How to Compare Medicare Part D Plans for 2027

Listen To: How to Compare Medicare Part D Plans for 2027

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If you are in the process of choosing a Medicare Part D plan, you may feel like it should be one of those retirement decisions that is simple, but somehow is not. That can be very frustrating. With all the decisions you have to make when it comes to retirement, why can't this one be easy?

Medicare plans are complicated and confusing, but for Medicare Part D, it is even more important that you find the best plan for your situation, because the fine print determines what you may actually pay over the course of the next year. You are not just comparing monthly premiums. You are comparing prescription drug costs, deductibles, pharmacies, formularies, and even cash-pay options.

Medicare Open Enrollment runs from October 15 through December 7 every year, and any change that you make takes effect January 1st. This fall’s enrollment is for 2027 coverage, and plans publish their 2027 premiums, formularies, and pharmacy networks around October 1st. That makes the weeks before and after October 15 the time to gather your prescription details, and the enrollment window itself the time to compare plans using the 2027 numbers, not this year’s.

This year, re-checking matters more than usual. A federal program that had been holding down standalone Part D premiums ends after 2026, and Medicare has indicated that roughly three out of four people in standalone drug plans will see their premium go up for 2027. The plan that was cheapest for you this year may not be next year.

Use this article as a starting point for comparing Medicare Part D plans.

One caution before you start: if you’re enrolled in a Medicare Advantage plan, your drug coverage is almost always built into it. Enrolling in a standalone Part D plan will automatically drop you from your Medicare Advantage plan and put you back on Original Medicare. This article focuses on standalone Part D plans, so know which situation you’re in before you enroll in anything.

What Is the Best Way to Compare Medicare Part D Plans for 2027?

There’s no single perfect way to compare Medicare Part D plans. Medicare.gov’s Plan Finder is the official starting point, and it does a good job of comparing plans against each other. What it doesn’t do is weigh cash-price alternatives like GoodRx, or mix plan coverage and cash pricing drug by drug. Our clients kept asking us for that, so we put together resources like this to help.

We want to help you understand how a plan comparison breaks down. That's why we recommend that you start by looking at your estimated total annual prescription drug cost. Your actual Medicare costs may depend on the specific medications you take, your dosage, your refill frequency, even your pharmacy. Then research whether a lower-cost cash option is available for your prescriptions.

The “cheapest” Medicare plan might not always be the plan that provides you with the lowest premium. A plan with a low monthly premium could still cost you more if:

• Your prescriptions are expensive under that plan,

• Your preferred pharmacy is not considered preferred,

• Or one of your medications is placed on a higher-cost tier.

That is why you should start with making a prescription list.

Start With Your Prescription List, Not the Start Ratings

When shopping Medicare plans, a lot of people are tempted to begin by looking at the plan names, their premiums, or even their star ratings. While those details can help you weigh your options, they do not tell the full story. Your prescription medication list is truly the foundation of your comparison.

Before reviewing Medicare Part D plans, gather:

• The exact name of each prescription

• Whether it is generic or brand-name

• The dosage

• The quantity you receive per refill

• How often you refill it

• Whether you use a local pharmacy, mail order, or both

• Your current Medicare drug plan, if you have one

This may sound basic, but these medication details can really make a big difference within each Medicare drug plan. We recommend that you do not guess your dosage or refill frequency from memory. Take the little extra time to pull out the prescription bottles, log into your pharmacy account, or request a medication list from the doctor’s office. Being specific can help you more clearly understand what a plan may or may not cover.

Compare Total Yearly Cost Rather Than Monthly Premium

One of the biggest mistakes some of our retirees make comparing Medicare Part D options is putting to much focus on just the plan’s monthly premium. Monthly premiums are fairly easy to compare because they are listed up front, but your total plan cost may include more than that.

When comparing Medicare Part D plans, you should look at:

• Monthly premium

• Annual deductible

• Copays

• Coinsurance

• Medication tiers

• Pharmacy pricing

• Coverage restrictions

• Estimated annual prescription drug cost

For 2027 coverage, the plans you’ll be choosing this fall, Medicare caps your out-of-pocket spending on covered Part D drugs at $2,400 (up from $2,100 in 2026), and the maximum deductible rises to $700. Once you reach the cap, you pay nothing more for covered Part D drugs for the rest of the year. That is a real protection, but it doesn’t mean every medication, pharmacy, or payment method is treated the same: what you pay on the way to the cap, and whether you ever reach it, depends on how each plan handles your specific medications.

If hitting the cap early in the year would strain your cash flow, every Part D plan must offer the Medicare Prescription Payment Plan, which spreads your out-of-pocket drug costs into monthly payments across the year. It doesn’t lower what you owe, but it evens it out.

Check Whether Your Medications Are Covered Under Your Medicare plan

Every Medicare Part D plan has a formulary, which is the list of drugs that the plan covers. When comparing your plan options, you should check whether each of your prescriptions is included in the coverage. Then look at how the plan categorizes your medications. Some prescription medications may be placed in lower-cost tiers, while others may come with higher copays or extra requirements.

You may also see rules for your prescriptions such as:

• Prior authorization

• Step therapy

• Quantity limits

• Preferred generic options

• Brand-name restrictions

This is where the plan comparison can get really frustrating. A plan that might look inexpensive at first might not actually be the best fit for you if one of your regular prescriptions is not covered as well.

