Medicare Part D is the federally subsidized voluntary prescription drug benefit established under the Medicare Modernization Act of 2003 and codified at Section 1860D-1 through Section 1860D-43 of the Social Security Act (42 USC 1395w-101 et seq.). Since its January 2006 launch, Part D has fundamentally changed senior pharmaceutical access in America by extending federal subsidies to private prescription drug plans. In Georgia, more than 1.5 million seniors and disability beneficiaries receive prescription coverage through Part D in 2026, either through standalone Prescription Drug Plans (PDPs) paired with Original Medicare or through Medicare Advantage Prescription Drug plans (MA-PDs).
The Inflation Reduction Act of 2022 (PL 117-169) transformed Part D more dramatically than any reform since the program's creation. The IRA introduced a $2,000 annual out-of-pocket cap effective January 2025 under Section 11201, the Medicare Prescription Payment Plan (M3P) effective January 2025 under Section 11202 allowing beneficiaries to spread out-of-pocket costs monthly, a $35/month insulin cap effective 2023, elimination of cost-sharing for ACIP-recommended vaccines effective 2023, an expansion of the Low Income Subsidy (Extra Help) to 150 percent of the federal poverty level effective 2024, and Medicare drug price negotiation effective January 2026 for the first 10 selected drugs (Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog).
These changes matter enormously to Georgia families. Before the 2025 reforms, a beneficiary on an oncology specialty drug could face $10,000 to $20,000 in annual out-of-pocket prescription costs. Beginning January 2025, that same beneficiary pays no more than $2,000 per year, with the option to spread that $2,000 across 12 months through M3P. A Georgia senior with diabetes who pays $200/month for insulin now pays no more than $35/month. A Georgia retiree on Eliquis to prevent stroke will see negotiated prices effective January 2026.
This guide walks Georgia families through every aspect of Medicare Part D: the federal framework and how Part D integrates with the rest of Medicare, the 2026 standard benefit design including the deductible, initial coverage phase, and the new $2,000 OOP cap, the difference between standalone PDPs and MA-PDs, the enrollment periods (IEP, AEP, and various SEPs), the late enrollment penalty calculation under Section 1860D-13(b), formulary structure with the six protected classes and tier system, prior authorization and step therapy mechanics, the appeals and exceptions process, the Low Income Subsidy under Section 1860D-14, pharmacy networks and mail-order options, the new Medicare Prescription Payment Plan, the Medicare drug price negotiation program, and Georgia carrier landscape. We close with six worked examples, fifteen common Part D mistakes, a comprehensive FAQ, and a contact list for Georgia families.
::: hero Federal Authority: Section 1860D-1 through 1860D-43 of the Social Security Act (42 USC 1395w-101 et seq.) and 42 CFR Part 423
2025 Out-of-Pocket Cap: $2,000 annual maximum under IRA 2022 Section 11201
Medicare Prescription Payment Plan (M3P): Effective January 2025 under Section 11202. Spread OOP costs across the calendar year.
Late Enrollment Penalty: 1 percent of national base beneficiary premium per month of delay, permanent
Low Income Subsidy (Extra Help): Available to those at 150 percent FPL or below (expanded 2024 under IRA)
Drug Price Negotiation: First 10 drugs effective January 2026 including Eliquis, Jardiance, and Enbrel
Georgia Resources: GeorgiaCares SHIP 1-866-552-4464; Medicare 1-800-MEDICARE; Social Security 1-800-772-1213 :::
The Federal Framework: Section 1860D of the Social Security Act
Part D is governed by Section 1860D of the Social Security Act, originally enacted by the Medicare Modernization Act of 2003 (PL 108-173). The program took effect January 2006. The statutory framework spans Sections 1860D-1 through 1860D-43, covering enrollment, benefits, drug coverage requirements, beneficiary protections, plan relationships, the late enrollment penalty, and the Low Income Subsidy (Extra Help).
The implementing regulations at 42 CFR Part 423 govern all operational aspects: enrollment (42 CFR 423.30-423.56), pharmacy access (42 CFR 423.120), appeals and grievances (42 CFR 423.560-423.638), and the Low Income Subsidy (42 CFR 423.770).
Several major amendments have shaped Part D over the years. MIPPA 2008 (PL 110-275) strengthened consumer protections. The Affordable Care Act 2010 (PL 111-148) began phasing in closure of the coverage gap (donut hole) through manufacturer discounts and federal subsidies. The Bipartisan Budget Act 2018 (PL 115-123) accelerated coverage gap closure for brand-name drugs. The Inflation Reduction Act 2022 (PL 117-169) made the most comprehensive Part D reforms in the program's history.
