Medicare Part D pays for your subscription drugs, so it's important to pick a plan where most, if not all, the drugs you need are listed on the formulary for the plan. The formulary is a list of drugs the insurer will cover.

Coverage for all drugs is not equal. Each insurer has its own list of preferred drugs; some are generic and some are brand-name drugs. Generic drugs go by their scientific name and are usually produced by multiple drug companies. Brand-name drugs are given a marketing name, such as Crestor (rosuvastatin calcium) or Celebrex (celecoxib). Most brand-name drugs are still under patent protection and more expensive because there are not yet any generic equivalents. Generic drugs are copies of the brand-name drugs and match their brand-name counterpart. (For more, see What are the differences between brand name drugs and generic drugs?.)

In addition to differentiating between generic and brand-name drugs, Medicare Part D insurers also put drugs in tiers. In tier 1 (preferred generic drugs) the insurer will pay most of your drug costs. There are also tier 2 (generic, but not preferred), tier 3 (preferred brand), tier 4 (non-preferred brand) and tier 5 (specialty drugs), as well as some no-tier drugs. As you go up in number, so do your out-of-pocket costs for drug co-pays. In fact, the no-tier drugs may not be covered at all. (For more, see Getting Through the Medicare Part D Maze.)

Some other key terminology you need to consider when looking for the best Medicare Part D plan include:

• Premium – the monthly amount you will pay for the insurance
• Deductible – the amount you must spend on drugs before your insurance company starts to pay. In 2016 this can vary from zero to $360.
• Co-pay – This can be a dollar amount or a percentage amount. Each plan varies.
• Coverage gap – In 2016, once your plan spends $3,310 on covered drugs, you will pay 58% of your generic drug costs and 45% of your brand-name drug costs. Many people never enter the coverage gap or enter late in the year. Others using expensive drugs can find themselves in the coverage gap early in the year. Once you've spent $4,850 in 2016 you will qualify for catastrophic coverage and get your drugs for a small co-payment for the rest of the year. This gap is known as the Medicare doughnut hole.

The best way to find the Medicare Part D plan that will cover you in the most cost-effective way is to search on Medicare.gov.

Step 1: On the front page of Medicare.gov click on the green box that reads Find health & drug plans. It will ask for your zip code. You don't need to put your personal information in for a personalized search; the zip code is sufficient. Just enter your zip code and click on Find Plans. For this search a zip code in the Orlando, Fla., area was entered.

Step 2: You will see two questions on this page. To keep things simple and avoid having to put in personal information, just pick I don't have any Medicare coverage yet and I don't get any Extra Help. (If you think you may qualify for extra help with your premiums and drug costs, you may instead want to call 800-633-4227.) Then click on Continue to Plan Results.

Step 3: Enter Your Drugs: This is the most important step, so be sure to complete it as accurately as possible. For this demonstration we entered three common drugs seniors take for blood pressure: Lisinopril, Metoprolol Succinate and Telmisartan. Once you've finished entering your drug list, click on My Drug List is Complete.

Step 4: Pick the pharmacy or pharmacies you prefer nearby. Then click on Continue to Plan Results.

Step 5: You will see the summary of your results. To find drug plans only, check Prescription Drug Plans (with Original Medicare) and click on Continue to Plan Results.

You will then see a list of all the plans in your area. In the screen shot below you will see the three plans with the Lowest Estimated Annual Retail Drug Cost, which is the default screen and the best one to use. Other options can be chosen using the drop-down list that you can access by clicking on the arrows after cost.

In this search the cheapest annual plan will be First Health Part D Value Plus. In this case the total annual cost will be $520 per year. It has a $34.30 monthly premium and no annual drug deductible, which means it will start paying for the cost of your drugs from day one.

The second-cheapest annual plan is the Cigna-HealthSpring Rx Secure-Extra. Its annual costs are $259 higher, at $779. It has a $50.20 monthly premium and a $250 deductible, which means you will have to pay $250 toward your drugs before the plan will pay anything.

The third-cheapest annual plan is Humana Walmart RX Plan. While at first glance that might look like the best option because it has the cheapest monthly premium, $18.40, its total annual cost is $835, which is $315 higher. One of the key reasons for the higher annual cost is that this plan has a $360 deductible, so you must pay $360 toward your drugs before the plan will pay anything.

You can dig down deeper to see other reasons for the cost differences by selecting the plans you want to compare and clicking on Compare Plans. In that list you can find which pharmacy will give you the lowest costs. For some plans it will be one of your local pharmacies; for others it may be the plan's mail-order services.

When comparing costs for this demonstration, we reviewed the lowest-cost plan, First Health, which had total costs of $519.60 when used at Walgreens, though the total costs jumped to $891.60 when used at the Publix Pharmacy. It's important to look at this additional detail to be sure that you pick not only the best plan but also the best pharmacy for the plan you choose. (Make sure it's a pharmacy you can get to, if you're not going to use only mail order.)

Though drug coverage is far from equal, it should be possible to get the Medicare Part D plan that's right for you. The important thing is to look at all the variables before deciding which plan best fits your needs.