Medicare Prescription Drug Plans (Part D) are optional policies offered by private insurance companies that are approved by Medicare, designed to help beneficiaries cover the cost of outpatient self-administered prescription drugs. You can get this coverage either as a standalone Prescription Drug Plan (PDP) to go with Original Medicare or a Medigap plan, or it may be included as part of a Medicare Advantage Plan (MA-PD). Each plan maintains a specific list of covered drugs, called a formulary, often structured in tiers that dictate your cost-sharing (copayments or coinsurance), and enrollees' costs typically move through annual stages: a deductible phase, an initial coverage phase, and a Catastrophic Coverage phase, where your spending is capped for the year. Enrollment is voluntary, but a permanent late enrollment penalty is usually applied to your premium if you delay joining and lack other creditable drug coverage.