Medicare Part D Hacks

Content

• Why Medicare Part D matters for your prescriptions
• What changed for Medicare Part D in 2025, including the end of the donut hole
• Medicare Part D hacks to lower your prescription drug costs
• Step by step checklist to use these Medicare Part D hacks
• Talk with your care team and get coordinated support
• Frequently asked questions about Medicare Part D hacks
• References

Why Medicare Part D matters for your prescriptions

Medicare drug coverage, also called Medicare Part D, helps pay for the brand name and generic prescription drugs you need. It is optional coverage offered through private plans that are approved and regulated by Medicare.

Even if you do not take many medicines right now, Medicare recommends that you consider enrolling in Part D when you are first eligible. Doing this can protect you from very high drug costs later and helps you avoid a Part D late enrollment penalty if you join a plan in the future.

With the changes that started in 2025, Medicare Part D now has clearer rules about how much you will pay each year for covered drugs. Understanding those rules is the first step toward using the “hacks” in this guide to lower what you spend and reduce stress about your prescriptions.

What changed for Medicare Part D in 2025

In the video on this page, one of our advocates talks through a common pain point: understanding Medicare Part D and its prescription benefit. They explain that the “infamous donut hole” is gone and that your plan now has a clear maximum out of pocket limit for covered drugs.

Here is what that means in simple language.

The donut hole is gone, but coverage stages remain

For many years, Medicare Part D had four stages: a deductible, an initial coverage period, a “coverage gap” often called the donut hole, and catastrophic coverage. In the coverage gap, people often paid a larger share of their drug costs, which was confusing and stressful.

Due to the Inflation Reduction Act, starting January 1, 2025, the formal coverage gap phase is eliminated. Plans now follow a three stage design instead of four, and out of pocket spending is capped.

You no longer move into a separate donut hole where costs suddenly change. Instead, you move from the deductible stage, to initial coverage, and then into catastrophic coverage once you reach the annual cap on your out of pocket spending for covered Part D drugs.

The three coverage stages and the 2,000 dollar cap

For 2025, most Medicare drug plans follow this standard structure:

• Deductible stage
  You pay 100 percent of your covered drug costs until you meet your plan’s deductible. No Medicare drug plan can have a deductible higher than 590 dollars in 2025, though some plans use a lower or zero dollar deductible with a higher monthly premium.
• Initial coverage stage
  After you meet the deductible, you usually pay about 25 percent of the cost of covered drugs, either as coinsurance or set copays. Your plan and the drug manufacturer pay the rest. Your out of pocket costs in this stage build toward an annual out of pocket limit of 2,000 dollars in 2025.
• Catastrophic coverage stage
  Once your out of pocket spending on covered Part D drugs reaches 2,000 dollars in 2025, you move into catastrophic coverage. From that point through December 31, you pay nothing out of pocket for covered Part D drugs. Your plan, Medicare, and manufacturers share the cost.

These rules apply to covered Part D drugs. Your monthly premiums are separate and do not count toward the 2,000 dollar cap.

What “maximum out of pocket” really means for you

Your plan keeps track of which payments count toward your annual out of pocket limit. These include:

• The deductible you pay on covered Part D drugs
• Copays and coinsurance you pay at the pharmacy
• Certain payments made on your behalf, such as help from the Extra Help program or some state assistance programs

When those counted amounts reach 2,000 dollars in 2025, you have hit your Part D maximum out of pocket for the year. From that point forward, you should not pay any more copays or coinsurance for covered Part D drugs until January 1 of the next year.

In the video, our advocate puts this in practical terms: once you have paid up to your out of pocket maximum through copays, coinsurance, and any deductible, your Medicare Part D benefit should cover 100 percent of the cost of covered prescriptions for the rest of the year.

A key hack is to choose a plan that keeps your costs reasonable before you reach that maximum, and to use all available programs that help you reach it safely without skipping medicines.

