A Medicare drug plan that looks inexpensive on the surface can become surprisingly costly once you start filling prescriptions. Premiums are only one piece of the equation, because formularies, drug tiers, deductibles, copays, coinsurance, and even the pharmacy you use can change what comes out of your pocket. That makes the weeks before Medicare Open Enrollment an ideal time to gather prescriptions and start doing some homework rather than automatically renewing last year’s coverage. A plan with a $10 monthly premium could ultimately cost one person more than a $40 plan if their medications land on expensive tiers or their preferred pharmacy isn’t favored by the cheaper plan.
Medicare’s annual Open Enrollment runs from October 15 through December 7, with coverage changes taking effect January 1, according to Medicare’s official enrollment guidance. If you want to compare Medicare drug costs effectively, the goal should be finding the lowest realistic total cost for the medications you actually take. Here are seven costs you need to compare before the open enrollment period starts.
1. Make a Fresh List of Every Prescription You Take
Start by creating a medication list that includes each drug’s exact name, dosage, quantity, and how frequently you refill it. Don’t rely on last year’s list because even one medication added after surgery or a new diagnosis can change which plan offers the best value. Medicare’s Plan Compare tool allows beneficiaries to enter their prescriptions and receive estimates of monthly and yearly costs for available plans, according to Medicare’s explanation of its comparison tools. Include medications you take regularly rather than assuming a plan that worked well for a spouse, neighbor, or friend will produce the same costs for you. Be sure to include:
- Exact drug name
- Generic or brand
- Dosage
- Quantity
- Refill frequency
- Current pharmacy
- Whether they use mail order
- Any expensive medication they expect to start or continue next year
One especially important point: don’t substitute a similar-sounding drug when entering medications into Plan Compare. A different dosage or formulation can produce a different result. Once your list is accurate, you’ll have the basic information needed to compare Medicare drug costs on something more meaningful than premiums alone.
2. Check Whether Every Medication Is on the Formulary
Medicare drug plans have formularies, or lists of medications they cover, and those lists aren’t identical from one plan to another. Medicare explains that formularies typically divide covered medications into tiers, with drugs in lower tiers generally costing less than those placed in higher tiers. That means two plans can both cover your $300-per-month medication but require dramatically different amounts from you at the pharmacy counter. Also look for coverage requirements such as prior authorization, step therapy, or quantity limits rather than simply stopping when you see that a drug appears on the list.
For every important medication, ask four questions: Is it covered? What tier is it on? What will I pay? Are there restrictions? When you compare Medicare drug costs, formulary placement can therefore be just as important as whether the medication technically says “covered.”
If a medication is not covered or has a restriction, that doesn’t necessarily mean the discussion ends there. Medicare allows beneficiaries or their prescribers to request certain formulary or coverage-rule exceptions, although approval isn’t guaranteed.
3. Compare the Full Year’s Cost, Not Just Monthly Premiums
It’s tempting to sort Medicare plans by premium and choose the cheapest one, but doing that can produce a false bargain. Medicare notes that actual Part D costs depend on factors including the medications you take, whether those drugs appear on the plan’s formulary, and which pharmacy you use, while premiums and deductibles can also differ among plans. For 2026, Medicare says a Part D deductible can be as high as $615, although some plans charge a smaller deductible or none at all. Imagine comparing a $10 monthly plan with expensive copays against a $35 plan that offers substantially lower costs on two medications you fill every month; paying $300 more in annual premiums could potentially save considerably more at the pharmacy. Focus on the estimated total yearly expense when you compare Medicare drug costs, including premiums and expected prescription spending, rather than judging plans by one attractive number.
4. See What Happens When You Change Pharmacies
Your longtime pharmacy may be convenient, but it isn’t necessarily the least expensive place to fill prescriptions under every Medicare plan. Medicare specifically notes that Part D deductibles, copayments, and coinsurance can vary by both plan and pharmacy, which means the same insurance plan can produce different out-of-pocket costs depending on where prescriptions are filled. When using Medicare Plan Compare, enter the pharmacies you’re realistically willing to use and compare the projected spending rather than automatically selecting the closest location.
If switching to another pharmacy would save $15 on each of four monthly prescriptions, for example, the difference could theoretically reach $720 over 12 months. Mail-order options may also be worth comparing when appropriate, but make sure convenience, refill timing, medication needs, and pharmacy access still work for your situation.
The Medicare Prescription Payment Plan Changes Timing, Not Total Cost
The Medicare Prescription Payment Plan can be useful for beneficiaries who expect substantial out-of-pocket prescription expenses, particularly when those costs occur early in the calendar year. Instead of paying the applicable out-of-pocket amount to the pharmacy when a covered Part D prescription is filled, participants receive monthly bills from their Medicare health or drug plan that spread those costs across the remaining months of the year. However, Medicare emphasizes that this payment option does not reduce prescription prices or lower the total amount someone owes for covered drugs. The 2026 $2,100 out-of-pocket cap applies to covered Part D drugs whether or not someone participates in the payment program. When comparing plans, beneficiaries should therefore evaluate drug costs first and consider the Medicare Prescription Payment Plan separately as a cash-flow tool rather than a discount program.
