Medicare “Part D” for prescription drug coverage

The Medicare Part D program is complicated. Here, we’ll break it down into segments. Although Medicare does not require you to enroll in Part D prescription drug coverage, you may pay a late-enrollment penalty if you sign up later after going without creditable prescription drug coverage. As a result, enrolling when you are first eligible is generally recommended because most people will need prescription drug coverage at some point.

There are two ways to receive Medicare Part D prescription drug coverage:

1. If you have a Medicare supplement (Medigap) plan that works with Original Medicare Parts A and B, you also need to enroll in a stand-alone Medicare Part D Prescription Drug Plan (PDP) to cover your medications. Your health insurance card will be separate from your pharmacy card and may be issued by different insurance companies. (Two cards.)

2. If you have a Medicare Advantage Prescription Drug (MAPD) plan, it replaces Original Medicare Parts A and B and includes Part D prescription drug coverage. With this plan, your health insurance card also serves as your pharmacy card. (One card.)

Regardless of which option you choose, you should review your Part D coverage during the annual enrollment period, Oct. 15 through Dec. 7, to make sure it still meets your needs. Why? Insurance companies often change premiums and formularies from year to year. As a result, a plan that was once a good fit may no longer be the best choice.

For 2026, these plans have a $615 annual deductible, which generally applies to higher-tier medications. There is also a true out-of-pocket (TrOOP) limit of $2,100. Once you reach that limit, covered medications cost $0 for the remainder of the year. If you take several medications and expect to reach the $2,100 limit, your pharmacist may be able to help you arrange a payment plan to spread those costs more evenly throughout the year.

Keep in mind that if a medication is not on your plan’s formulary, the amount you spend on that medication will not count toward your TrOOP limit.

Medicare Extra Help (Low-Income Subsidy)

If paying for prescription medications feels overwhelming, Medicare’s Extra Help program may provide financial assistance. Also called the Low-Income Subsidy (LIS), Extra Help is a federal program that helps eligible Medicare beneficiaries pay for Medicare Part D prescription drug coverage. It can reduce costs such as monthly premiums, annual deductibles and prescription copayments.

Eligibility is based on income and assets. In general, you may qualify if your income is below certain limits, which can change from year to year, and your financial resources, such as savings or investments, are within the program’s limits. Your home and primary vehicle are not counted.

Applying is easy at www.ssa.gov/extrahelp.

Even if you’re not sure you qualify, it’s worth applying. Many people are surprised to learn they are eligible, especially those with modest savings or a fixed income.

Nanette Makrauer is an independent insurance broker and Certified Medicare Advisor residing in Bluffton. To connect visit www.health-wealth-insurance.com or email nanette@health-wealth-insurance.com.