Medicare Part D
Prescription Drug Plans
Medicare Part D helps cover the cost of prescription drugs. It is offered by private insurance companies approved by Medicare, either as a standalone plan or built into a Medicare Advantage plan.
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Every plan has its own drug list
The list of covered drugs is called a formulary, and it is organized into tiers. Two plans can cover the same drug at very different costs.
Pharmacy choice affects price
Plans often have preferred and standard pharmacies, and the same prescription can cost a different amount depending on which you use.
A yearly cap on what you pay
Part D includes an annual limit on what you pay out of pocket for covered drugs. Once you reach it, you pay nothing more for covered drugs that year.
Help may be available
People with limited income and resources may qualify for the Extra Help program, which assists with Part D costs.
Two ways to get Part D coverage
A standalone Prescription Drug Plan, sometimes called a PDP, is added alongside Original Medicare.
Alternatively, most Medicare Advantage plans already include prescription drug coverage. Those are often called MA-PD plans, and in that case a separate Part D plan is generally not needed.
How costs are structured
- Monthly premium
- What you pay for the plan itself. This varies by plan and by area.
- Annual deductible
- An amount you may pay before the plan starts paying its share. Not every plan has one.
- Copays and coinsurance
- What you pay for each prescription, which depends on the drug’s tier and the pharmacy you use.
- Out of pocket limit
- A yearly cap on your covered drug costs, after which the plan covers them in full for the rest of the year.
The late enrollment penalty
- What triggers it
- Going 63 days or more in a row without Part D or other creditable prescription drug coverage after your Initial Enrollment Period ends.
- How long it lasts
- The penalty is added to your monthly Part D premium and generally continues for as long as you have Part D coverage.
- Creditable coverage
- Drug coverage from an employer, a union, or certain other sources may count as creditable, which avoids the penalty. Your plan should tell you each year whether yours does.
- Why it matters
- People who take no prescriptions at 65 often skip Part D and are surprised later. Enrolling when first eligible avoids the penalty even if you use little coverage at first.
Who can enroll
- You are entitled to Medicare Part A or enrolled in Part B.
- You live in the plan’s service area.
- You enroll during a period when you are eligible to join or change a plan.
When you can enroll
Initial Enrollment Period
7 months around your 65th birthday
Begins 3 months before the month you turn 65, includes that month, and ends 3 months after. This is when most people first enroll, and enrolling early in the window generally means coverage starts sooner.
Annual Enrollment Period
15 October to 7 December
Each autumn you can join, switch, or drop a Medicare Advantage or Part D plan. Changes made during this window generally take effect on 1 January.
Medicare Advantage Open Enrollment
1 January to 31 March
If you are already in a Medicare Advantage plan you can switch to a different one, or return to Original Medicare, once during this window. It is not available to people who are in Original Medicare on 1 January.
General Enrollment Period
1 January to 31 March
For people who did not sign up for Part B when first eligible and do not qualify for a Special Enrollment Period. A late enrollment penalty may apply.
Medigap Open Enrollment Period
6 months from Part B enrollment at 65
Begins the month you are both 65 or older and enrolled in Part B. During it you can buy any Medigap policy sold in your state regardless of your health. It does not repeat.
Special Enrollment Period
When your circumstances change
Certain life events, such as moving or losing other coverage, can open a window to make a change outside the usual periods. How long it lasts depends on the event.
Frequently asked questions
Other coverage options
Medicare Advantage
Medicare Advantage, sometimes called Part C, is offered by private insurance companies that contract with Medicare. These plans bundle your Part A and Part B coverage into a single plan, and most include prescription drug coverage as well.
D-SNPDual Eligible Special Needs Plans
A Dual Eligible Special Needs Plan, or D-SNP, is a type of Medicare Advantage plan for people who have both Medicare and Medicaid. It is designed to coordinate the two programs in a single plan.