5. Pay Attention to How High-Cost Drugs Affect the Numbers
People taking expensive medications have an additional reason to examine projected annual spending carefully. Under the 2026 Part D benefit, out-of-pocket spending on covered Part D drugs is capped at $2,100, after which beneficiaries enter catastrophic coverage and don’t pay additional out-of-pocket costs for covered Part D drugs for the remainder of the calendar year. The Medicare Prescription Payment Plan can also spread eligible out-of-pocket prescription expenses across the calendar year, although Medicare emphasizes that the program does not actually reduce the total drug cost. That’s an important distinction for someone expecting several expensive prescriptions early in the year, because smoothing a $1,000 expense over multiple months addresses cash flow rather than making the medication cheaper. When you compare Medicare drug costs, look separately at how much you’ll ultimately spend and when you’ll likely have to spend it.
Make Sure You’re Comparing Drugs That Actually Fall Under Part D
Not every medication a Medicare beneficiary receives is necessarily paid for through a Part D drug plan. Medicare Part B covers certain outpatient drugs under specific circumstances, including some medications administered in a doctor’s office or hospital outpatient setting, while Part D generally covers outpatient prescription drugs that Part B does not cover. That distinction matters when estimating next year’s prescription expenses because entering a medication into a Part D comparison without understanding how Medicare actually covers it can create confusion about the expected cost. If you receive expensive injections, infusions, specialty medications, or other drugs administered by a healthcare provider, ask the provider or Medicare which part of your coverage is expected to pay before using the medication in your plan comparison. Separating Part B-covered medications from Part D prescriptions can make the annual cost estimate much more meaningful.
6. Review Your Annual Notice of Change Before Assuming Your Plan Is Still Best
Even if your prescriptions haven’t changed, your Medicare drug plan might, so last year’s best option isn’t automatically this year’s winner. Medicare advises beneficiaries to review notices from their current plan about upcoming changes in costs and benefits before Open Enrollment and says plan options for the next year can be previewed beginning around October 1. Pay particular attention to premium changes, deductibles, formulary changes, drug tiers, pharmacy arrangements, and restrictions involving medications you regularly use.
Put last year’s plan details beside the upcoming year’s Annual Notice of Change and highlight every change affecting one of your medications. A retiree whose three prescriptions remain identical could still face different expenses next year if one medication moves to a higher tier or the preferred pharmacy arrangement changes. Spending an hour reviewing these details before October 15 can be much easier than discovering an unexpected price increase at the pharmacy in January.
7. Check Whether You Qualify for Help With Prescription Costs
Before settling on a plan, investigate whether you qualify for programs that could reduce what you’re expected to pay. Medicare’s Extra Help program assists eligible people with limited income and resources with Part D expenses such as premiums, deductibles, coinsurance, and copayments. People who qualify for certain Medicare Savings Programs also automatically receive Extra Help. In 2026, Medicare says people receiving Extra Help generally pay no plan premium or deductible and pay no more than $5.10 for each covered generic drug and $12.65 for each covered brand-name drug at participating pharmacies. Once applicable total drug costs reach $2,100, they pay $0 for covered drugs for the rest of the year.
Eligibility rules matter, so don’t assume your income automatically puts assistance out of reach without checking the current requirements or asking your state for information. Someone eligible for assistance may discover that applying for help is ultimately more valuable than simply trying to compare Medicare drug costs among plans without considering available subsidies.
Compare These Numbers Before Choosing a Part D Plan
| Cost factor | Plan A | Plan B | Plan C |
|---|---|---|---|
| Monthly premium | $___ | $___ | $___ |
| Annual premium | $___ | $___ | $___ |
| Deductible | $___ | $___ | $___ |
| Drug #1 annual cost | $___ | $___ | $___ |
| Drug #2 annual cost | $___ | $___ | $___ |
| Drug #3 annual cost | $___ | $___ | $___ |
| Preferred pharmacy? | Yes/No | Yes/No | Yes/No |
| Prior authorization? | Yes/No | Yes/No | Yes/No |
| Step therapy? | Yes/No | Yes/No | Yes/No |
| Estimated annual total | $___ | $___ | $___ |
Your Prescription List Should Drive Your Medicare Decision
Medicare Open Enrollment isn’t really about finding the plan with the flashiest advertisement or lowest advertised premium; it’s about matching coverage to your actual healthcare needs. Medicare beneficiaries can join, drop, or switch eligible Medicare health and drug coverage between October 15 and December 7, and changes generally become effective January 1. Before that window arrives, gather your prescriptions, review your current plan’s upcoming changes, compare formularies and pharmacies, and use Medicare’s Plan Compare to estimate what competing plans could actually cost. Be cautious about dropping prescription coverage altogether because Medicare warns that going 63 consecutive days or more without Part D or other creditable prescription coverage can lead to a late-enrollment penalty when you enroll later.
When was the last time you compared your Medicare drug plan against other options instead of simply allowing it to renew? It could be time for a review.
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