The CMS Medicare Marketing Guidelines, updated annually, govern Part D plan marketing and broker conduct. The 2024 final rule on broker compensation (89 Fed. Reg. 30448) addressed agent commission disparities and marketing practices. The Medicare Prescription Payment Plan final rule (89 Fed. Reg. 71684, September 2024) implemented the M3P operational requirements.
The 2026 Part D Benefit Design
The standard Part D benefit changed dramatically under the IRA 2022 reforms effective January 2025. The 2026 standard benefit consists of three phases (the previous four-phase structure with the coverage gap is eliminated).
Phase 1: Annual Deductible
Beneficiaries pay 100 percent of drug costs up to the annual deductible. The 2026 standard deductible is $590 (indexed annually). Plans can offer lower deductibles, including $0 deductibles, but most charge near the maximum.
Phase 2: Initial Coverage
After the deductible is met, beneficiaries pay 25 percent coinsurance for covered drugs under the standard benefit. Many plans use copay structures rather than coinsurance, with the typical tier system:
- Tier 1 (preferred generic): $0-$5 copay
- Tier 2 (generic): $5-$15 copay
- Tier 3 (preferred brand): $30-$50 copay
- Tier 4 (non-preferred drug): $60-$100 copay or coinsurance
- Tier 5 (specialty): 25-33 percent coinsurance, often capped
Initial coverage continues until the beneficiary's total out-of-pocket reaches $2,000.
Phase 3: Catastrophic Coverage
Once the beneficiary's accumulated out-of-pocket costs reach $2,000, the catastrophic phase begins. In the catastrophic phase, the beneficiary pays $0 for all covered drugs for the remainder of the calendar year. This is the most significant IRA 2022 change for Georgia beneficiaries with high-cost specialty medications.
Counting Toward the $2,000 OOP Cap
The following count toward the $2,000 maximum:
- Beneficiary's actual payments at the pharmacy
- LIS subsidy payments on behalf of LIS-eligible beneficiaries
- Manufacturer discounts in the initial coverage phase
- Most third-party payments (such as State Pharmaceutical Assistance Programs)
The following do NOT count:
- Plan premium
- Payments for drugs not on the formulary
- Payments for drugs purchased outside the plan network
The Medicare Prescription Payment Plan (M3P)
The Medicare Prescription Payment Plan, effective January 2025 under Section 11202 of IRA 2022, allows Part D beneficiaries to spread their out-of-pocket costs across the calendar year rather than paying at the pharmacy.
How M3P Works
- The beneficiary opts into M3P through their Part D plan
- At the pharmacy, the beneficiary pays $0 for covered drugs
- The plan invoices the beneficiary monthly for accumulated out-of-pocket costs
- The monthly payment is calculated based on remaining months in the year and the beneficiary's remaining maximum exposure
- The beneficiary must pay the monthly invoice to remain in M3P
Example Calculation
A beneficiary who accumulates $1,800 in OOP costs by April 30 has 8 months remaining (May through December). Monthly M3P payment: $1,800 / 8 = $225 per month.
If the beneficiary incurs additional $200 in OOP costs in June, the balance is added and recalculated. The new outstanding balance ($200 + remaining from earlier accumulation) is divided across the remaining months.
M3P Benefits
- Provides predictable monthly budget for medication costs
- Avoids large pharmacy bills in early months when high-cost drugs are dispensed
- No interest or fees charged
M3P Risks
- Failure to pay monthly invoices results in removal from M3P
- Once removed, beneficiary reverts to paying at the pharmacy
- Beneficiaries should opt in only if confident they can manage monthly payments
Who Benefits Most from M3P
M3P is most valuable for beneficiaries with:
- High-cost specialty drugs (cancer therapies, biologics, MS treatments)
- Predictable monthly drug regimens
- Fixed monthly retirement income
- Difficulty paying large pharmacy charges in early months
Part D Plan Types
Standalone Prescription Drug Plans (PDPs)
PDPs are designed for beneficiaries enrolled in Original Medicare. Key features:
- Combined with Original Medicare (and optionally Medigap)
- Premium typically $20-$80/month in Georgia (2026)
- Available state-wide; selected through Medicare.gov plan finder by ZIP code
- 20-30 PDPs typically available per Georgia county
Medicare Advantage Prescription Drug Plans (MA-PDs)
Most MA plans include Part D coverage. Features:
- Combined Medicare Part A + Part B + Part D in one plan
- Premium often $0 (built into MA plan)
- Cannot be combined with standalone PDP
- 40-60 MA-PDs typically available in Atlanta metro
- 15-30 in rural Georgia counties
Plans Without Part D
Some beneficiaries do not enroll in Part D because they have other creditable coverage:
- Employer or retiree health plan with creditable drug coverage
- VA prescription coverage
- TRICARE prescription coverage
- Some Indian Health Service coverage
Beneficiaries without Part D and without creditable coverage face the Part D late enrollment penalty when they later enroll.
