How do I compare Medicare Part D drug plans?

Why premium is the wrong starting point

Part D plans advertise monthly premiums, and some advertise a premium of zero. That number tells you almost nothing about what the plan will cost you.

What decides your cost is which of your specific medications the plan covers, at which tier, at which pharmacy. A plan with no premium that places one of your drugs on a high tier can cost more across a year than a plan charging forty dollars a month that covers it well.

The comparison that matters is total annual cost for your actual drug list.

The 2027 structure

Every Part D plan works in three stages, and two of the numbers are set by Medicare rather than the carrier.

Deductible stage. You pay full cost until you meet the plan's deductible. No plan may charge more than $700 in 2027, and some charge nothing.

Initial coverage stage. You pay 25% coinsurance on generic and brand-name drugs.

Catastrophic stage. Once your out-of-pocket spending on covered Part D drugs reaches $2,400, you pay nothing for covered Part D drugs for the rest of the calendar year.

That cap changes how you should compare. If your medications are expensive enough that you will reach $2,400, the question is how cheaply you get there, not what the premium is.

The method

Write down every medication with exact dosage and frequency. Include generics. Dosage matters because tiers and quantity limits are dose-specific.

Note your pharmacy. Plans have preferred and standard networks. The same drug on the same plan routinely costs more at a standard pharmacy than a preferred one, and mail order can differ again.

Run your list against each plan available in your county. Note for each drug: is it covered, at what tier, and does it need prior authorization or step therapy?

Add it up across twelve months. Premium times twelve, plus deductible, plus your share of each drug. Now the plans are comparable.

What to watch for beyond price

Prior authorization. The plan will cover the drug but requires approval first. Not a denial, but a delay, and worth knowing before January.

Step therapy. You must try a cheaper alternative before the plan covers your current drug. This can mean changing a medication that is working.

Quantity limits. Caps on how much is covered per fill or per month.

Drugs not on the list at all. If a medication is excluded, you pay full retail. For some drugs that is the entire decision.

The mistake that costs the most

Choosing a zero-premium plan without checking the formulary.

Zero-premium plans exist and some are genuinely good. But a plan has to make its economics work somewhere, and a low premium often pairs with a narrower formulary or a higher-tier placement for brand-name drugs. For someone taking only common generics, that may never matter. For someone on a brand-name or specialty medication, it can cost thousands.

Ten minutes checking the drug list is the highest-return ten minutes in Medicare.

If your plan is bundled into Medicare Advantage

Many Medicare Advantage plans include drug coverage, which means the drug formulary is part of a package you are also choosing for its medical network.

That makes the comparison harder, because a plan can have an excellent network and a poor formulary for your particular drugs, or the reverse. Both halves need checking. The full list of what you can change is in what you can change during Annual Enrollment.

The penalty for skipping drug coverage

If you go without creditable drug coverage for 63 days or more after you were first eligible, a late enrollment penalty applies. It is 1% of the national base beneficiary premium, $38.99 in 2026, multiplied by the number of full uncovered months, and it is added to your premium for as long as you have Part D.

This is why joining a low-cost plan while you take few medications is usually sensible. It is insurance against both drug costs and the penalty. More detail is in the Medicare late enrollment penalty.

When to do this

Annual Enrollment runs October 15 to December 7, and changes take effect January 1. Formularies for the coming year are published in advance, so the comparison can be done properly in late October rather than rushed in early December.

Your plan's Annual Notice of Change, which arrives in September, tells you what moved. That document is covered in why did my Medicare plan change for next year.

A worked example

Someone in Charlotte takes four medications: three common generics and one brand-name drug for an autoimmune condition.

Plan A has a $0 premium. Plan B costs $42 a month. On premium alone, Plan A wins by $504 across the year.

But Plan A places the brand-name drug on its highest tier and requires prior authorization. Plan B covers it on a mid tier with no authorization needed. Once the year is totalled, Plan B costs less and involves no approval delays.

The generics are essentially identical on both plans and contribute nothing to the decision. One drug decided everything, and it was invisible on the premium line.

This pattern is ordinary rather than unusual. If you take even one brand-name or specialty medication, that drug will usually decide your plan.

What the out-of-pocket cap changes

The $2,400 cap in 2027 is worth thinking about strategically, not just as a number.

If your medications are expensive enough that you will certainly reach it, your total annual drug spending is effectively known in advance: the deductible, your share on the way up, and then nothing. The comparison becomes about which plan gets you there most cheaply and with the fewest authorization hurdles.

If your drugs are inexpensive and you will never approach $2,400, the cap is irrelevant to you and the comparison is simply about tier placement and premium.

Knowing which of those two situations you are in makes the whole exercise much simpler.

Check the pharmacy, not just the plan

This is the most overlooked variable. A plan's preferred pharmacy network can change every year, and the same plan can price the same drug differently at two pharmacies a mile apart.

If you are attached to a particular pharmacy, check its status for next year before choosing. If you are flexible, a plan that is expensive at your current pharmacy may be inexpensive at another, which is a cheaper fix than changing plans.

How The Jordan Insurance Agency helps

Running eight medications against every Part D plan in your county at your specific pharmacy is exactly the mechanical work we do quickly, because the tools are open on our desk all day.

The Jordan Insurance Agency is an independent agency in Charlotte, North Carolina. Give us your medication list and your pharmacy, and we will come back with what each plan would actually cost you across the year, not what the premium says. If your current plan is already the best fit, we will tell you that.

There is no cost, and your premium is the same whether you enroll with us or on your own.