Prescription drug costs are one of the biggest concerns I hear from Arizona seniors. Whether you take one medication or ten, understanding how Medicare Part D works can save you hundreds or even thousands of dollars a year.
Here is a straightforward breakdown of what Part D covers, how it works, and how to make sure you are not overpaying for your medications.
What Is Medicare Part D?
Medicare Part D is the prescription drug benefit. It is offered through private insurance companies approved by Medicare. You can get Part D coverage in two ways: as a standalone Prescription Drug Plan (PDP) that pairs with Original Medicare and a Medigap supplement, or as part of a Medicare Advantage plan that includes drug coverage (MA-PD).
Either way, every Part D plan has a formulary, which is the list of drugs the plan covers and what tier they fall into. Tiers determine how much you pay out of pocket for each medication.
How Part D Drug Tiers Work
Most Part D plans organize medications into five tiers. Tier 1 includes the cheapest generic drugs with the lowest copays. Tier 2 covers preferred generic drugs. Tier 3 is for preferred brand-name drugs. Tier 4 covers non-preferred drugs at higher costs. Tier 5, the specialty tier, includes the most expensive medications, often for complex conditions like cancer or rheumatoid arthritis.
The tier your medication falls on can vary significantly between plans. A drug that is Tier 3 on one plan might be Tier 2 on another, saving you money every time you fill your prescription.
The Part D Coverage Gap (Donut Hole)
In 2026, thanks to the Inflation Reduction Act, the out-of-pocket cap for Part D is $2,000 per year. Once you hit that amount in total out-of-pocket drug costs, you pay nothing for the rest of the year. This is a major improvement over the old donut hole structure, where costs could spiral much higher.
This $2,000 cap makes it more important than ever to choose a plan with lower copays on your specific medications, since the plan that gets you to $2,000 the slowest is the one that saves you the most.
How to Save Money on Part D in Arizona
The biggest savings come from comparing plans side by side using your actual medication list. I do this for every client. We enter each of your prescriptions, check the dosage and quantity, and then compare what each available plan in your zip code would charge you over the course of a year.
Other ways to save include asking your doctor about generic alternatives, using preferred pharmacies (many plans offer lower copays at specific pharmacy chains), and checking whether mail-order pharmacy options reduce your costs.
When Can You Change Your Part D Plan?
You can switch Part D plans during the Annual Enrollment Period from October 15 through December 7 each year. If you have a Medicare Advantage plan, you also have a chance to make changes during the Medicare Advantage Open Enrollment Period from January 1 through March 31.
Since formularies and pricing change every year, reviewing your Part D plan annually is one of the smartest things you can do. A plan that saved you money last year might not be the best option this year.
Get a Free Prescription Drug Plan Review
If you are unsure whether your current Part D plan is the best fit for your medications, I can help. I will check your prescriptions against every available plan in your area and show you exactly what each one would cost.
Call me at 480-296-5804 or request a free plan review. There is no charge and no obligation.