Medicare Part D is the prescription drug coverage you choose separately

Medicare Part D is the plan that helps pay for prescription medications. It is not automatic — you have to pick a Part D plan during your enrollment period, or you may pay a penalty later. Part D is offered by private insurance companies approved by Medicare, not by Medicare itself.

You can get Part D coverage in two ways. If you have Original Medicare (Part A and Part B), you buy a standalone Part D plan. If you choose a Medicare Advantage plan (Part C), most of those plans include drug coverage built in, though you still choose which Advantage plan to join.

Part D covers thousands of medications on a list called a formulary. Each insurance company's formulary is different — the drugs covered, the price you pay, and which pharmacy you use all depend on which Part D plan you pick.

Key Takeaways

  • Part D is a separate choice you make during enrollment; it does not come with Original Medicare automatically.
  • Different Part D plans cover different drugs at different costs, so comparing plans before you enroll matters.
  • You pay a monthly premium for Part D, plus copays or coinsurance when you fill prescriptions.
  • If you miss your enrollment window, you may owe a penalty for each month you were without coverage.
  • Medicare Advantage plans usually include drug coverage, so you do not buy Part D separately if you choose Advantage.

How Part D costs work

Part D has four cost stages. First, you pay a monthly premium — the base price of the plan itself. This varies by plan and by region.

Once you start filling prescriptions, you pay an annual deductible (usually $505 in 2024, though this amount changes yearly). After you meet the deductible, you move into the coverage phase, where you pay a copay or coinsurance for each prescription — typically $5 to $50 depending on the drug and the plan.

If your drug costs reach a certain threshold (called the initial coverage limit, usually around $5,850 in 2024), you enter the "donut hole" — a gap where you pay a higher percentage of the drug cost. Once your out-of-pocket spending hits a yearly maximum (around $8,550 in 2024), catastrophic coverage kicks in and Medicare pays most of the cost for the rest of the year.

These dollar amounts change every January. Your plan's summary will show you exactly what you pay at each stage for your specific medications.

Comparing Part D plans before you enroll

Because each plan covers different drugs at different prices, comparing plans is the only way to find the one that costs least for your medications. Medicare provides a tool called the Medicare Plan Finder on Medicare.gov. You enter your medications, and the tool shows you which plans cover them and what you would pay out of pocket at each plan.

You can also call 1-800-MEDICARE to speak with someone who can walk you through the comparison. Many local Area Agencies on Aging offer free counseling on Medicare plans as well — search "State Health Insurance information Program" (SHIP) plus your state name to find the office near you.

When you compare, look at the total yearly cost, not just the monthly premium. A plan with a low premium might have high copays for your drugs, making it more expensive overall. The Plan Finder shows you the estimated total cost for each plan.

When you can enroll in Part D

Your main chance to pick or change a Part D plan is during Annual Enrollment Period (AEP), which runs October 15 through December 7 each year. Coverage starts January 1 of the following year.

If you are turning 65 and enrolling in Medicare for the first time, you have a seven-month window centered on your birthday month — three months before, the month you turn 65, and three months after. This is called your Initial Enrollment Period (IEP).

If you miss these windows and do not have other creditable drug coverage (like coverage from a current or former employer), you will owe a late enrollment penalty. This penalty is added to your Part D premium for as long as you have Medicare. The penalty is roughly 1% of the national average Part D premium for each month you went without coverage.

What happens if your drug is not on the formulary

If a medication you take is not covered by your Part D plan, you have options. You can ask your doctor whether a different drug on the formulary would work for you. Many conditions have multiple medications that work similarly.

You can also request an exception from the insurance company. Your doctor submits a form explaining why you need that specific drug. The company has 72 hours to decide. If they deny the exception, you can appeal.

Some people find that switching to a different Part D plan during the next enrollment period covers the drug they need. This is one reason to review your plan every year, even if you have been happy with it — your medications or their costs may change.

Part D and Medicare Advantage plans

If you choose a Medicare Advantage plan (Part C), drug coverage is usually included. You do not buy a separate Part D plan. The Advantage plan's formulary and costs may be different from standalone Part D plans, so compare the drug coverage when you are deciding between Advantage and Original Medicare.

Some Advantage plans have $0 premiums, which can make them attractive. However, they often have higher copays, smaller networks of doctors and pharmacies, and stricter rules about which specialists you can see without a referral. Compare the total cost for your medications and doctors, not just the premium.

If you have an Advantage plan and want to switch to Original Medicare and a standalone Part D plan, you can do so during AEP or during the Medicare Advantage Open Enrollment Period (January 1 through March 31). Your new Part D coverage would start the first of the following month.

Frequently Asked Questions

Do I have to take Part D when I turn 65?

No, but if you do not have other drug coverage and you do not enroll during your Initial Enrollment Period, you will owe a late penalty later. The penalty stays on your premium for life. If you have coverage through a current employer or union, you may be able to delay Part D without penalty — ask your benefits office whether your coverage is "creditable."

Can I change my Part D plan if my medication costs too much?

Yes, during Annual Enrollment Period (October 15 to December 7). You can also switch plans if you have a may have access to life event, such as losing other drug coverage or moving to a new state. Call 1-800-MEDICARE to ask whether your situation qualifies for a special enrollment period.

What if I cannot afford my Part D copays?

Medicare has a program called the Extra Help program (also called Low-Income Subsidy) that pays Part D premiums and reduces copays for people with limited income and resources. You can learn about it on Medicare.gov or by calling 1-800-MEDICARE. Your state Medicaid office may also help with drug costs.

Do all pharmacies accept all Part D plans?

Each Part D plan has a network of pharmacies where your copay applies. If you use an out-of-network pharmacy, you pay more or the plan may not cover the drug at all. Check your plan's pharmacy list before you enroll, especially if you have a pharmacy you prefer or if you use mail order.

What should I do if my doctor prescribes a drug that Part D does not cover?

Talk to your doctor first — they may know of a similar drug on your plan's formulary. If you need that specific drug, ask your doctor to submit an exception request to the insurance company. You can also contact the plan directly to ask about the appeal process if the exception is denied.