Check To See If Your Pharmacy Is In Network

With some Medicare Part D plans, one pharmacy may be considered preferred while another is standard or out-of-network. So depending on the plan you choose, your choice of pharmacy can actually affect what you pay for your prescriptions.

Before enrolling in a Medicare Part D plan, consider these questions:

• Is my current pharmacy in the plan’s network?

• Is it a preferred pharmacy?

• Would another nearby pharmacy lower my estimated cost?

• Would mail order make sense for any maintenance medications?

• Am I willing to switch my pharmacy for a certain number of savings?

It's okay if you think convenience is worth paying a little more, but it is important to weigh that cost. For other retirees, changing pharmacies could make a noticeable difference. The key is to know the tradeoff before you enroll.

How to Compare GoodRx and Medicare Plans

A common question we get from our clients is whether it is cheaper to use GoodRx or to enroll in a Medicare Part D plan. Our honest answer is: sometimes, but not always. This can also be frustrating when all you want is a simple answer.

The cash prices or discount programs like GoodRx can offer lower prices than your Medicare Part D copay in many situations for specific medications. But there are also tradeoffs. When you pay outside of your Medicare Part D plan, that payment generally won’t count toward your Part D deductible or the out-of-pocket cap. (Some plans will credit a cash purchase of a covered drug at a network pharmacy if you submit the receipt, but don’t count on it.) While this does not automatically make GoodRx a bad choice, it just means you should compare the full-year impact, not only the price of one refill.

For example, paying cash for one lower-cost prescription drug might save you money at the pharmacy counter, but if you need several medications, especially expensive ones, the more important question to consider is how all of those choices work together across the next year. 

How Medicare Part D Fits Into Your Retirement Planning

Prescription drug costs are not just a Medicare issue. They are also part of your overall retirement plan. If you are retired or approaching retirement in the next 5 to 10 years, your future healthcare expenses can impact how much income you will need, and how much cash flow flexibility you will have.

Comparing your Medicare Part D plan options now will not answer all of your retirement planning questions, but it can help you make a more informed decision about one recurring expense that you will face every year.

For pre-retirees, this is also a reminder: Medicare is not something to figure out after you retire. It is part of a larger plan that includes decisions you need to make for your Social Security, taxes, investment income, healthcare costs, and long-term spending needs. If you are unsure how to manage all of your retirement decisions, consider scheduling a free consultation with a Martello retirement planner.

FAQs About Medicare Part D Comparison

What is Medicare Part D comparison?

Medicare Part D comparison is the process of reviewing prescription drug plans based on your medications, pharmacy options, premiums, deductibles, copays, coinsurance, and estimated total annual cost.

What is the best way to compare Medicare Part D plans?

The best way to compare Medicare Part D plans is to use your actual prescription list and compare total estimated yearly costs, not just monthly premiums.

Is the cheapest Medicare Part D plan always the best?

No. The cheapest premium may not lead to the lowest total cost. A plan with a higher premium could cost less overall if it covers your medications more favorably.

Can I use GoodRx with Medicare Part D?

You may be able to use GoodRx or other discount pricing instead of your Medicare Part D plan for certain prescriptions, but those payments may not count toward your Part D deductible or out-of-pocket spending. Compare carefully before deciding.

When is Medicare Open Enrollment?

Medicare Open Enrollment runs from October 15 through December 7 each year. Changes made during this period generally take effect January 1 of the following year.

What information do I need for a Medicare Part D calculator?

You typically need your ZIP code, pharmacy preferences, medication names, dosages, quantities, refill frequency, current plan details, and whether you receive Extra Help.

Why does pharmacy choice matter for Medicare Part D?

Some plans have preferred pharmacies where prescriptions may cost less. The same medication can have different costs depending on the plan and pharmacy combination.

Should I compare Medicare Part D plans every year?

Yes, it is usually wise to review your options every year because plans, formularies, premiums, pharmacies, and your own prescriptions may change. That’s especially true for 2027, when many standalone plan premiums are expected to rise.

Disclaimers:

Martello Retirement and Wealth, LLC is a registered investment adviser. Martello is not an insurance agency, does not sell Medicare plans, and receives no compensation from any insurer or plan sponsor. Martello and its Medicare Part D tool are not connected with or endorsed by the U.S. government or the federal Medicare program. The tool provides estimates for educational purposes based on the information you enter; verify coverage, pricing, and enrollment with Medicare.gov, the plan, or a licensed insurance agent. GoodRx is a registered trademark of GoodRx, Inc., which is not affiliated with Martello.

Martello Retirement and Wealth, LLC is a Registered Investment Adviser. For more information about our firm, including our services, fees, and conflicts of interest, please refer to our Form ADV Part 2A, available on our website at https://www.martelloretirement.com/l/adv.

This content is for informational and educational purposes only and is not intended to provide specific tax, legal, or investment advice. Tax laws are complex and subject to change. Always consult with a qualified tax professional or attorney regarding your specific situation before making any tax-related or estate-planning-related decisions.

Past performance or hypothetical scenarios are not indicative of future results.

There are no guarantees that any tax or estate planning strategies discussed will achieve specific outcomes or avoid future tax liabilities.

The information provided is general in nature and does not consider your individual circumstances, financial goals, or needs. Personalized financial or tax advice can only be provided after a comprehensive understanding of your personal situation.

Unless expressly stated otherwise, any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.