Medicare Part D — Prescription Drug Coverage
Prescription Drug Coverage
Since 2006, Medicare has offered insurance coverage for prescription medications through Medicare Part D Prescription Drug Plans.
These plans are provided by private insurance companies that follow rules set by Medicare.
When enrolled in a Part D plan, you may need to pay a portion of your prescription drug costs before the plan starts covering expenses.
Typically, generic medications are more affordable than brand-name drugs.
Each plan has its own formulary — a list of all covered prescription medications.
Key Facts About Medicare Part D:
Available to anyone enrolled in Medicare Part A, Part B, or both.
Plans are offered through private insurance companies contracted with Medicare.
You can only be enrolled in one Prescription Drug Plan at a time.
You must live within the service area of the Part D plan you want to join.
If you don't enroll when you're first eligible, you'll pay a penalty — 1% of the national base premium for each month you delay enrollment.
Financial assistance is available:
You may qualify for "Extra Help," a Low-Income Subsidy (LIS) program that assists people with limited income and resources in paying for Medicare prescription drug costs.
Important Restrictions and Limitations for Medicare Part D Prescription Drug Plans
When you enroll in a Medicare Part D Prescription Drug plan, it’s important to understand certain rules and restrictions that may apply:
Prior Authorization:
Some medications may require prior authorization before the plan agrees to cover them.
Your healthcare provider may need to submit documentation to prove that the medication is medically necessary for your condition.
Each Medicare Part D plan maintains its own formulary — a list of covered prescription medications.
Plans can update this list each year, meaning medications may be added or removed from coverage.
Formulary (List of Covered Drugs):
Tier 1: Preferred generics (lowest cost)
Tier 2: Non-preferred generics
Tier 3: Preferred brand-name drugs
Tier 4: Non-preferred brand-name drugs
Tier 5: Specialty drugs (highest cost)
Quantity Limits:
Plans may limit the amount and frequency of a medication they will cover within a specific time period.
Quantity Limits:
Some plans use step therapy, requiring you to try a lower-cost medication proven effective for your condition before covering a more expensive option.
If previous medications have been ineffective, your prescriber can request an exception.
If approved, the plan will cover the higher-tier medication.
Safety Checks:
Before your prescriptions are filled, Part D plans work with pharmacies to perform safety checks such as:
Monitoring for unsafe quantities of certain medications (especially opioids and benzodiazepines)
Checking for incorrect dosages
Identifying potential drug interactions
Prescription Drug Management Programs:
Some Medicare Part D plans have programs to ensure the safe use of high-risk medications like opioids and benzodiazepines.
If you receive prescriptions for opioids from multiple doctors or pharmacies, your plan may contact your providers to confirm that the use is medically appropriate and coordinated.
Review the Formulary:
Make sure your current prescriptions are covered by the plan’s formulary (drug list).
Prepare a Medication List:
Include the name, dosage, and frequency of each medication (including creams, ointments, eye drops, and nasal sprays).
Understand Tiers and Costs:
Medications are categorized into tiers.
Example: Multiply the 30-day supply cost by 12 months to estimate your annual expense.
Verify Pharmacy Networks:
Confirm that your preferred pharmacy is in-network for lower costs.
Consider Switching to Generics:
Talk to your doctor about switching from name-brand medications to generics when available to save money.
Check Plan Requirements:
Many Medicare Advantage plans require you to join their integrated Part D drug plan. This does not apply to Medicare Supplement (Medigap) plans.
Use Medicare’s Plan Finder:
Visit ⦁ www.medicare.gov/drug-coverage-part-d/what-medicare-part-d-drug-plans-cover to compare plans based on your prescriptions.
Or contact the Medicare Insurance Helpline for personalized support: /speak-with-an-agent
How Medicare Part D Prescription Drug Coverage Works
The cost of your Medicare Part D Prescription Drug Plan can vary based on several factors:
Your prescriptions: Costs depend on whether your medications are included in your plan’s formulary (list of covered drugs) and the tier they fall into.
Your coverage phase: Costs change depending on where you are in the coverage process — for example, whether you've met your deductible or entered the catastrophic coverage phase.
The plan you select: Coverage and costs may vary between plans and can change each year.
The pharmacy you use: Network pharmacies often offer lower prices.
Financial assistance: If you qualify for Extra Help, it can significantly lower your Part D costs.
Comparing Medicare Part D Prescription Drug Plan Options
There are two primary ways to get Medicare Part D coverage:
Stand-Alone Medicare Part D Prescription Drug Plans (PDPs)
These plans add prescription drug coverage to Original Medicare, Medicare Supplement policies, some Medicare Cost plans, certain Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Account (MSA) plans.