Medicare Part D hacks to lower your prescription drug costs

The goal of these “hacks” is not to game the system. They are practical, legal ways to use the rules of Medicare Part D to your advantage and avoid unnecessary spending or treatment gaps.

In the video script, our advocate describes how we:

• Enter your current prescriptions into a plan’s website
• Estimate your potential yearly cost
• Help you understand the maximum out of pocket for each option
• Look for samples, savings cards, and manufacturer support when medicines are still too expensive

The steps below mirror that approach so you can follow them on your own or with an Understood Care advocate by your side.

Hack 1: Build a complete medication list before you compare plans

Before you look at Part D plans, write down:

• Every prescription medicine you take
• The exact dose and how often you use it
• Whether you use a brand name version or a generic
• The pharmacies you prefer, including any mail order service
• Vitamins, supplements, and over the counter medicines you use regularly

This list is the foundation of almost every other hack in this article.

On the official Medicare Plan Finder tool, you can enter each drug, its dose, and your preferred pharmacy. The tool then shows your estimated costs for each available plan in your area.

In the video, our advocate talks about doing the same thing on your payer’s site. If you prefer, an Understood Care advocate can do this for you, walk you through the results in plain language, and help you understand which plan looks most affordable based on the medicines you actually take.

Hack 2: Compare plans by total yearly cost, not just the premium

It is tempting to pick the plan with the lowest monthly premium. That can be a mistake. A true Medicare Part D hack is to focus on your total yearly cost. That includes:

• Monthly premiums
• The deductible you pay before coverage starts
• Copays or coinsurance for each of your medicines
• Any costs you pay before you reach the 2,000 dollar out of pocket cap

When you or your advocate use Medicare Plan Finder or a plan’s own website, look at:

• The estimated yearly cost for your specific drug list
• How much you would pay in each coverage stage
• Whether some plans get you to the 2,000 dollar cap faster, which can lower your total out of pocket cost if you take high cost medicines

In our work with members, we often line up two or three plans that seem promising, then walk through scenarios with you. Together we look at which medicines drive most of the cost and how those medicines are covered in each plan.

Hack 3: Dig into the formulary and drug tiers

A formulary is the plan’s official list of medicines that are covered. Medicare Part D plans are not required to cover every drug. Instead, they must cover at least a certain number of drugs in each therapeutic class and must cover all or nearly all drugs in six “protected classes,” such as antidepressants and antineoplastics.

Part D plans also sort medicines into price tiers. Lower tiers usually mean lower copays. Higher tiers, such as “specialty” drugs, often have much higher cost sharing.

When you check the formulary for a plan, look for:

• Whether each of your drugs is listed
• Which tier each drug is on
• Notes like prior authorization, step therapy, or quantity limits

In the video, our advocate describes searching the formulary for the payer you choose. That means we look for covered alternatives, see how expensive drugs are classified, and make sure there are not hidden barriers such as prior authorization that could delay your treatment.

If you prefer to do this yourself, you can usually search the formulary on the plan’s website. Use the exact spelling of each medicine and look closely at any footnotes.

Hack 4: Choose pharmacies and mail order options that work in your favor

Most Medicare Part D plans work with a network of pharmacies. Some pharmacies are “preferred,” which often means you pay less for medicines filled there. Mail order or 90 day supplies can also sometimes reduce your costs.

As you compare plans, check:

• Whether your current pharmacy is in network and preferred
• What your copay would be at a preferred pharmacy compared with a standard one
• Whether 90 day mail order fills are available and whether they cost less than three separate 30 day fills

If it is comfortable for you, an Understood Care advocate can also help you weigh money savings against convenience. For some people, using one local pharmacy they trust, even if slightly more expensive, is worth it. For others, mail order is the best way to avoid missed refills.

Hack 5: Ask your prescriber about cost saving alternatives

Formularies and tiers matter, but you still need medicines that are safe and effective for you. Before you switch plans or switch drugs, talk with your prescriber.

