Prescription Drug Coverage (Part D)

Medicare Part D is an optional prescription drug insurance program available to everyone who has Medicare, regardless of income or health status. Private companies provide the insurance coverage, you choose the drug plan and pay a monthly premium. 

To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage (this includes Medicare drug plans and Medicare Advantage Plans with drug coverage).

Plans must cover common drugs

All plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain protected classes,” like drugs to treat cancer or HIV/AIDS. 

A plan’s list of covered drugs is called a “formulary,” and each plan has its own formulary. Many plans place drugs into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost. For example, a drug in a lower tier will generally cost you less than a drug in a higher tier.

Costs vary

Each plan can vary in cost and specific drugs covered, but must give at least a standard level of coverage set by Medicare. Medicare drug coverage includes generic and brand-name drugs. 

Plans have different monthly premiums. You’ll also have other costs throughout the year in a Medicare drug plan. How much you pay for each drug depends on which plan you choose.

There are penalties if you don’t enroll in a Part D plan

If you do not enroll in a plan and do not have creditable coverage for your drugs, you will incur a penalty of 1% of the average national premium for every month you were eligible and did not enroll. This amount is added on to your drug plan premium.