Prescription drugs are one of the most common and ongoing expenses for many retirees. Even if you start retirement with only a few medications, costs often increase over time as health needs change.
As estate planning attorneys, we regularly see prescription costs quietly reduce retirement savings faster than people expect. These expenses rarely feel overwhelming at first. Instead, they add up gradually, often without families realizing the long-term impact.
This is Part 2 of our 4-part Medicare series.
In Part 1, we covered Medicare Parts A and B, the foundation of Medicare coverage. Now, we’re focusing on Medicare Part D, which addresses prescription drug coverage.
What Is Medicare Part D?
Medicare Part D helps pay for prescription drugs. Unlike Parts A and B, Part D plans are offered through private insurance companies that are approved by Medicare.
Each Part D plan has its own structure, including:
- a monthly premium
- a deductible
- a list of covered drugs, known as a formulary
Because of these differences, there is no single “best” Part D plan for everyone. The right plan depends largely on the specific medications you take, how often you take them, and where you prefer to fill prescriptions.
This is why reviewing Part D options carefully matters. What works well for one person may be a poor fit for another.
Why Medicare Part D Matters
Without Medicare Part D or other qualifying prescription drug coverage, you are generally responsible for paying the full cost of your medications out of pocket.
In simple terms, prescription costs can quietly drain retirement savings over time. Unlike one-time medical expenses, these costs tend to repeat month after month, making them especially important to plan for early.
The Late Enrollment Penalty
One of the most common Medicare mistakes we see is delaying enrollment in Part D without having other qualifying prescription drug coverage.
If you delay Part D enrollment when you are first eligible, Medicare may charge a late enrollment penalty. This penalty is added to your monthly premium and, in most cases, lasts for the rest of your life.
A common surprise for many people is that Medicare does not automatically include prescription drug coverage. Part D must be selected separately, and missing the enrollment window can create long-term financial consequences.
Coming Up Next
Part 3: The Medicare 3-day rule, observation status, and why nursing care coverage often causes confusion.