Choosing a Part D Plan Isn’t Just About Price—It’s About What Gets Left Out

Key Takeaways

• In 2025, choosing a Medicare Part D plan based solely on premium costs can leave you exposed to high out-of-pocket drug expenses.

• Formularies, network restrictions, and cost-sharing rules vary widely between plans and can significantly affect what you pay and what you get.

What You Think You’re Paying for Isn’t Always What You’re Getting

Many people assume a low monthly premium means a Part D plan is a good deal. But Medicare Part D doesn’t work like a one-size-fits-all prescription discount card. The premium is only the starting point. You need to dig into what the plan actually covers, how much it pays for different types of drugs, and what pharmacies you can use. In 2025, these differences are more pronounced than ever.

What Makes Part D So Complicated in 2025

You’re not imagining it—Medicare Part D has many moving parts. Here’s why:

• Formularies are plan-specific. Each plan has its own list of covered drugs, which can change every year.

• Tiered pricing. Most plans use a tier system, where generic drugs are cheaper than brand-name or specialty medications.

• Pharmacy networks matter. Some plans charge more if you use a pharmacy outside of their preferred network.

• Prior authorization and step therapy. Certain drugs may require your doctor to justify their use before they’re covered.

And while 2025 brings some relief—such as the $2,000 out-of-pocket cap on Part D drug costs—many other complexities remain. That cap only kicks in after significant spending, and it doesn’t prevent surprise costs earlier in the year.

The $2,000 Cap Doesn’t Cover What You Might Expect

Starting in 2025, Medicare Part D has an annual out-of-pocket cap of $2,000 for covered prescription drugs. This change eliminates the infamous “donut hole,” offering peace of mind for those with high drug costs.

But here’s the catch:

• The cap only applies to covered drugs.

• You still need to meet the deductible, which can be up to $590 in 2025.

• Costs like premiums, non-covered medications, and pharmacy fees don’t count toward the cap.

• Not all plans structure drug pricing the same, so your upfront costs can still vary widely.

What this means is that while the catastrophic phase now starts at $2,000 in out-of-pocket spending, you could still face thousands in costs if your medications are not included in the plan’s formulary.

What Gets Left Out: Common Pitfalls People Miss

When you compare plans on price alone, you risk overlooking these crucial elements:

1. Non-Formulary Medications

If a drug isn’t listed in your plan’s formulary, it likely won’t be covered at all. This applies even to medications you’ve taken for years.

2. Step Therapy Requirements

Some plans require you to try less expensive drugs before they cover your prescribed medication. If you skip this step, you may pay the full cost out of pocket.

3. Preferred vs. Standard Pharmacies

Many plans have a “preferred pharmacy” network where drugs cost less. Using a non-preferred pharmacy—even one in-network—can raise your copays significantly.

4. Specialty Tiers

Drugs placed on the specialty tier often come with coinsurance instead of copays. This means you pay a percentage of the drug’s cost, which can be very high.

5. Quantity Limits

Some plans limit how much of a medication you can get at once. If your doctor prescribes more, you may have to go through a prior authorization process or face higher costs.

Annual Notice of Change: The Document You Shouldn’t Ignore

Each fall, your current plan sends out an Annual Notice of Change (ANOC) that outlines what’s changing for the upcoming year. In 2025, ignoring this document could mean big surprises come January:

• Your premium might increase.

• Your medication might move to a higher tier.

• A drug you rely on might be dropped from the formulary.

• Your preferred pharmacy might no longer be in-network.

Review this document every year during the Medicare Open Enrollment Period from October 15 to December 7.

Generic Doesn’t Always Mean Cheap

Generic drugs are often viewed as the most affordable option, but even they can vary widely in price under different plans:

• Some plans list certain generics in higher tiers.

• The same drug might be on Tier 1 in one plan and Tier 3 in another.

• Your pharmacy choice can impact the final cost of a generic medication.

That’s why reviewing the plan’s drug list (formulary) is just as important as checking the premium.

What to Do During Medicare Open Enrollment

If you’re enrolled in a Part D plan, Medicare Open Enrollment from October 15 to December 7 is your once-a-year opportunity to:

• Switch to a new Part D plan

• Drop your existing drug plan

• Join a Part D plan for the first time

Before making any decision, consider:

• Your current prescriptions: Are they still covered? On what tier?

• Pharmacy access: Is your pharmacy still preferred or in-network?

• Out-of-pocket costs: Have they gone up or down?

• Changes in coverage: Has your plan altered its formulary or prior authorization rules?

A plan that worked last year may no longer suit your needs in 2025.

How the Medicare Prescription Payment Plan Affects You

A new option in 2025—the Medicare Prescription Payment Plan—lets you spread your out-of-pocket drug costs over the year through monthly payments, instead of paying large sums up front.

This may sound helpful, but remember:

• It doesn’t reduce the total amount you owe.

• It’s optional—you must actively opt in.

• It only applies to Part D out-of-pocket costs, not premiums or non-covered medications.

If you rely on high-cost medications early in the year, this plan may help with budgeting but won’t eliminate cost concerns.

It’s Not Just What You Pay—It’s What You Get

When evaluating Part D plans, consider the total value rather than just the lowest monthly cost. Here’s what to weigh:

• Drug coverage: Does the plan cover all your current medications?

• Cost-sharing: What are the deductibles, copays, and coinsurance?

• Access: Can you use your preferred pharmacy without penalty?

• Restrictions: Are there prior authorizations or step therapy requirements?

• Stability: Has the plan historically dropped drugs or changed tiers frequently?

A plan with a low premium may cost you more overall if your medications aren’t covered or you face high coinsurance for specialty drugs.

Why Getting Help Can Save You Money and Headaches

Medicare Part D plans change annually, and the differences aren’t always obvious. You may not spot the gaps in coverage until after you’ve enrolled. That’s why it’s worth consulting someone who can look beyond the surface.

Here’s how a licensed agent can help:

• Review and compare all available Part D plans in your area

• Explain tier structures and restrictions

• Check your medications against current formularies

• Clarify how much you could really pay in 2025

Even with the 2025 out-of-pocket cap, missteps can lead to frustration and surprise bills. Guidance from a knowledgeable source can make your plan work for you, not against you.

Find a Plan That Truly Fits Your Needs

Choosing a Part D plan isn’t just about price—it’s about ensuring your medications are covered, your pharmacy works with your plan, and your out-of-pocket costs stay predictable.

Don’t let marketing terms or low premiums mislead you. Review your ANOC, evaluate coverage tiers, and use the Medicare Open Enrollment window wisely. If you’re not confident in your review, now is the time to reach out for guidance.

Get in touch with a licensed agent listed on this website who can walk you through your options and help you make a confident, informed choice for 2025.