You can ask questions such as:

• Is there a generic version of this medicine that would work as well for me
• Is there a preferred brand on my plan’s formulary that treats the same condition
• Could my dose or dosage form be adjusted to lower the cost without changing the effect
• Is a combination pill I take more expensive than taking the individual generic components

Never split tablets, skip doses, or stop a medicine to save money without clear instructions from your clinician or pharmacist. Abrupt changes can be dangerous for conditions like heart disease, diabetes, depression, or seizures.

Our advocates often help you prepare for these conversations, so you feel confident asking about cost and not just symptoms.

Hack 6: Use Extra Help and other assistance programs if money is tight

If your income and savings are limited, you may qualify for programs that lower your Medicare Part D costs. These programs can pay some or all of your premiums and cost sharing and can help you reach the out of pocket cap with less strain.

Key options include:

• Extra Help (the Part D Low Income Subsidy)
  Extra Help is a Medicare program that can pay your Part D premiums, deductibles, and much of your copays. In 2025, it is generally available to people whose income and resources fall below specific limits that are adjusted each year. The Social Security Administration estimates that this program can be worth several thousand dollars per year for those who qualify.
• Medicaid and Medicare Savings Programs
  If you also qualify for Medicaid or a Medicare Savings Program, these can help with other Medicare costs and can automatically qualify you for Extra Help in many cases.
• State Pharmaceutical Assistance Programs (SPAPs)
  Some states offer their own programs to help with Part D premiums or copays. Contributions from SPAPs can sometimes count toward your out of pocket limit for Part D.
• Pharmaceutical Assistance Programs
  Many drug manufacturers offer savings cards, coupons, or patient assistance programs for people with Medicare drug coverage who still cannot afford their medicines. Each company sets its own rules.

In the video, our advocate explains that when a medicine is too expensive, we can:

• Check with your prescriber to see if samples are available
• Contact the manufacturer to see what savings programs exist
• Work with you on applications so you do not have any break in taking your medication

Understood Care’s Lower Costs of Medication service is built around this kind of support.

Hack 7: Consider the Medicare Prescription Payment Plan if your costs are front loaded

Starting in 2025, people with Medicare drug coverage can opt in to the Medicare Prescription Payment Plan. This is a new payment option that lets you spread your out of pocket Part D drug costs across the calendar year instead of paying large amounts at the pharmacy early in the year.

Key points to know:

• It works with your existing Part D coverage.
• You pay little or nothing at the pharmacy when you fill covered prescriptions.
• Your plan keeps track of what you would have owed and sends you a monthly bill so you can pay those costs over time.
• It does not lower your total drug costs or change the 2,000 dollar out of pocket cap, but it can make your monthly budget more manageable.

This hack can be especially helpful if you take one or more very expensive medicines and tend to hit the 2,000 dollar cap early in the year.

Before you enroll, review:

• Whether you are comfortable with a predictable monthly bill
• How you will make payments on time to avoid falling behind
• What happens if you decide to leave the program while you still owe a balance

An advocate can help you decide whether this option fits your situation and talk through examples with you.

Hack 8: Recheck your Medicare Part D plan every year

Plan details change each year.

Premiums, deductibles, drug tiers, and pharmacy networks can all shift, even if your plan keeps the same name.

A simple but powerful hack is to treat every fall as your “Part D checkup”:

• Rebuild your medication list
• Use Medicare Plan Finder or a plan website to compare your current plan with new options
• Look for changes in how your most expensive medicines are covered
• Make sure your preferred pharmacies are still in network and preferred
• If your income or savings have changed, revisit Extra Help and other assistance programs

Most people can change their Part D plan during the annual open enrollment period each fall. If you get Extra Help or have Medicaid, you may have more frequent opportunities to switch.