You must have Medicare Part A and/or Part B to enroll in a stand-alone PDP.
Medicare Advantage Plans (MA-PDs) with Prescription Drug Coverage.
These plans bundle your Medicare Part A, Part B, and Part D coverage into one single plan.
Medicare Advantage plans with prescription drug coverage are often called MA-PDs (Medicare Advantage Prescription Drug plans).
To join, you must have both Medicare Part A and Part B.
Note: Not all Medicare Advantage plans include prescription drug coverage, so it’s important to review your plan options carefully.
Stand-Alone Medicare Part D Prescription Drug Plans (PDPs)
These plans add prescription drug coverage to Original Medicare, Medicare Supplement policies, some Medicare Cost plans, certain Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Account (MSA) plans.
You must have Medicare Part A and/or Part B to enroll in a stand-alone PDP.
Medicare Advantage Plans (MA-PDs) with Prescription Drug Coverage
These plans bundle your Medicare Part A, Part B, and Part D coverage into one single plan.
Medicare Advantage plans with prescription drug coverage are often called MA-PDs (Medicare Advantage Prescription Drug plans).
To join, you must have both Medicare Part A and Part B.
Note: Not all Medicare Advantage plans include prescription drug coverage, so it’s important to review your plan options carefully.
When Can You Join, Switch, or Drop a Medicare Part D Plan?
You have several opportunities to enroll in, switch, or drop a Medicare Part D Prescription Drug plan:
Initial Enrollment Period (IEP):
When you first become eligible for Medicare, you can join a Part D plan during your Initial Enrollment Period.
General Enrollment Period (GEP):
If you enroll in Medicare Part A and B for the first time during the General Enrollment Period (January 1–March 31), you can sign up for a Prescription Drug plan between April 1–June 30. Coverage will start July 1.
Annual Enrollment Period (AEP):
Each year from October 15–December 7, you can join, switch, or drop a Part D plan. Changes take effect on January 1 of the following year, as long as your request is received by December 7.
Medicare Advantage Open Enrollment Period:
If you are enrolled in a Medicare Advantage plan, you can make changes from January 1–March 31.
Special Enrollment Period (SEP):
Certain life events (such as moving, losing other coverage, or qualifying for Medicaid) may grant you a Special Enrollment Period to join, switch, or drop coverage mid-year.
Need help? Call the Medicare Comparison Helpline at to speak with a licensed insurance agent, or request assistance online: /speak-with-an-agent
Tips for Comparing Medicare Part D Plans
Review the Formulary:
Make sure your current prescriptions are covered by the plan’s formulary (drug list).
Prepare a Medication List:
Include the name, dosage, and frequency of each medication (including creams, ointments, eye drops, and nasal sprays).
Understand Tiers and Costs:
Medications are categorized into tiers.
Example: Multiply the 30-day supply cost by 12 months to estimate your annual expense.
Verify Pharmacy Networks:
Confirm that your preferred pharmacy is in-network for lower costs.
Consider Switching to Generics:
Talk to your doctor about switching from name-brand medications to generics when available to save money.
Check Plan Requirements:
Many Medicare Advantage plans require you to join their integrated Part D drug plan. This does not apply to Medicare Supplement (Medigap) plans.
Use Medicare’s Plan Finder:
Visit www.medicare.gov/drug-coverage-part-d/what-medicare-part-d-drug-plans-cover to compare plans based on your prescriptions.
Or contact the Medicare Insurance Helpline for personalized support: /speak-with-an-agent
What Is the Medicare Part D Late Enrollment Penalty?
If you go 63 days or more without prescription drug coverage after your Initial Enrollment Period, you may have to pay a permanent penalty added to your monthly premium.
Ways to Avoid the Penalty:
⦁ Enroll in a Prescription Drug Plan when you’re first eligible, even if you don’t currently take medications.
⦁ Sign up promptly if you lose other creditable drug coverage (such as employer, VA, or TRICARE coverage).
⦁ Keep records showing when you had creditable coverage and share them with your plan if requested.
Important: If you receive Extra Help, you will not be charged a late enrollment penalty.How Much Is the Late Enrollment Penalty?
The penalty is calculated as follows:
⦁ Multiply 1% of the national base beneficiary premium ($36.78 in 2025) by the number of full, uncovered months you went without coverage.
⦁ Round the result to the nearest $0.10.⦁ This amount is added to your monthly premium permanently (and may increase yearly as the national base premium changes).
Example:
If you went 29 months without creditable coverage:
⦁ 29% of $36.78 = $10.67
⦁ Rounded to $10.70
You would pay an additional $10.70 per month along with your plan’s premium in 2025 — and continue paying it as long as you have Medicare Part D coverage.
Learn more here: www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty
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