Medicare Part D has multiple cost phases throughout the year: the deductible phase, initial coverage phase, coverage gap (formerly the “donut hole”), and catastrophic coverage phase. As your total drug spending increases, your cost-sharing changes. Understanding how your medications move through these phases helps estimate your total annual prescription costs.

A formulary is the plan’s official list of covered medications. Drugs are placed into different tiers, with lower tiers typically costing less. Formularies can change annually, so reviewing your plan each year ensures your medications remain covered at a reasonable cost.

Yes. You can request a formulary exception if your prescribed medication is not covered. Your doctor must provide supporting documentation explaining why alternative covered drugs are not appropriate. Approval is not guaranteed, so reviewing plan formularies before enrolling is important.

Higher-income beneficiaries may pay an additional Income-Related Monthly Adjustment Amount (IRMAA) on top of their plan’s premium. This amount is determined by your income reported from prior tax years and is paid directly to Medicare, not the insurance company.

If you do not enroll in Medicare Part D when first eligible and do not have other creditable prescription drug coverage, you may face a late enrollment penalty. This penalty is added to your monthly premium and generally continues for as long as you have Part D coverage.