Medicare Part D plans cover prescription drugs. Use this guide to learn what you should know about Medicare prescription drug benefits and find plans that may cover your drugs and may be accepted at your preferred pharmacy.
Medicare Part D (Medicare prescription drug coverage) helps cover some of the costs of prescription drugs for Medicare beneficiaries.
Medicare Part D plans are sometimes called Prescription Drug Plans (PDP). Part D plans are optional, and they are sold by private insurance companies. It's important not to confuse Medicare Part D with Plan D Medicare Supplement Insurance.
Learn more about your options for getting Medicare prescription drug coverage in 2024, including Part D plans and Medicare Advantage plans (Part C) or other Medicare health plans that include prescription drug coverage.
Are you ready to enroll in a Part D prescription drug plan? You can visit MyRxPlans.com to enroll in a plan in as little as 10 minutes.1
Medicare beneficiaries have two primary options for obtaining coverage for prescription drugs:
Enrolling in a standalone Medicare Part D plan
Enrolling a Medicare Advantage plan that includes prescription drug coverage
Medicare Part D Prescription Drug plans provide coverage exclusively for certain prescription drugs. They can be used alongside Medicare Part A and Part B (with or without a Medicare Supplement Insurance plan), or a Medicare Advantage plan that doesn't include prescription drug coverage.
Medicare Advantage plans are an alternative to Original Medicare (Part A and Part B).
Medicare Advantage plans provide the same coverage as Part A and Part B. Many Medicare Advantage plans also offer additional benefits that Original Medicare doesn't cover, such as prescription drugs.
A Medicare Advantage plan that includes prescription drug coverage is often called a Medicare Advantage Prescription Drug Plan (MAPD).
Medicare Part D plans provide coverage for both generic and brand name drugs.
Each Part D plan comes with a “formulary,” or a list of drugs covered by the plan. The range of drugs covered will vary from one Part D plan to another.
On the plan formulary, drugs are typically separated by tiers. Certain tiers include only generic drugs, and other tiers include brand name medications.
For example, a tier 1 drug might consist of low-cost, generic drugs and require only a small copayment in order to fill a prescription. A tier 4 drug, however, might be a more expensive name brand drug that requires a higher copayment.
The number of drug tiers and the cost breakdown will vary according to each plan.
Medicare Part D Prescription Drug Plans only provide coverage for prescription medications. These plans do not typically offer any additional benefits.
Part D plans are optional for anyone with Original Medicare.
If you are treated for an injury or illness, your medical care will be covered by Medicare Part A or Part B (depending on the services you receive and the type of facility where you receive them).
If you have Part D coverage and your doctor prescribes medication for your injury or illness, your prescription will typically be covered by your Part D coverage.
Medicare Part D plans can come with several different types of out-of-pocket costs, such as:
Premiums
Deductibles
Copayments
The premium is the amount of money you will pay each month to belong to the plan.
The deductible is the amount you will have to pay out of your own pocket before your plan coverage kicks in.
For example, if you have a $200 deductible, you will have to pay at least $200 for covered prescriptions during a plan year before your plan will also help pay for costs. Once you have met your deductible, the plan will help cover your drug costs according to the plan terms.
In 2024, Medicare Part D plan deductibles cannot be higher than $545. Some 2024 Part D plans may have $0 deductibles.
Copayments are the amount of money you pay for each prescription after you meet your deductible.
For example, if your plan features a $5 copayment for certain drugs, you will have to pay $5 each time you fill a prescription for that type of drug (after you meet your deductible).
Cost sharing may also be reflected as a percentage, in which case they are typically called “coinsurance.”
Copayments and coinsurance are typically decided by the tier on which a drug is classified in your plan formulary. Some Part D plans may feature preferred pharmacies that offer discounts to plan members for certain prescription drugs.
In 2024, the average premium for a Medicare Part D plan is $59 per month.2
Part D premiums can vary based on a number of factors, such as:
Formulary
Generally speaking, plans with a wider range of coverage may tend to carry higher premiums than plans with more limited coverage.
Carrier
Part D plans are sold by private insurance companies, and plan premiums can vary.
IRMAA (Income-Related Monthly Adjusted Amount)
Part D beneficiaries who have higher incomes may be required to pay more expensive monthly premiums. This increased premium amount is known as the income-related monthly adjustment amount, or IRMAA.
