Best Medicare Part D Plans

Medicare Part D prescription drug plans are sold by private health insurance companies. They can help you cover the costs of your prescription drugs, but you will still have out-of-pocket costs that include copays and deductibles.

Stand-alone Medicare Part D plans can be coupled with Original Medicare to provide drug coverage. Part D plans may also be included as part of a Medicare Advantage Plan.

There are a total of 766 stand-alone Medicare Part D plans available in the United States in 2022, according to the Kaiser Family Foundation. Only a handful of plans are national. Others are more localized. But not all plans are available everywhere. Your options for Medicare Part D plans depend on where you live.

The average person on Medicare will have 54 Medicare plans with Part D drug coverage to choose from in 2022. That includes an average of 23 stand-alone Part D plans and 31 Medicare Advantage plans with Part D coverage.

Finding the best price on a Medicare Part D plan requires you to compare the plans that are available where you live. You’ll have to consider four factors that will affect the cost of different plans.

All these factors not only determine the cost of your monthly premium payments for a Part D plan, but they will also determine how much you’ll have to pay out-of-pocket for your medications.

Highest and Lowest Monthly Premiums for National Part D Drug Plans in 2022

The number of companies offering stand-alone Part D plans has been declining in recent years as drug coverage has been increasing through Medicare Advantage plans. Only 16 national firms offer stand-alone plans in 2022 — down from a high of 40 companies in 2010.

Average Cost Sharing for Medicare Part D Drug Plans in 2022

You will pay a much larger share of the costs of name brand and non-preferred drugs under national Medicare Part D drug plans in 2022. Non-preferred drugs can be both name-brand medications as well as generics.

Medicare Part D plans typically have five tiers of coverage, with your share of the cost lowest when you use the preferred drugs in the plan’s formulary. Preferred generics, generics and preferred brands typically have a dollar amount copay. Non-preferred and specialty drugs usually require you to pay a percentage of the drug’s cost as coinsurance.

The top-rated Medicare Part D drug plans share several common features. When comparing plans, you should weigh how these and other components of a Part D plan work for your needs and whether they save you money.

Remember, not all plans are available everywhere. Compare the plans available in your area to find the one that is both most affordable and features the qualities that best suit your needs.

All Medicare Part D plans are subject to the donut hole. But avoiding the donut hole — or Medicare Part D coverage gap — requires you to keep a watchful eye on how much you and your Medicare Part D plan are spending on prescription drugs.

You’ll also want to compare plans yearly before open enrollment — October 14 to December 7 each year — in case you need to move to a more cost-effective plan.

Once you and your plan spend a combined total of $4,430 on drugs in 2022, you enter what is known as the “donut hole.” It’s also called the Medicare Part D coverage gap.

Once you enter this donut hole, you are responsible for paying 25% of the costs for your medications.

You are responsible for this share of your medications until you hit the catastrophic coverage threshold — $7,050 out-of-pocket in 2022. Once you pay that much yourself, you only pay a 5% for the cost of your medications or $3.95 for generics and $9.85 for brand name drugs — whichever is greater.

Prior to 2019 when Congress closed the donut hole, you had to pay 100% of your medication’s cost.

A Medicare Part D drug plan should match your specific prescription drug needs. Taking the time to compare all the plans available in your area can save you hundreds of dollars.

Step 1: Ask Questions

You’ll need to know what drugs are covered, what pharmacies are in a plan’s network and a lot more information to make sure you’re getting the best plan for your needs.

Step 2: Include All Your Drugs When Comparing Plans

When comparing plans, make sure you list all your medications. Leaving off just one medication can cost you hundreds of dollars.

You’ll need to include the dosage of each medication, how many you take and how often you take each. You’ll want to find a Part D plan that covers as many of your medications and leaves you with the least cost sharing.

Step 3: Know Which Pharmacies the Plan Prefers Near You

Medicare Part D plans have preferred pharmacies. If you go to a pharmacy not on the plan’s list, you’ll have to pay more. If you have a favorite pharmacy, ask the pharmacist which plans have it on their preferred list.

You can also compare the plan’s price at your usual pharmacy to four other pharmacies in your area. Look for the lowest cost for both your premium and for your medications.

Step 4: Shop Early

It can take a while to find the best Medicare Part D plan for you. There’s only a short window of time when you can join a plan or switch to a better one. So, it pays to do your work early.

Also, be aware of late enrollment penalties. If you don’t sign up for a prescription drug plan when you’re first eligible, you might have to pay a penalty when you finally do enroll. The penalty gets bigger each month you go without coverage and is added to your plan’s monthly cost when you finally do enroll in a Part D plan.

Step 5: Check Your Eligibility for Assistance Programs

You may qualify for the Extra Help program if your annual income is limited to $20,385 for an individual or $27,465 for a married couple living together in 2022.

You can also contact your State Health Insurance Assistance Program (SHIP) toll free at 1-877-839-2675 or Medicare directly at 1-800-633-4227.

The most frequently asked questions about Medicare Part D prescription drug plans tend to involve availability, cost and selection.