Step by step checklist to use these Medicare Part D hacks

Use this checklist as you watch the video or work with an advocate:

1. Write down your Medicare number and any current Part D plan information.
2. Make a complete list of all your prescription medicines and where you fill them.
3. Decide whether you want to use the Medicare Plan Finder, your plan’s website, or work with an Understood Care advocate.
4. Enter your medicines, doses, and preferred pharmacies into the comparison tool.
5. Review the estimated yearly cost for at least two or three plans, including premiums, deductibles, and drug costs through the year.
6. For each plan, open the formulary and confirm that your medicines are covered and on which tier.
7. Mark any medicines that are high tier, need prior authorization, or have step therapy requirements.
8. Talk with your prescriber about lower cost alternatives, generics, or formulary friendly options when appropriate.
9. Check whether you might qualify for Extra Help, Medicaid, a Medicare Savings Program, or a state assistance program, and apply if you qualify.
10. Decide whether the Medicare Prescription Payment Plan fits your situation, especially if you expect high costs early in the year.
11. Once you enroll in a plan, save your plan documents and watch your monthly Explanation of Benefits to track your coverage stage and out of pocket spending.

If any of this feels overwhelming, it is completely understandable. The advocate in the video describes our role as your partner. We can take on the technical work of running comparisons, checking formularies, and tracking savings programs, while you stay focused on your health.

Talk with your care team and get coordinated support

Cost is a health issue. If you cannot afford your medicines, they cannot help you.

Bring your medication list and cost concerns to every visit with your clinicians. You can say things like:

• “These copays are hard to manage. Are there lower cost alternatives that could work for me”
• “My Medicare Part D plan requires prior authorization or step therapy. Can your office help with the paperwork”
• “I am thinking about switching to a different Part D plan. How would that affect my prescriptions”

If you feel you are repeating the same story to multiple doctors, or if letters from your plan feel confusing, a care advocate can help.

Understood Care advocates can:

• Coordinate information between your prescribers and your Part D plan
• Help you prepare for appointments so you know which questions to ask about medicines and costs
• Review denial letters and help you understand appeal options
• Work with you over time, so if a new medicine is prescribed, your coverage and costs are checked before you get to the pharmacy

You can learn more about our services at:

• Care Coordination
• Appointments
• Lower Costs of Medication‍

Frequently asked questions about Medicare Part D hacks

• What are the Medicare Part D stages in 2025
  In 2025, most Medicare Part D plans have three stages for covered drugs. You start in the deductible stage, where you pay all costs until you meet any deductible. Then you move into initial coverage, where you normally pay about 25 percent of drug costs until your counted out of pocket spending reaches 2,000 dollars. After that, you are in catastrophic coverage and pay nothing out of pocket for covered Part D drugs for the rest of the year.
• Is the Medicare Part D donut hole really gone in 2025
  Yes. The formal coverage gap, also called the donut hole, is removed starting in 2025. You still move through stages of coverage, but there is no separate gap where your share of costs suddenly increases. Instead, there is a three stage design with an annual 2,000 dollar out of pocket cap for covered Part D drugs.
• What is the Medicare Part D out of pocket maximum in 2025
  For 2025, the standard maximum out of pocket spending for covered Part D drugs is 2,000 dollars. Once your deductible, copays, coinsurance, and certain assistance payments reach that amount, you pay nothing more out of pocket for covered Part D drugs for the rest of the calendar year. Your premiums do not count toward this cap and still need to be paid each month.
• How can I find the best Medicare Part D plan for my medications
  Start with a detailed list of your current prescriptions. Use the Medicare Plan Finder tool on Medicare.gov or your payer’s plan comparison site to enter each drug, dose, and pharmacy. Compare plans by total yearly cost, not just premiums, and check the formulary to confirm coverage and tiers. If you want help, you can talk with a State Health Insurance Assistance Program counselor or an Understood Care advocate to walk through the options side by side.
• What programs help lower Medicare Part D drug costs if my income is limited
  Extra Help from Medicare, Medicaid, and Medicare Savings Programs can lower or eliminate your premiums, deductibles, and copays. Some states also offer State Pharmaceutical Assistance Programs that help pay Part D costs. Drug companies may have patient assistance programs or savings cards for specific medicines. You can apply for Extra Help through Social Security and learn about other programs on Medicare.gov, or work with an advocate who can guide you through the applications.
• Can manufacturer coupons and savings cards be used with Medicare Part D
  Many manufacturer coupons and savings cards are aimed at people with commercial insurance and may not be usable at the same time as Medicare Part D coverage for the same prescription. In some cases, they can still help if you temporarily pay outside your Part D plan, but that may mean those payments do not count toward your out of pocket cap. The rules can be complex, so it is important to ask your pharmacist and check your plan documents. An advocate can help you understand how a specific savings card would interact with your plan before you decide.
• Is the Medicare Prescription Payment Plan a good Medicare Part D hack for everyone
  The Medicare Prescription Payment Plan can be helpful if you have high drug costs early in the year and want to spread payments out. It may be less useful if your drug costs are low or steady or if monthly bills would make budgeting harder for you. The program does not reduce the total amount you owe; it just spreads it across months. Before you join, review your expected costs, how stable your income is, and how you prefer to manage bills, and consider talking with an advocate or counselor.

