pharmacy participates before you enroll.
• Part D plans change their formularies and costs every year, so you need to re-compare during the annual enrollment period even if you liked your plan last year.
• If a drug you need is not covered or is too expensive, you can request an exception from the plan, but this takes time and is not may provide.

How to use Medicare's Plan Finder

Go to Medicare.gov and select "Find Care Providers and Suppliers" or search directly for "Plan Finder." You will need your Medicare number, which is on your Medicare card. The tool asks for your zip code, your current coverage status, and your medications.

Enter each drug exactly as it appears on your prescription bottle — the generic name, the strength, and the quantity you take per month. If you do not know the generic name, your pharmacy can tell you, or you can search the drug name on the FDA website. The Plan Finder will not work correctly if you enter brand names when generics are available.

Once you submit your medications, the tool shows every Part D plan available in your area, ranked by your estimated out-of-pocket costs for a full year. The cost includes premiums, copays, and coinsurance. Scroll through the top options and note which plans appear consistently for your drugs. Then move to the next step: checking the pharmacy network.

Understanding formularies and drug tiers

A formulary is the list of drugs a plan will pay for. Not every drug is on every formulary. Some plans cover a drug but put it on a higher cost tier, meaning you pay more. Others do not cover it at all.

When you look at a plan's formulary on Medicare.gov, drugs are organized by tier. Tier 1 (generic) costs the least. Tier 2 (preferred brand) costs more. Tier 3 (non-preferred brand) costs even more. Tier 4 and 5 are specialty drugs and cost the most. A drug might be Tier 1 in one plan and Tier 3 in another.

If a drug you take is not on the formulary at all, the plan will not pay for it unless you request an exception. Requesting an exception means asking the plan's doctor to approve coverage for that specific drug. This can take one to two weeks, and the plan can say no. Do not assume a drug will be covered just because it treats your condition.

Checking pharmacy networks

Each Part D plan contracts with a specific network of pharmacies. Your local pharmacy might be in one plan's network but not another's. If your pharmacy is not in the network, you will pay full price for your prescriptions unless you switch pharmacies.

When you are looking at a plan on Medicare.gov, click "View Pharmacy Directory" or "Pharmacies in this plan's network." Search for your pharmacy by name or address. If it does not appear, call the pharmacy directly and ask which Part D plans they participate in. Some pharmacies participate in most plans; others are selective.

Mail-order pharmacies are also part of the network. If you use mail-order through your current pharmacy, check whether that option is available in the plans you are considering. Some plans cover mail-order at a lower cost than retail, which can save you money if you take maintenance medications.

What happens during the coverage gap

Part D has a coverage gap, sometimes called the "donut hole." Once you and your plan have spent a certain amount on covered drugs in a calendar year, you enter the gap. In the gap, you pay a higher percentage of drug costs until your out-of-pocket spending reaches a second threshold. Then catastrophic coverage kicks in and you pay much less again.

The gap amounts change every year. For 2024, the gap begins after combined spending of $5,850 and ends when your out-of-pocket costs reach $7,050. The exact amounts for your enrollment year are on Medicare.gov. Some plans offer better gap coverage than others, so this is another reason to compare.

If you take expensive medications and expect to hit the gap, factor this into your comparison. A plan with a higher premium might have better gap coverage and save you money overall. The Plan Finder shows your estimated costs including the gap, so you can see the full year's expense.

When to compare and how often to switch

Part D plans change their formularies and costs every January 1st. A plan that was cheapest for you last year might not be this year. Medicare's annual enrollment period runs from October 15 to December 7 each year. During this window, you can switch to a different Part D plan, and the new plan takes effect January 1st.

You should re-run your medications through the Plan Finder every October, even if you were happy with your current plan. Switching plans is free and takes about 10 minutes online. There is no penalty for switching, and you can switch every year if you want to.

If you miss the October-December window, you cannot switch Part D plans until the next October unless you have a may have access to life event — moving to a new state, losing employer coverage, or becoming newly may be able to access for Medicare. If you miss the deadline and your plan becomes unaffordable, you will be stuck until the next enrollment period.

What to do if your drug is not covered or is too expensive

If a drug you need is not on a plan's formulary, or if it is on a high cost tier, you have two options: request an exception from the plan, or choose a different plan that covers the drug at a lower tier.

To request an exception, contact the plan directly and ask for a "formulary exception" or "coverage information." You will need your doctor to write a letter explaining why this specific drug is medically necessary for you. The plan's medical team reviews the letter and decides whether to approve the exception. This usually takes 5 to 14 days. If the plan says no, you can appeal, but appeals take longer.

The faster route is usually to choose a plan that already covers the drug. Run the Plan Finder again and look at plans where your drug is on a lower tier. Compare the total out-of-pocket cost for the year, including the premium. Sometimes a plan with a higher premium has lower drug costs that make up the difference.

Frequently Asked Questions

Can I change Part D plans outside of the October enrollment period?

Only if you have a may have access to life event: you move to a new state, you lose employer coverage, you become newly may be able to access for Medicare, or your plan leaves the market. If none of these apply, you must wait until October 15 to switch. If your situation changes, call Medicare at 1-800-MEDICARE to report it and ask whether you can switch early.

What if I cannot afford my Part D premiums?

You may be able to get help through the Low-Income Subsidy program, which reduces or eliminates Part D premiums and out-of-pocket costs based on your income. Contact your local Social Security office or call 1-800-MEDICARE to learn whether you may have access to. Income limits vary by state.

Do generic drugs always cost less than brand-name drugs in Part D plans?

Usually, but not always. A generic drug on Tier 1 costs less than a brand-name drug on Tier 3. However, a generic drug on Tier 3 might cost more than a brand-name drug on Tier 2 in the same plan. This is why you must check your specific medications in the Plan Finder rather than assuming based on generic versus brand.

What if my doctor prescribes a brand-name drug when a generic is available?

Most Part D plans will not pay for the brand-name version if a generic exists, unless your doctor requests a "brand medically necessary" exception. Your doctor can submit this request to the plan. If approved, the plan will cover the brand-name drug. If not approved, you pay the full price or ask your doctor to switch you to the generic.

How do I know if my pharmacy is in a plan's network?

Search the pharmacy directory on Medicare.gov for each plan you are considering, or call your pharmacy directly and ask which Part D plans they participate in. Some pharmacies participate in all or most plans; others are selective. If your preferred pharmacy is not in a plan's network, that plan will cost you more.