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Nearly all of the 55 million Medicare beneficiaries enrolled in Part D prescription drug plans are overpaying by thousands of dollars a year, according to an expert, largely because they choose plans based on monthly premiums rather than total annual costs.
“The data shows that 95% of people in Medicare are overspending, and that’s horrifying because people have tight budgets,” Katy Votava, president of Goodcare and author of “Making the Most of Medicare,” said in a recent Decoding Retirement podcast.
Part D plans cover the cost of prescription drugs, including many recommended shots or vaccines. These plans are run by private insurance companies that follow rules set by Medicare and can be offered as standalone plans or bundled with a Medicare Advantage plan.
Data from KFF, as of 2025, shows that 54.8 million beneficiaries were enrolled in Part D plans, with 58% enrolled in Medicare Advantage plans and 42% in standalone prescription drug plans.
Enrollment is highly concentrated, as five firms — UnitedHealth (UNH), Centene (CNC), Humana (HUM), CVS Health (CVS), and Cigna (CI) — cover 73.5% of Part D enrollees. For 2025, the Part D base beneficiary premium was $36.78, and the maximum out-of-pocket deductible was $590.
According to Votava, the most expensive and most common mistake beneficiaries make is picking a plan based solely on its monthly premium.
“With a prescription drug plan, if you pick a plan because it’s the cheapest plan, it may not cover all your medications as best as possible, and then you actually wind up spending more in total out of pocket,” she said.
Read more: How to add or adjust your Medicare coverage
Given the recent changes to Medicare Part D plans in 2026, Votava recommended taking the time now to get organized, as procrastination can be costly. She outlined some key steps for finding the right Part D plan during Medicare’s open enrollment period, which ends Dec. 7.
First, create an accurate, specific list of all current medications (using generic names, not brand names).
Medications are typically organized into six tiers, with tier one being the least expensive and tier six reserved for the most costly specialty drugs. These tier assignments vary significantly between plans — a medication in tier two with one insurer might be tier four with another.
The next step is to set up a “My Medicare” account at Medicare.gov, which auto-populates current medications for existing beneficiaries.