Enrollment Periods
Initial Enrollment Period (IEP)
The Part D IEP aligns with the Medicare IEP, a 7-month window beginning 3 months before the month of 65th birthday (or month of Medicare eligibility) and ending 3 months after. Beneficiaries should enroll in Part D during their IEP to avoid the late enrollment penalty.
Annual Election Period (AEP)
The AEP runs October 15 through December 7 each year. During AEP, beneficiaries can:
- Enroll in Part D for the first time (subject to LEP)
- Switch from one PDP to another
- Switch from PDP to MA-PD or vice versa
- Drop Part D coverage
AEP elections are effective January 1 of the following year.
Special Enrollment Periods (SEPs)
Several SEPs allow Part D enrollment changes outside AEP:
- Move outside service area: 2-month SEP
- Lose creditable coverage involuntarily: 2-month SEP
- Qualify for LIS Extra Help: SEP for plan changes
- Qualify for QMB/SLMB/QI: SEP
- Plan termination by CMS: 3-month SEP
- 5-star plan SEP: December 8 through November 30 each year for switching to a 5-star plan
- Disaster declaration SEP: for federal, state, or local disasters
- Exceptional Conditions SEP: under 42 CFR 407.23 (2023 regulation)
2024 LIS Quarterly SEP
Effective January 2024, CMS changed the SEP for LIS-eligible beneficiaries from monthly to quarterly for most categories. Full-benefit dual-eligibles retain monthly SEPs under most circumstances. The change was designed to reduce plan switching driven by broker incentives rather than beneficiary needs.
Late Enrollment Penalty (LEP)
The Part D late enrollment penalty under Section 1860D-13(b) is a permanent surcharge for those who delayed enrollment without creditable coverage.
How the LEP Is Calculated
The penalty is 1 percent of the national base beneficiary premium for each month the beneficiary was eligible but did not enroll in Part D and did not have creditable coverage. The 2026 national base beneficiary premium is approximately $36.78.
Examples (2026 LEP calculation):
- 12 months delay: 12% LEP = $4.41/month for life
- 24 months delay: 24% LEP = $8.83/month for life
- 48 months delay: 48% LEP = $17.65/month for life
- 60 months delay: 60% LEP = $22.07/month for life
The LEP is added to the beneficiary's plan premium permanently. Even if the beneficiary changes plans, the LEP follows.
Creditable Coverage That Avoids LEP
The following coverage is considered creditable and avoids the LEP:
- Employer or union health plan with prescription drug coverage actuarially equivalent to Part D
- VA prescription coverage
- TRICARE prescription coverage
- Some Indian Health Service coverage
- Some Marketplace plans (typically not creditable)
Beneficiaries must keep documentation of creditable coverage in case the LEP is later applied incorrectly.
LEP Reconsideration
If the LEP is applied incorrectly, beneficiaries can request reconsideration:
- Submit a written request to the plan
- Provide documentation of creditable coverage
- Wait for plan determination
- Appeal to Independent Review Entity (IRE) if necessary
Low Income Subsidy (Extra Help)
The Low Income Subsidy (LIS), also called Extra Help, is a federal subsidy for low-income Medicare beneficiaries that pays for Part D premiums, deductibles, and most cost-sharing.
LIS Eligibility (2026)
Income limit: 150 percent of federal poverty level (after IRA 2022 expansion effective 2024)
- $22,890 individual (2026)
- $30,660 couple (2026)
Resource limits:
- $17,220 individual
- $34,360 couple
Some beneficiaries are automatically enrolled in LIS:
- Full Medicaid dual-eligibles
- QMB, SLMB, QI enrollees (Medicare Savings Programs)
- SSI recipients
Full LIS Benefits (2026)
- $0 plan premium (for benchmark plans)
- $0 annual deductible
- $0-$11.20 copays for generic drugs (varies by tier and income)
- $0-$28.00 copays for brand-name drugs
- $0 in catastrophic phase
Applying for LIS
Apply through Social Security Administration:
- Online at ssa.gov/medicare/prescriptionhelp
- Form SSA-1020 paper application
- Phone 1-800-772-1213
- In person at Social Security office
LIS applications are also processed automatically when beneficiaries qualify for QMB, SLMB, or QI through Georgia Medicaid.
