Key Takeaways:

• Misunderstanding how Medicare Part D works can lead to unexpected out-of-pocket costs, especially if you assume all prescriptions are covered equally.

• The structure of Medicare prescription drug coverage changes over time, so staying informed in 2025 can help you avoid costly mistakes.

Thinking All Medicare Drug Plans Work the Same Way Is a Costly Mistake

You might assume that all Medicare prescription drug plans follow the same coverage structure. While Medicare Part D is standardized in certain ways, the specifics of each plan can vary widely. Different plans have different formularies (the list of covered drugs), tiers, and cost-sharing structures.

Why This Matters in 2025

Many beneficiaries get caught off guard when they realize their medication costs fluctuate between plans or that a particular plan might not cover the medication they need. Always review your plan’s formulary annually to avoid surprise costs.

Believing the Medicare Part D Donut Hole No Longer Exists

Many people assume the infamous “donut hole” coverage gap in Medicare Part D is gone. While changes have reduced its impact, a coverage gap still exists in 2025, and misunderstanding how it works could result in higher costs.

How the Coverage Gap Affects You

In 2025, once your total drug costs (including what you and your plan pay) hit a specific threshold, you move into the coverage gap phase. While you won’t be paying full price for medications in this phase, you could still be responsible for a significant percentage of the cost until you reach the catastrophic coverage phase. If you aren’t prepared for this transition, you could find yourself paying more out-of-pocket than expected.

Assuming All Pharmacies Charge the Same Price for Prescriptions

It’s easy to believe that the price of your medications is the same no matter where you pick them up. However, different pharmacies may charge different prices for the same drug, even under the same Medicare Part D plan.

The Pharmacy Network Factor

Some pharmacies are considered “preferred” by your plan, meaning you may pay less when filling prescriptions there. Others may be “out-of-network,” leading to significantly higher costs. Checking your plan’s preferred pharmacies can help you avoid unnecessary expenses.

Ignoring Annual Changes to Your Medicare Part D Plan

Many beneficiaries assume that once they pick a Part D plan, they don’t need to review it again. This is a dangerous assumption that can lead to unexpected costs in the following year.

How Medicare Part D Changes in 2025

Each year, plans adjust their costs, covered drugs, and pharmacy networks. If you don’t review your plan during the annual Open Enrollment Period (October 15 – December 7), you might find that your medications are more expensive or not covered at all in the new year. Make it a habit to compare plans annually.

Believing Medicare Covers All Medications

One of the biggest misconceptions is that Medicare covers all prescription drugs. This is not the case, and failing to verify coverage can result in expensive surprises at the pharmacy.

The Role of Formularies

Each Medicare Part D plan has a formulary, which is a list of covered medications. If your prescription isn’t on this list, you may have to pay full price. Additionally, plans can impose restrictions, such as requiring prior authorization or step therapy, which could delay access to medications.

Thinking You Don’t Need Medicare Part D If You’re Not on Medications

Some beneficiaries think that because they don’t take any prescription drugs, they don’t need Medicare Part D. While this might seem like a money-saving move, it can actually cost you in the long run.

The Late Enrollment Penalty

If you don’t enroll in a Part D plan when you’re first eligible and don’t have other credible drug coverage, you may face a lifetime late enrollment penalty. This penalty grows the longer you wait and gets added to your monthly premium once you do enroll.

Staying Ahead of Medicare Prescription Drug Costs

Medicare prescription drug coverage can be complex, but staying informed can help you avoid unnecessary costs. Reviewing your plan’s details each year, understanding how costs change, and knowing what’s covered can make a significant difference in what you pay.

If you have questions about Medicare prescription drug coverage or need help choosing the right plan, speak with a licensed agent listed on this website. They can provide expert guidance to ensure you make the best decision for your healthcare needs.