The chart below illustrates IRMAA adjustments for Part D plans in 2024 (based on 2022 tax returns).
| 2022 Individual tax return | 2022 Joint tax return | 2022 Married and separate tax return | 2024 Part D premium |
|---|---|---|---|
| $103,000 or less | $206,000 or less | $103,000 or less | Your plan premium |
| More than $103,000 and up to $129,000 | More than $206,000 and up to $258,000 | N/A | Your plan premium $12.90 |
| More than $129,000 up to $161,000 | More than $258,000 up to $322,000 | N/A | Your plan premium $33.30 |
| More than $161,000 up to $193,000 | More than $322,000 up to $386,000 | N/A | Your plan premium $53.80 |
| More than $193,000 up to $500,000 | More than $386,000 up to $750,000 | More than $103,000 up to $403,000 | Your plan premium $74.20 |
| More than $500,000 | More than $750,000 | More than $397,000 | Your plan premium $81.00 |
To be eligible for Medicare Part D, you must already be enrolled in Medicare Part A.
In order to be eligible for Medicare Part A, you must be:
Eligible for Social Security benefits (or Railroad Retirement Board benefits)
A U.S. citizen or permanent legal resident who has lived in the U.S. for at least five years
You may also be eligible for Medicare Part A if you are under 65 and have a qualifying disability.
If you are eligible for and enrolled in Medicare Part A, you can enroll in Medicare Part B.
There are three Medicare enrollment periods during which you can sign up for Medicare Part D.
When you first become eligible for Medicare, you'll be given a seven-month enrollment period.
Your Medicare Initial Enrollment Period (IEP) begins three months before you turn 65, includes the month of your birthday and continues for three more months.
During your IEP, you may enroll in any part of Medicare, including a Part D plan.
The Medicare Annual Enrollment Period (also called the Annual Election Period, or AEP) runs from October 15 to December 7 every year.
During AEP, you may make a number of changes to your Medicare coverage, including joining, dropping or switching Part D plans.
Medicare AEP is also sometimes called the Medicare Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage.
A Special Enrollment Period may be granted at any time of the year to beneficiaries under certain circumstances.
Some situations that could qualify you for a Medicare SEP could include losing creditable drug coverage or moving to a new residence outside of your current plan's service area.
If you experience a period of 63 consecutive days after your Medicare Initial Enrollment Period during which you don't have creditable drug coverage and decide later to sign up for a Prescription Drug Plan, you may be required to pay a Part D late enrollment penalty.
How much you are required to pay for the Part D late enrollment penalty will depend on how long you went without Part D or creditable drug coverage.
Creditable drug coverage includes:
A Medicare Part D plan
A Medicare Advantage Prescription Drug Plan (MAPD)
Another Medicare health plan that includes prescription drug coverage
Employer- or union-sponsored drug coverage that pays, on average, at least as much as Medicare's standard prescription drug coverage
Medicare Part D plans have a coverage gap, or “donut hole,” which is a temporary limit on what your Part D plan will pay for prescription drugs.
In 2024, the Part D coverage gap begins once you and your plan have combined to spend $5,030 on covered drugs.
Once you're in the coverage gap, you pay no more than 25 percent of your costs for brand-name drugs and generic drugs until you reach $8,000 in out-of-pocket spending in 2024.
Once you reach $8,000 in out-of-pocket spending, you reach the level of Part D catastrophic coverage. You won't pay any coinsurance or copayment charge for covered drugs once you reach catastrophic coverage.
You can see a Medicare donut hole 2024 chart here.
Extra Help is a federal assistance program that helps pay for some of the out-of-pocket costs associated with Part D plans.
You may automatically qualify for Extra Help if you have Original Medicare and meet any of the following conditions:
You have full Medicaid benefits coverage
Your state Medicaid program helps pay for your Part B premiums
You receive Supplemental Security Income (SSI)
Medicare Extra Help can pay for your premiums, lower the cost of your drugs and offer you a Special Enrollment Period.
You can be enrolled in Medicare Supplement Insurance (Medigap) and also enrolled in a Part D plan at the same time.
If you have a Medigap plan and a Medicare Part D plan, your Medigap plan will help pay for certain out-of-pocket Medicare costs, while your Part D plan will help pay for covered prescriptions.
A licensed insurance agent can help you learn more about Medicare Part D plan options where you live.
Or call 1-800-995-4219 to speak with a licensed insurance agent.
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