Formularies and Drug Coverage
Formulary Definition
A formulary is the list of drugs a Part D plan covers. Each plan has its own formulary, subject to CMS approval. Formularies must:
- Cover at least 2 drugs in each therapeutic category
- Cover all drugs in 6 protected classes
- Use therapeutic alternatives appropriately
- Comply with USP MMG (Medicare Model Guidelines)
The Six Protected Classes
Part D plans must cover "all or substantially all" drugs in these six classes:
- Antidepressants
- Antipsychotics
- Anticonvulsants
- Antiretrovirals (HIV/AIDS treatments)
- Immunosuppressants (transplant medications)
- Antineoplastics (cancer treatments)
This protection ensures access to critical medications without delays from restricted formulary access.
Tier Structure
Most Part D plans use a 5-tier formulary structure:
- Tier 1 (preferred generic): lowest cost-sharing, generic drugs the plan prefers
- Tier 2 (generic): generic drugs not on tier 1
- Tier 3 (preferred brand): brand-name drugs the plan prefers
- Tier 4 (non-preferred drug): higher-cost brand or generic drugs
- Tier 5 (specialty): very high-cost drugs (typically over $950 per month wholesale)
Formulary Restrictions
Plans can apply utilization management to formulary drugs:
- Prior authorization (PA): plan approval required before covering
- Step therapy: must try preferred drug first before covering specific drug
- Quantity limits: restriction on amount dispensed per fill
- Mail-order required: some maintenance medications must be filled by mail-order
Appeals and Exceptions Process
Part D has a comprehensive appeals process under 42 CFR 423.560-423.638 with five levels.
Level 1: Coverage Determination
The initial request to the plan for coverage of a drug. The plan must respond within:
- 72 hours for standard request
- 24 hours for expedited request (when health is at risk)
Level 2: Redetermination
If the coverage determination is unfavorable, the beneficiary can request redetermination by the plan within 60 days. The plan must respond within:
- 7 days for standard redetermination
- 72 hours for expedited redetermination
Level 3: Independent Review Entity (IRE)
If redetermination is unfavorable, the case is reviewed by Maximus, the CMS-contracted IRE:
- 7 days for standard review
- 72 hours for expedited review
Level 4: Administrative Law Judge (ALJ) Hearing
If IRE is unfavorable, beneficiaries can request ALJ hearing (amount in controversy > $190 in 2026):
- Hearing typically by telephone or video
- 90 days for ALJ decision
Level 5: Medicare Appeals Council or Federal Court
Final levels of appeal. Federal court requires amount in controversy > $1,840 (2026).
Tiering Exception
Beneficiaries can request that a non-preferred drug be covered at preferred tier cost-sharing. Must demonstrate:
- Other formulary drugs are not as effective
- Other formulary drugs have caused adverse effects
- Medical necessity for the requested drug at preferred tier
Formulary Exception
Beneficiaries can request coverage of a drug not on the formulary at all. Must demonstrate:
- All formulary alternatives have been ineffective or are contraindicated
- Medical necessity for the specific drug
Quantity Limit Exception
Beneficiaries can request higher quantity than the plan's quantity limit. Must demonstrate medical necessity for the higher dose or quantity.
Pharmacy Networks
Preferred Pharmacies
Lower cost-sharing for plan members. Often national chains (CVS, Walgreens, Walmart) or regional chains. May offer:
- 30-day supplies at reduced copay
- 90-day supplies at further-reduced cost
Standard Pharmacies
Higher cost-sharing than preferred but still in network. Useful when preferred pharmacies are not accessible.
Out-of-Network
Generally no coverage except emergencies. Beneficiary pays full price.
Mail-Order
90-day supplies for maintenance medications. Often lowest cost-sharing. Best for:
- Stable chronic medications
- Medications with consistent monthly need
- Beneficiaries with reliable mail delivery
Medicare Drug Price Negotiation
Section 11401 of IRA 2022 authorized Medicare's first-ever drug price negotiation. CMS selects drugs based on Medicare spending and lack of competitive alternatives.
