Medicare prescription drug coverage works through a separate plan you choose, not through Original Medicare itself

Original Medicare — the hospital and doctor coverage most people turn 65 — does not cover prescription drugs. To get drug coverage, you must join a Medicare Part D plan, which is run by private insurance companies approved by Medicare. Part D is optional, but if you wait to sign up after you first become may be able to access, you may pay a penalty for as long as you have Medicare.

Part D plans vary widely in which drugs they cover, how much you pay, and which pharmacies you can use. The drugs a plan covers are called its formulary, and you can look up any specific medication before you join. Most plans cover common drugs for chronic conditions like diabetes, heart disease, and high blood pressure, but coverage for newer or brand-name drugs differs from plan to plan.

If you have limited income, you may may have access to for Extra Help, a federal program that pays most or all of your Part D costs. You can check whether you may have access to by contacting Social Security at 1-800-772-1213 or visiting your local Social Security office.

Key Takeaways

  • Original Medicare does not cover prescription drugs; you must choose a separate Part D plan run by a private insurance company.
  • Each Part D plan has its own list of covered drugs (formulary), and you should check whether your current medications are on it before you join.
  • If you do not join a Part D plan when you first become may be able to access, you will pay a higher premium for as long as you have Medicare.
  • Extra Help is a federal program that can pay most or all of your Part D costs if your income is low enough.
  • You can change Part D plans once a year during the Annual Enrollment Period, which runs from October 15 to December 7.

How to find out what a Part D plan covers

Before you join any Part D plan, use the Medicare Plan Finder tool at Medicare.gov to search for your specific medications. Type in each drug name, strength, and quantity, and the tool will show you which plans cover it and what you will pay at the pharmacy.

The Plan Finder also shows you which pharmacies are in each plan's network. If you have a pharmacy you prefer — perhaps because it is close to home or because your pharmacist knows your medical history — check that it is listed before you sign up. Some plans cover mail-order pharmacies, which can be cheaper for drugs you take every month.

If a drug you need is not on a plan's formulary, you can ask your doctor to request a formulary exception. The plan must review the request and can approve it if your doctor explains why that specific drug is medically necessary. This process usually takes a few business days.

What you pay for drugs under Part D

Part D plans have a yearly deductible, usually between $0 and $545, depending on which plan you choose. After you meet the deductible, you pay a copay or coinsurance for each prescription — typically $5 to $50 for generic drugs and $15 to $100 or more for brand-name drugs.

Once your total drug costs reach $5,850 in a calendar year, you enter the coverage gap, sometimes called the "donut hole." In the gap, you pay 25 percent of the cost of brand-name drugs and 25 percent of generic drugs until your out-of-pocket spending reaches $7,050. After that, catastrophic coverage kicks in and you pay only a small copay for the rest of the year.

The exact amounts change each year. You can see the current year's costs and thresholds on Medicare.gov or by calling 1-800-MEDICARE.

When to sign up for Part D and what happens if you miss the important date

You should join a Part D plan during your Initial Enrollment Period, which begins three months before the month you turn 65 and ends three months after. If you miss this window, you can still join during the Annual Enrollment Period from October 15 to December 7 each year, with coverage starting January 1.

If you do not join Part D when you first become may be able to access and you do not have other creditable drug coverage (such as coverage through a current or former employer), Medicare charges you a late enrollment penalty. This penalty is added to your Part D premium every month for as long as you have Medicare. The penalty is roughly 1 percent of the national average Part D premium for each month you were without coverage.

If you have drug coverage through an employer or union, check whether it is considered creditable coverage. If it is, you can delay joining Part D without penalty. Your employer or union should send you a notice each year stating whether your coverage is creditable.

Part D plans for people with low income

If your income is at or below 150 percent of the federal poverty level, you may may have access to for Extra Help, which covers most or all of your Part D costs. For 2024, this means a monthly income of roughly $1,550 or less for a single person, though the exact amount varies by state and changes yearly.

To explore for Extra Help, contact Social Security at 1-800-772-1213, visit your local Social Security office, or go online to ssa.gov/benefits/retirement/extra-help.html. You will need to provide proof of income, such as recent tax returns or pay stubs. Social Security will tell you whether you may have access to and, if you do, will help you choose a plan.

If you receive Medicaid, you are automatically enrolled in a Part D plan chosen by your state. You can switch to a different plan during the Annual Enrollment Period if you want.

What to do if your drug costs are too high

If you cannot afford your prescriptions, talk to your doctor before you skip doses or stop taking a medication. Your doctor may be able to prescribe a generic drug or a different drug that your plan covers at a lower cost. Some drug manufacturers also offer patient information programs that provide free or reduced-cost medications to people who meet income requirements.

You can also ask your pharmacist whether a generic version of your drug is available. Generics work the same way as brand-name drugs but usually cost much less. If your plan charges more for a brand-name drug than a generic, switching can save you hundreds of dollars a year.

If you are in the coverage gap and your out-of-pocket costs are climbing, contact your Part D plan to ask about programs that might help. Some plans offer gap coverage or other information programs for members in financial hardship.

Changing your Part D plan

You can change Part D plans once a year during the Annual Enrollment Period, October 15 to December 7. Your new coverage will start January 1. You do not need a reason to switch — you can change plans straightforward because you want different coverage or a lower premium.

Use the Medicare Plan Finder to compare plans side by side. Look at the total cost for all your medications, not just the premium. A plan with a higher monthly premium might cost less overall if it covers your drugs at lower copays.

If you have a life-changing event — such as moving to a new state, losing employer coverage, or becoming may be able to access for Extra Help — you may be able to change plans outside the Annual Enrollment Period. Contact your Part D plan or call 1-800-MEDICARE to ask whether you may have access to for a Special Enrollment Period.

Frequently Asked Questions

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

Part D is optional, but if you do not join when you first become may be able to access and you do not have other drug coverage, you will pay a late enrollment penalty every month for as long as you have Medicare. The penalty is roughly 1 percent of the national average Part D premium for each month you were without coverage.

What if my medication is not on my plan's formulary?

You can ask your doctor to request a formulary exception. Your plan must review the request and can approve it if your doctor explains why that specific drug is medically necessary. This usually takes a few business days. If the exception is denied, you can appeal the decision.

Can I use any pharmacy with Part D?

No. Each Part D plan has a network of pharmacies where you pay the plan's copay. If you use an out-of-network pharmacy, you will pay more or the plan may not cover the drug at all. You can check which pharmacies are in your plan's network on Medicare.gov before you join.

What happens if I move to a different state?

Your Part D plan may not be available in your new state. If it is not, you can change plans outside the Annual Enrollment Period without penalty. Contact your current plan or call 1-800-MEDICARE to find out what plans are available where you are moving.

How do I know if my employer coverage counts as creditable drug coverage?

Your employer or union should send you a notice each year stating whether your coverage is creditable. If you are not sure, ask your benefits administrator or call 1-800-MEDICARE. If your coverage is creditable, you can delay joining Part D without paying a late enrollment penalty.