How Part D plans differ
Every Part D plan has its own formulary — the list of covered drugs and what tier each is on. The same medication can be a $5 copay (Tier 1) on one plan and a $200 copay (Tier 4) on another — or not covered at all.
Plans also differ in: monthly premium, annual deductible, retail pharmacy network, mail-order option, and tier copay structure.
There are 30+ standalone Part D plans available in most counties, plus the Part D coverage bundled into MA-PD plans. Picking blindly is expensive — ranking against YOUR specific drug list is the only way to get this right.
The 2026 Part D structure
Part D in 2026 has three phases:
(1) Deductible phase: you pay 100% of your drug costs until you hit the plan's deductible (up to $590; some plans have $0 deductible).
(2) Initial coverage phase: you pay your tier copay/coinsurance until your total out-of-pocket plus what the plan paid hits a threshold.
(3) Catastrophic phase: once you've paid $2,100 out-of-pocket in 2026, your drug costs are $0 for the rest of the year. This OOP cap was created by the Inflation Reduction Act (2022) and is a HUGE change from prior Part D.
The pre-IRA donut hole — why this matters historically
Before the IRA changes, Part D had a 'coverage gap' (the donut hole) where you paid 25-100% of drug costs after a certain spending threshold. People on expensive drugs could spend $10,000+ per year out of pocket.
The IRA closed the donut hole and capped catastrophic spending. The 2026 $2,100 OOP cap is a hard ceiling — even on a $200,000/year specialty drug, you pay $2,100 and the rest is on the plan + government.
What changed strategically: high-cost-drug seniors should look HARDER at premium. Before, low-premium plans saved money in healthy years. Now that catastrophic costs are capped, you can run the actual math against your drugs without worrying about runaway exposure.
Tier structures and what they mean
Most plans have a 5-tier structure:
Tier 1 — Preferred generics. Low or $0 copay. ~$1-$5.
Tier 2 — Generics. ~$10-$15 copay.
Tier 3 — Preferred brand. ~$45 copay or 25% coinsurance.
Tier 4 — Non-preferred drug. ~$95 copay or 40-50% coinsurance.
Tier 5 — Specialty. 25-33% coinsurance, often capped.
Same drug can be on different tiers across plans. Eliquis (a common blood thinner) might be Tier 3 on one plan and Tier 4 on another — same insurance company, same drug, $50/month difference.
Mail-order and 90-day fills
Most Part D plans offer mail-order pharmacies (CVS Caremark, Express Scripts, OptumRx, etc.) for maintenance medications. Mail-order is typically 90-day supply for the price of 60 days at retail. Effectively a 33% discount.
Standard 90-day fills at preferred retail pharmacies (some plans have 'preferred' pharmacies — Walgreens, CVS, Walmart, Costco often) also offer 90-day pricing at lower copays than 30-day fills.
Strategy: look at your top maintenance drugs (statins, blood pressure, blood thinners). Get them on 90-day fills via mail-order or preferred retail. Just doing this often saves $300-600/year on a typical drug list.
Annual review — formulary changes
Every October, Medicare's annual open enrollment (Oct 15 - Dec 7) lets you change Part D plans for the next year. This matters because: plan formularies change every year. Your $5 Tier 1 drug might be a $45 Tier 3 drug next year. Plans get added and dropped from the network.
The single best annual habit: every October, run YOUR drug list against ALL Part D plans in your zip code. If a different plan would save money, switch. Most people lose hundreds per year by sticking with the same plan when a cheaper option exists for them.
Standalone vs MA-PD — when to switch
If you're on Original Medicare + Medigap, you need a standalone Part D. Pick whichever ranks lowest total cost against your drugs.
If you're on an MA-PD plan, the drug coverage is bundled in. You can't add a standalone Part D. So your choice is: pick the right MA plan that has both the medical coverage you want AND a formulary that prices your drugs well.
If you're on MA-PD and your drugs aren't well-covered: open enrollment is your chance to switch to a different MA plan, OR to switch to Original + Medigap + standalone Part D. Run BOTH paths through the comparison tool to see which wins.