First 10 Negotiated Drugs (Effective January 2026)
- Eliquis (apixaban) : anticoagulant
- Jardiance (empagliflozin) : diabetes/heart failure
- Xarelto (rivaroxaban) : anticoagulant
- Januvia (sitagliptin) : diabetes
- Farxiga (dapagliflozin) : diabetes
- Entresto (sacubitril/valsartan) : heart failure
- Enbrel (etanercept) : rheumatoid arthritis
- Imbruvica (ibrutinib) : cancer
- Stelara (ustekinumab) : psoriasis/Crohn's
- Fiasp/NovoLog (insulin aspart) : diabetes
Maximum Fair Prices (MFPs)
CMS-negotiated prices effective January 2026:
- Manufacturers cannot charge more than MFP
- All Part D plans must provide drugs at MFP
- LIS-eligible beneficiaries also benefit from MFPs
Future Drug Selections
- 2027: additional 15 drugs (selected 2025)
- 2028: additional 20 drugs including Part B physician-administered
- 2029 onward: 20 additional drugs per year
Georgia Part D Carrier Landscape
Major PDP Carriers in Georgia (2026)
- Humana : multiple PDPs, strong Georgia presence
- WellCare (Centene) : value-focused PDPs
- AARP UnitedHealthcare : comprehensive PDPs
- SilverScript (Aetna/CVS) : large national presence
- Cigna : moderate Georgia presence
- Anthem BCBS of Georgia : regional carrier
- Mutual of Omaha Rx : focused on lower-premium plans
- Express Scripts : PBM-affiliated plans
Plan Variety
- 20-30 PDPs typically available per Georgia county
- 40-60 MA-PDs in Atlanta metro
- 15-30 MA-PDs in rural Georgia
- Multiple plans at various price points
2026 Premium Ranges in Georgia
- Basic plans: $0-$25/month
- Standard plans: $25-$50/month
- Enhanced plans: $50-$90/month
- LIS benchmark plans: $0 for LIS-eligible
::: callout Key Takeaways for Georgia Medicare Part D
Part D is federally regulated under Section 1860D of the Social Security Act with implementing regulations at 42 CFR Part 423.
The 2025 $2,000 OOP cap under IRA 2022 Section 11201 is the most important Part D protection in two decades. Beneficiaries with high-cost specialty drugs pay no more than $2,000 per year.
The Medicare Prescription Payment Plan (M3P) effective January 2025 allows beneficiaries to spread OOP costs across the calendar year ($2,000 / 12 = $167/month maximum).
The Part D late enrollment penalty under Section 1860D-13 is 1 percent per month of delay, permanent. Enroll during your IEP or with creditable coverage to avoid LEP.
The Low Income Subsidy (Extra Help) under Section 1860D-14 was expanded to 150 percent FPL effective 2024. Full LIS provides $0 premium, $0 deductible, and minimal copays.
All Part D plans must cover six protected classes: antidepressants, antipsychotics, anticonvulsants, antiretrovirals, immunosuppressants, and antineoplastics.
Standalone PDPs combine with Original Medicare (and optionally Medigap). MA-PDs combine Part D into Medicare Advantage plans. You cannot have both a standalone PDP and an MA-PD.
The AEP runs October 15 through December 7 each year for plan changes. Coverage from AEP elections is effective January 1.
Formulary appeals and exceptions (tiering, formulary, quantity limit) allow beneficiaries to request coverage when plans deny or restrict access to needed medications.
Medicare drug price negotiation under IRA 2022 takes effect January 2026 for the first 10 drugs including Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. :::
Worked Examples
Margaret 65 Atlanta: Basic Enrollment
Margaret is newly eligible for Medicare and healthy. She takes one statin (atorvastatin 20mg) and one BP medication (lisinopril 10mg). Her PCP confirms both are inexpensive generics.
During her IEP, Margaret reviews PDPs at Medicare.gov:
- WellCare Value Script: $20/month premium, $590 deductible (waived for some preventive), $0 tier 1 generic
- Humana Walmart Value Rx: $0/month premium, $590 deductible, $0 tier 1 generic at Walmart
- AARP UHC Walgreens Saver Rx: $0/month premium, $0 tier 1 generic
Margaret chooses WellCare Value Script for the broader pharmacy network. Her annual cost:
- Premium: $20 x 12 = $240
- Deductible: $0 (her drugs are tier 1 preventive)
- Copays: $0
- Total: $240
The $2,000 OOP cap is irrelevant to Margaret because of her low utilization, but she has the protection if her medication needs change.
Robert 70 Savannah: Late Enrollment Penalty
Robert enrolled in Original Medicare at age 65 in 2020 but did NOT enroll in Part D. He paid out of pocket for occasional medications and assumed he could enroll later "if needed."
Five years later (60 months) in 2025, Robert is diagnosed with high cholesterol and prescribed a statin. He realizes he needs Part D coverage and applies during AEP 2025 for January 2026 coverage.
Plan calculates LEP:
- 60 months delay x 1% = 60% LEP
- 2026 national base beneficiary premium: $36.78
- 60% of $36.78 = $22.07/month
- LEP added to plan premium permanently
Robert chooses a $25/month PDP. His total monthly premium: $25 + $22.07 = $47.07/month for life. Over 20 years of Medicare, the LEP costs him approximately $5,300.
Linda 67 Macon: High-Cost Drug + $2,000 Cap
Linda is diagnosed with rheumatoid arthritis. Her rheumatologist prescribes Enbrel (etanercept), with a list price of approximately $9,000 per month.