References

• Medicare.gov. What is Medicare Drug Coverage (Part D).
  https://www.medicare.gov/health-drug-plans/part-d
• Medicare.gov. How much does Medicare drug coverage cost.
  https://www.medicare.gov/health-drug-plans/part-d/basics/costs
• Medicare.gov. Help with drug costs (Extra Help and other programs).
  https://www.medicare.gov/basics/costs/help/drug-costs
• Medicare.gov. Find and compare Medicare health and drug plans.
  https://www.medicare.gov/plan-compare/
• Medicare.gov. Your Guide to Medicare Prescription Drug Coverage (Publication 11109).
  https://www.medicare.gov/publications/11109-your-guide-to-medicare-prescription-drug-coverage.pdf
• Centers for Medicare and Medicaid Services. Final CY 2025 Part D Redesign Program Instructions Fact Sheet.
  https://www.cms.gov/newsroom/fact-sheets/final-cy-2025-part-d-redesign-program-instructions-fact-sheet
• National Council on Aging. Who Pays What for Medicare Part D in 2025: A Guide.
  https://www.ncoa.org/article/who-pays-what-for-medicare-part-d-in-2025-a-guide
• Social Security Administration. Understanding the Extra Help With Your Medicare Prescription Drug Plan (Publication EN-05-10508).
  https://www.ssa.gov/pubs/EN-05-10508.pdf
• Social Security Administration. Apply for Medicare Part D Extra Help program.
  https://www.ssa.gov/medicare/part-d-extra-help
• Medicare.gov. What is the Medicare Prescription Payment Plan.
  https://www.medicare.gov/prescription-payment-plan
• Centers for Medicare and Medicaid Services. What’s the Medicare Prescription Payment Plan (Fact Sheet, Product 12211).
  https://www.medicare.gov/publications/12211-whats-the-medicare-prescription-payment-plan.pdf
• National Institutes of Health SEED. Reimbursement Knowledge Guide for Drugs.
  https://seed.nih.gov/sites/default/files/2024-04/Reimbursement-Knowledge-Guide-for-Drugs.pdf
• Understood Care. Care Coordination.
  https://understoodcare.com/care-types/care-coordination
• Understood Care. Appointments.
  https://understoodcare.com/care-types/appointments
• Understood Care. Lower Costs of Medication.
  https://understoodcare.com/care-types/lower-costs-of-medication

This content is for education only and does not replace professional medical, legal, or insurance advice. For questions about your own coverage, talk with your health care team, contact Medicare directly, or work with a qualified advocate.