Most add-ons are “nice to haves.” If you ask for a burger at the drive-thru, the order-taker might ask you if you want fries with that. Not necessary, but nice to have. If you buy a car, the salesman might ask if you want the optional upgraded sound system. Not necessary, but nice to have.
Technically speaking, Medicare Part D isn’t a necessary add-on—your local drugstore absolutely will sell you prescription drugs without it. On the other hand, the costs involved with forgoing Part D or other prescription coverage might be too high for you to bear, making it more than just “nice to have.”
Today, I want to introduce you to Medicare’s “optional” coverage: Part D prescription drug coverage. I’ll show you how Part D works, what it costs, and when you can enroll. This information should help you decide whether Part D makes sense for you.
The information and analysis contained within this article appears for your consideration, but it does not constitute individualized financial advice. Always act at your own discretion.
How Does Medicare Part D Work?
Medicare Part D, which helps pay for self-administered prescription drugs, is optional coverage offered by private insurers. You must be enrolled in Medicare Part A or Medicare Part B to be eligible for Part D.
You can’t enroll in Part D if you’re enrolled in Medicare Part C (aka Medicare Advantage). Part C plans often include drug coverage, but if you choose a Part C that doesn’t pay for prescriptions, you can’t augment your coverage with Part D.
How Much Does Medicare Part D Cost?
The average estimated monthly premium for standalone Part D is about $34.50 in 2026. However, monthly Part D premiums are largely based on the price the private insurer sets.
Part D also has an Income-Related Monthly Adjustment Amount (IRMAA) in the form of an added-on set dollar amount, which is based on the modified adjusted gross income (MAGI) from your tax return two years ago. This is paid in addition to your plan’s premium, but very few enrollees are subject to IRMAA. Right now, it’s only around 8%.
For 2026, enrollees don’t need to worry about IRMAA if they fall into either of the following categories:
- Individuals with a MAGI of $109,000 or less
- Married couples filing jointly with a MAGI of $218,000 or less
For people with higher incomes, the IRMAA currently maxes out at $91. The maximum adjustment currently applies to the following:
- Individuals with a MAGI of $500,000 or more
- Married couples filing jointly with a MAGI of $750,000 or more
Related: 10 Things Original Medicare Doesn’t Cover
Are you married but file separately? Then you pay the applicable option below:
- If your MAGI is $109,000 or less, you just pay your plan premium.
- If your MAGI is more than $109,000, but less than $391,000, then you pay your premium + $83.30.
- If your MAGI is $391,000 or higher, you pay your premium + $91.00
Your Part D premiums can be taken straight out of your Social Security check, charged to a credit or debit card, deducted from a savings or checking account, or billed by mail and paid for via check.
Can’t afford Part D right now? Consider looking in the Extra Help program, which provides low-income beneficiaries with financial help for Part D costs, including premiums, coinsurance, and deductibles. People get Extra Help automatically if they get one of the following:
- Full Medicaid coverage
- Social Security Income (SSI) benefits
- Help from their state paying Part B premiums
Those who don’t get Extra Help automatically can set up an appointment to apply by calling 1-800-772-1213, or if you’re deaf or hard of hearing, TTY 1-800-325-0778.
Related: Medicare FAQs: Your Questions Answered
What About Deductibles and Coinsurance?
Part D works in three stages: deductible stage, initial coverage stage, and catastrophic stage.
In the deductible stage, the enrollee pays all out-of-pocket costs up to the deductible, if there is one. For 2026, deductibles are capped at $615.
Once you meet the deductible, you enter the initial coverage stage. At this point, you pay 25% of the drug’s cost as coinsurance.
After your out-of-pocket spending on coverage reaches the annual cap, which is $2,100 in 2026, you enter the catastrophic stage. In the catastrophic stage, you no longer pay any out-of-pocket costs on covered Part D drugs for the rest of the calendar year.
Related: Healthcare Costs in Retirement [Amounts & Types to Expect]
When Do You Enroll in Medicare Part D?
There are several Medicare enrollment periods relevant to Part D, including the Initial Enrollment Period, General Enrollment Period, Special Enrollment Periods, Open Enrollment Period, and Medicare Advantage Open Enrollment Period.
- Your Initial Enrollment Period (IEP) begins three months before you turn 65 and ends three months after the month you turn 65. The exception is if your birthday lands on the first of the month. Then, your IEP starts four months before you turn 65 and ends two months after the month you turn 65. The IEP applies to all of Medicares “Parts.”
- The General Enrollment Period (GEP), from Jan. 1 through March 31, is specifically meant for enrolling in Parts A and/or B. However, if you enroll in Part B for the first time during the GEP, it opens up a two-month Special Enrollment Period (SEP) during which you can enroll in Part D.
- Special Enrollment Period (SEPs) can also be triggered by other events, such as losing Medicaid coverage or dropping out of an employer plan. Also, any time a person signs up for Part A or Part B during a SEP, they usually have two months to join a Part D plan.
- The Open Enrollment Period (OEP) runs each year from Oct. 15 to Dec. 7. Throughout this period, people can enroll in, change, or drop Part C and/or Part D plans.
- The Medicare Advantage Open Enrollment Period (MA-OEP), which only applies to those who are currently in a Medicare Advantage plan, spans Jan. 1 to March 31 each year, as well as the first three months in which you get Medicare. During this time, you can switch to another Medicare Advantage plan or—more germane to the topic at hand—return to Original Medicare and enroll in a Medicare Part D drug plan.
Related: 14 Ways to Lower Medicare Costs in Retirement
Should I Get Medicare Part D?
If you take prescriptions, it likely makes sense to sign up for Medicare Part D.
Of course, even if you don’t currently have any maintenance prescriptions, you can’t really predict when you might develop a medical condition that necessitates expensive drug treatment. And because you can only sign up for Part D during certain timeframes, you might be temporarily stuck paying full price for costly medicines. So Part D might be a safety net worth paying for.
Per the Medicare Prescription Drug Program (Part D) Status report from March 2024, multiple survey results found that Part D beneficiary satisfaction is over 90%, and more than 80% of those enrolled say that Part D plan costs are reasonable.