Before the IRA 2025 reform, Linda would have faced:
- $590 deductible
- 25% coinsurance in initial coverage = $2,100+/month
- Coverage gap with manufacturer discounts
- 5% catastrophic phase = $450/month even after large initial costs
- Annual total: $7,000-$10,000
Under IRA 2025 reform, Linda's experience is dramatically different:
- January 2026: Enbrel filled, pays $590 deductible + 25% coinsurance until reaching $2,000 OOP
- Reaches $2,000 OOP by mid-to-late January
- February through December: $0 for Enbrel
- Annual total: $2,000 (vs. $7,000-$10,000 before)
Note: Enbrel is one of the first 10 drugs subject to Medicare price negotiation effective January 2026. The Maximum Fair Price will reduce overall plan costs and may further reduce Linda's exposure.
Charles 73 Augusta: M3P Monthly Spread
Charles is on multiple specialty medications totaling approximately $2,000 in annual OOP costs. He cannot afford $2,000 in pharmacy charges in January or February before reaching the cap.
During AEP 2025, Charles enrolls in WellCare PDP and opts into M3P.
January 2026:
- Charles fills his medications at the pharmacy
- He pays $0 at the pharmacy
- Plan calculates expected annual OOP exposure: $2,000
- Spread over 12 months: $2,000 / 12 = $167/month
February through December:
- Charles pays $167/month invoice to his plan
- Total annual: $2,000 (same as without M3P)
- But predictable monthly budget
Patricia 65 Columbus: LIS Extra Help
Patricia's only income is $1,400/month from Social Security retirement ($16,800/year). The 2026 federal poverty level is approximately $15,650 for a single person. Patricia's income is 107 percent FPL, below the 150 percent threshold for full LIS.
After the IRA 2022 expansion effective 2024, Patricia qualifies for full LIS:
- $0 premium for benchmark PDPs
- $0 deductible
- $4.50 generic copays / $11.20 brand copays
- $0 in catastrophic phase
DCH automatically coordinates Patricia's QMB enrollment with SSA LIS processing.
Patricia chooses Humana Premier Rx benchmark plan. Her annual Part D cost:
- Premium: $0
- Deductible: $0
- Estimated copays for her 4 medications: $35/year
- Total: $35
Without LIS, Patricia would have paid approximately $700-$1,000/year for the same coverage.
Henry 75 Athens: MA-PD to PDP Switch
Henry has been enrolled in Humana MA-PD for 3 years with a $0 premium. His new prescription for a specialty medication is not on the Humana formulary, requiring step therapy and prior authorization.
Henry compares standalone PDPs available with Original Medicare:
- WellCare Wellness Rx: $0 premium, but doesn't cover his drug
- Humana Premier Rx: $84/month premium, covers his drug
- AARP UHC Preferred Rx: $44/month premium, covers his drug, lower copays
Henry decides to switch to Original Medicare + AARP UHC Preferred Rx PDP + Medigap Plan G during AEP 2025.
Switch effective January 1, 2026:
- AARP UHC PDP: $44/month
- Plan G Medigap: $165/month (assuming standard rate)
- Part B premium: $191.50/month
- Total: $400.50/month
Compared to his MA-PD ($191.50/month Part B + $0 plan), Henry pays approximately $200 more per month but gains:
- Full medication coverage for his specialty drug
- Any Medicare-accepting provider nationwide
- No prior authorization for most services
15 Common Part D Mistakes
Not enrolling in Part D when first eligible. The LEP applies for life if you delay without creditable coverage.
Not verifying formulary coverage of current medications before enrolling. Formularies vary widely. A drug covered by Plan A may not be covered by Plan B.
Choosing plan based on premium alone. A $0 premium plan can cost more annually due to higher copays and limited drug coverage.
Not using preferred pharmacies for lower cost-sharing. Switching from standard to preferred pharmacy can cut copays in half.
Not considering mail-order for maintenance medications. Mail-order typically offers 90-day supplies at the lowest cost-sharing.
Missing the AEP October 15 - December 7 enrollment window. Outside AEP, plan switching generally requires an SEP.
Not understanding the difference between PDP and MA-PD. You cannot have both. Enrolling in a standalone PDP automatically terminates MA-PD.
Not exploring LIS Extra Help when income-eligible. The 2024 expansion to 150 percent FPL means many more Georgia seniors qualify.
Confusing the $2,000 OOP cap with overall medical OOP. The cap applies only to Part D prescription drugs, not Medicare medical services.
Not opting into M3P when high-cost drugs cause budget strain. M3P spreads $2,000 max OOP across 12 months ($167/month maximum).
Not appealing formulary denials. Tiering exceptions, formulary exceptions, and quantity limit exceptions are commonly successful with proper documentation.
Failing to use the 2024 LIS quarterly SEP. LIS-eligible beneficiaries can change plans quarterly to optimize coverage.
Not coordinating Part D with creditable employer coverage. If your employer has creditable drug coverage, you can delay Part D without LEP. If not, you need Part D to avoid LEP.
