What Is Medicare Part D?
Medicare Part D is the prescription drug coverage component of Medicare. It is offered through private insurance companies approved by Medicare and is available to anyone enrolled in Medicare Part A or Part B.
Part D is optional — but skipping it when you are first eligible can result in a permanent late enrollment penalty added to your premium for as long as you have Part D coverage.
2026 Part D Key Numbers
| Item | 2026 Amount |
|---|---|
| Base beneficiary premium | $38.99/month |
| Annual deductible (max) | $590 |
| Initial coverage limit | $5,030 in drug costs |
| Catastrophic coverage threshold | $8,000 out-of-pocket |
| Extra Help income limit (individual) | $17,600/year |
| Extra Help income limit (married) | $35,130/year |
How Part D Coverage Works
Each Part D plan has a formulary — a list of covered drugs organized into tiers. Lower tiers (generic drugs) typically have lower copays; higher tiers (brand-name and specialty drugs) cost more.
- Tier 1: Preferred generics — lowest cost
- Tier 2: Generics — low cost
- Tier 3: Preferred brand-name drugs — moderate cost
- Tier 4: Non-preferred drugs — higher cost
- Tier 5: Specialty drugs — highest cost
The Late Enrollment Penalty
If you do not sign up for Part D when you are first eligible and go 63 or more days without creditable prescription drug coverage, you will pay a late enrollment penalty. The penalty is calculated as 1% of the national base beneficiary premium for every month you went without coverage — and it is added to your premium permanently.
Extra Help Program
Wisconsin residents with limited income and resources may qualify for the Extra Help program (also called the Low Income Subsidy), which helps pay Part D premiums, deductibles, and copays. In 2026, the income limit is $17,600 for individuals and $35,130 for married couples. Brad can help you determine if you qualify and assist with the application.