Medicare Supplement

Three Medicare pieces, one drug rule: don't miss Part D

SUN CITY, Ariz. — If you've chosen Original Medicare and paired it with a Medigap policy, you might feel set. But there's a gap in that setup that catches people every year: Medigap does not pay for prescription drugs. To get drug coverage, you need to add a stand-alone Part D plan — and the timing of that decision matters more than most folks realize.

Sun City has one of the country's most Medicare-experienced populations, so the three-piece setup — Original Medicare, Medigap, and Part D — is common here. Here's how the pieces fit, and how to sidestep the Part D late enrollment penalty.

What each of the three pieces actually does

Think of it as a stool with three legs:

• Original Medicare (Part A and Part B) is the federal program itself. Part A covers hospital care; Part B covers doctors, outpatient care, and many preventive services. It pays most of the bill but leaves deductibles and coinsurance to you.
• A Medigap policy (also called Medicare Supplement Insurance) is sold by private insurers. It helps pay the deductibles, copays, and coinsurance that Original Medicare leaves behind. It does not cover prescription drugs you pick up at the pharmacy.
• A stand-alone Part D plan is a separate private drug plan that works alongside Original Medicare and Medigap. It's how people in this setup get prescription coverage.

If you're on Medicare Advantage instead, the rules are different — most Advantage plans bundle drug coverage in. This article is about the Original Medicare route.

Why Medigap doesn't cover drugs

This trips up a lot of newcomers. Medigap plans sold today are not allowed to include prescription drug coverage. Older Medigap policies once did, but that changed years ago under federal rules. So even a comprehensive Medigap policy won't help you at the pharmacy counter. Drug coverage is Part D's job — full stop.

That means if you have Original Medicare plus Medigap and no Part D plan and no other "creditable" drug coverage, you're paying full retail for medications. And you may be racking up a late penalty without knowing it.

The Part D late enrollment penalty — and how to avoid it

Medicare charges a late enrollment penalty if you go 63 days or more in a row, after your Initial Enrollment Period, without Part D or other creditable drug coverage. Creditable coverage is drug coverage that Medicare considers at least as good as a standard Part D plan — for example, some employer, union, or VA drug benefits.

The penalty isn't a one-time fee. It's added to your Part D premium for as long as you have Part D. It's calculated as 1% of the "national base beneficiary premium" for every full month you went without coverage, and it can grow the longer you wait.

To stay in the clear:

• Enroll in Part D during your Initial Enrollment Period — the 7-month window around your 65th birthday.
• If you're keeping employer or other creditable drug coverage past 65, hold onto the notice from that plan confirming it's creditable. You'll want it later.
• If you lose creditable coverage, sign up for Part D within 63 days.
• Otherwise, use the Annual Enrollment Period, October 15 – December 7, to pick or switch a Part D plan for the next year.

2026 Part D basics worth knowing

A few program-level figures for 2026 will help you compare plans on medicare.gov:

• The maximum annual deductible any Part D plan can charge is $615.
• Once your out-of-pocket spending on covered drugs hits $2,100, you pay nothing more for covered drugs the rest of the year. That's the new cap.
• The old "donut hole" coverage gap was eliminated in 2025. Part D now has three phases: deductible, initial coverage, and catastrophic.
• The Medicare Prescription Payment Plan lets you spread your drug costs into monthly payments across the year instead of paying big amounts at the pharmacy at once. It's optional and free to opt into.
• Higher-income enrollees pay an IRMAA surcharge on top of the Part D premium. In 2026, IRMAA starts above $109,000 in income for a single filer (based on your tax return from two years earlier).

What's available around Sun City

Sun City sits in Maricopa County, where Medicare beneficiaries have a wide selection of stand-alone Part D plans from multiple insurers, along with Medigap options sold by private carriers under Arizona's rules. Plan lineups and pricing change every year, so the plan you liked last year may not be the strongest fit for your prescriptions this year. It's worth running your drug list through the Medicare Plan Finder at medicare.gov each fall during the October 15 – December 7 window.

Star Ratings, published by CMS, can also help you gauge a plan's quality and customer service — they're a signal, not a verdict.