Not checking Star Ratings. Higher-rated plans tend to have better customer service, fewer member complaints, and stronger formularies.
Enrolling in MA-PD without verifying drug coverage. MA-PD formularies vary widely. A drug covered by one MA-PD may not be covered by another.
Quick Reference
Federal Authority: Section 1860D-1 through 1860D-43 SSA (42 USC 1395w-101 et seq.), 42 CFR Part 423 2026 Standard Deductible: $590 2025+ OOP Maximum: $2,000 (indexed annually) Late Enrollment Penalty: 1% per month delay, permanent LIS Income Threshold: 150 percent FPL (after 2024 expansion) AEP: October 15 - December 7 MA-OEP: January 1 - March 31 (existing MA enrollees) Six Protected Classes: antidepressants, antipsychotics, anticonvulsants, antiretrovirals, immunosuppressants, antineoplastics Drug Price Negotiation (2026): Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, Fiasp/NovoLog M3P: Effective January 2025, spreads OOP across calendar year
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What is Medicare Part D?
Medicare Part D is the federally subsidized voluntary prescription drug benefit established under MMA 2003 (PL 108-173) and codified at Section 1860D of the Social Security Act. Part D is delivered through private prescription drug plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs).
When can I enroll in Part D?
The Initial Enrollment Period (IEP) is a 7-month window around your 65th birthday or Medicare eligibility. The Annual Election Period (AEP) is October 15 through December 7 each year. Special Enrollment Periods (SEPs) apply for circumstances like moving, losing creditable coverage, or qualifying for LIS.
What is the $2,000 OOP cap?
Under IRA 2022 Section 11201 effective January 2025, all Part D beneficiaries have a $2,000 annual out-of-pocket maximum for prescription drug costs. Once you reach $2,000 in covered drug costs, you pay $0 for the rest of the calendar year.
What is the Medicare Prescription Payment Plan (M3P)?
M3P, effective January 2025 under Section 11202 of IRA 2022, allows you to spread your Part D out-of-pocket costs across the calendar year. Instead of paying at the pharmacy, you receive monthly invoices from your plan for accumulated costs.
What is the Part D late enrollment penalty?
Under Section 1860D-13, the LEP is 1 percent of the national base beneficiary premium for each month you delayed enrolling without creditable coverage. The penalty is permanent. For example, a 24-month delay results in 24% LEP added to your plan premium for life.
What is creditable coverage?
Creditable coverage is prescription drug coverage that is actuarially equivalent to Part D. Common examples: employer or union health plans, VA prescription coverage, TRICARE. Marketplace plans are typically NOT creditable. Maintaining creditable coverage avoids the LEP.
What is the Low Income Subsidy (LIS)?
LIS, also called Extra Help, is a federal subsidy under Section 1860D-14 that pays Part D premiums, deductibles, and most cost-sharing for low-income beneficiaries. Eligibility limit is 150 percent FPL (expanded under IRA 2022 effective 2024).
Who automatically gets LIS?
Beneficiaries automatically enrolled in LIS include: full Medicaid dual-eligibles, QMB enrollees, SLMB enrollees, QI enrollees, and SSI recipients. Other low-income beneficiaries can apply through Social Security.
What is a formulary?
A formulary is the list of drugs a Part D plan covers. Each plan has its own formulary (subject to CMS approval). All plans must cover at least 2 drugs in each therapeutic category and all or substantially all drugs in the six protected classes.
What are the six protected classes?
Antidepressants, antipsychotics, anticonvulsants, antiretrovirals (HIV/AIDS), immunosuppressants (transplant), and antineoplastics (cancer). All Part D plans must cover essentially all drugs in these classes.
What is prior authorization?
Prior authorization (PA) is a plan requirement for approval before covering certain drugs. The plan reviews medical necessity. PA approval can be requested by the prescriber. Standard PA timeline: 72 hours for coverage determination.
What is step therapy?
Step therapy requires you to try a less expensive preferred drug before the plan will cover a more expensive drug. You can request a step therapy exception if you have a medical reason the preferred drug is not appropriate.
How do I appeal a Part D denial?
Five levels of appeal: (1) coverage determination by the plan, (2) redetermination by the plan, (3) Independent Review Entity (Maximus) review, (4) ALJ hearing if amount > $190, (5) federal court if amount > $1,840. Expedited timelines apply when health is at risk.
What is a tiering exception?
A tiering exception requests that a non-preferred drug be covered at preferred tier cost-sharing. You must demonstrate that formulary drugs at the preferred tier are not as effective or have caused side effects.
What is a formulary exception?
A formulary exception requests coverage of a drug not on the plan's formulary. You must demonstrate medical necessity and that formulary alternatives are not appropriate.
What is the difference between PDP and MA-PD?
A standalone Prescription Drug Plan (PDP) is purchased separately and combined with Original Medicare. An MA-PD is a Medicare Advantage plan that includes Part D. You cannot have both. Most Georgia MA enrollees are in MA-PD plans.
Does Part D cover insulin?
Yes. Under IRA 2022 Section 11406, insulin is capped at $35 per month per prescription for all Part D beneficiaries (effective 2023). This applies regardless of formulary tier.
Does Part D cover vaccines?
Yes. Under IRA 2022 Section 11401, ACIP-recommended adult vaccines (including shingles, RSV, Tdap) are covered at $0 cost-sharing in Part D plans (effective 2023).
What drugs are subject to Medicare drug price negotiation in 2026?
The first 10 drugs are: Eliquis (apixaban), Jardiance (empagliflozin), Xarelto (rivaroxaban), Januvia (sitagliptin), Farxiga (dapagliflozin), Entresto (sacubitril/valsartan), Enbrel (etanercept), Imbruvica (ibrutinib), Stelara (ustekinumab), and Fiasp/NovoLog (insulin aspart).
Can I switch Part D plans during the year?
Outside AEP and MA-OEP, switching generally requires an SEP. Common SEPs: move outside service area, lose creditable coverage, qualify for LIS, qualify for QMB/SLMB/QI, 5-star plan SEP. LIS-eligible beneficiaries have a quarterly SEP under 2024 rule changes.
How do I find a Part D plan in Georgia?
Use the Medicare.gov plan finder, search by your ZIP code and current medications. The tool ranks plans by estimated annual cost. GeorgiaCares SHIP (1-866-552-4464) provides free unbiased comparison help.
What if my pharmacy is not in the plan's network?
Out-of-network pharmacies typically provide no coverage (except emergencies). Switch to an in-network pharmacy or change plans during AEP. Use the plan finder to verify pharmacy network before enrolling.
What is mail-order pharmacy?
Mail-order pharmacy provides 90-day supplies of maintenance medications delivered to your home. Often offers the lowest cost-sharing. Best for stable chronic medications.
Can I combine Medigap and Part D?
Yes. Medigap supplements Original Medicare for medical costs (Part A and Part B cost-sharing). Part D covers prescription drugs separately. Many Georgia beneficiaries combine Original Medicare + Medigap Plan G + Part D PDP.
What does Medicare drug price negotiation mean for me?
If you take one of the 10 negotiated drugs effective January 2026, your plan must offer the drug at the Maximum Fair Price (MFP). This will likely reduce your copay or coinsurance for these drugs. Future years add more drugs each year.
Where can I get help with Part D in Georgia?
GeorgiaCares SHIP at 1-866-552-4464 provides free, unbiased Medicare counseling in all 159 Georgia counties. Medicare.gov plan finder allows direct comparison. Social Security 1-800-772-1213 handles LIS applications. :::
::: cta Georgia Medicare Part D Resources
Federal Medicare
- Medicare 1-800-MEDICARE (1-800-633-4227)
- Medicare.gov plan finder
- Social Security Administration 1-800-772-1213 (LIS applications)
- CMS Region IV Office (Atlanta)
- Medicare Beneficiary Ombudsman
Georgia State Resources
- DCH Medicaid Member Services 1-866-211-0950
- Georgia Office of Insurance Commissioner 1-800-656-2298
- GeorgiaCares SHIP 1-866-552-4464
- Palmetto GBA Georgia MAC 1-855-696-0705
Counseling and Advocacy
- AARP Georgia 1-866-295-7283
- Medicare Rights Center 1-800-333-4114
- Center for Medicare Advocacy 1-860-456-7790
- Justice in Aging 202-289-6976
Legal Help
- Atlanta Legal Aid Senior Citizens Law Project 404-377-0701
- Georgia Legal Services Program 1-800-498-9469
- 211 Georgia
- Eldercare Locator 1-800-677-1116 :::
This article is part of Brevy's comprehensive Georgia Medicaid and Medicare resource library. For more on coordinated Medicare benefits, see our deep dives on the Part D Low Income Subsidy, Medicare Advantage, Medigap, Medicare enrollment periods, the Part B late enrollment penalty, and Medicare Savings Programs. Visit brevy.com for the full library.
Disclaimer: This article provides educational information about Medicare Part D prescription drug coverage and Georgia's coordinated Medicaid programs. It is not legal, financial, or medical advice. Federal and state rules change frequently, plan benefits and formularies vary by carrier and ZIP code, and individual circumstances vary. For specific guidance, contact GeorgiaCares SHIP, Medicare 1-800-MEDICARE, or a licensed insurance broker. Last verified: May 2026.