Medicare covers some prescription medications through Part D, but not all drugs, and coverage rules vary by plan and pharmacy
Medicare has a prescription drug benefit called Part D, which helps pay for medications you take at home. Part D is optional — you choose a plan and pay a monthly premium — but it covers thousands of drugs. However, every Part D plan has a different list of covered medications, called a formulary, so the same drug may be covered under one plan and not another. Medicare also sets rules about how much you pay at different stages of the year, and some medications require your doctor to get permission from your insurance company before the pharmacy can fill them.
The key point: you cannot assume a medication is covered just because it is a prescription drug. You have to check your specific plan's formulary, and you may have options if your drug is not covered or costs too much.
Key Takeaways
- Part D covers most common medications, but each plan's formulary is different, so you need to check your specific plan to know whether your drugs are covered.
- You pay different amounts depending on the time of year: a copay or coinsurance early in the year, then higher costs once you reach the deductible and coverage gap, then lower costs after you hit the out-of-pocket limit.
- Some medications need prior authorization, meaning your doctor must request permission from your insurance company before the pharmacy can fill the prescription.
- If your medication is not covered or costs too much, you can ask your doctor about alternatives, request an exception from your plan, or switch to a different Part D plan during open enrollment.
How Part D Coverage Works Throughout the Year
Part D has four cost stages, and your out-of-pocket costs change at each one. The stages are: initial coverage, the coverage gap (sometimes called the "donut hole"), catastrophic coverage, and the out-of-pocket limit.
In the initial coverage stage, you pay a copay or coinsurance for each prescription — typically $5 to $50 per drug, depending on the medication and your plan. This stage continues until your total drug costs (what you and your plan pay together) reach a certain amount, which varies by year.
Once your total costs hit that threshold, you enter the coverage gap. In this stage, you pay a higher percentage of the drug cost — currently 25 percent of the price — while Medicare pays another 5 percent. This gap continues until your out-of-pocket spending (what comes directly out of your pocket) reaches a second limit, which also varies by year.
After you spend enough out of pocket to reach the out-of-pocket limit, you move into catastrophic coverage. At this point, Medicare pays most of the cost, and you pay only a small copay or coinsurance for the rest of the year. Understanding these stages helps you budget for medications and know when your costs will drop.
Finding Out Whether Your Medications Are Covered
The only way to know if your specific drugs are covered is to check the formulary for the plan you are considering. You can search the Medicare Plan Finder tool on Medicare.gov, which lets you enter your medications and see which plans cover them and at what cost.
If you already have a Part D plan, you can call the plan's customer service number (on your insurance card) and ask whether a specific drug is covered. You can also ask the pharmacy when you try to fill a prescription — they will tell you when ready whether the drug is in the plan's formulary and what you will pay.
Keep in mind that formularies change every year, so a drug that was covered last year may not be covered this year, and vice versa. This is one reason to review your plan during the annual open enrollment period (October 15 to December 7) and switch plans if your medications are no longer covered or if a new plan offers better coverage for your drugs.
Prior Authorization and Step Therapy Requirements
Some medications require prior authorization, which means your doctor must contact your insurance company and get permission before the pharmacy can fill the prescription. This is common for expensive drugs, newer medications, or drugs that have cheaper alternatives available. Your doctor's office usually handles the prior authorization request, but the process can take a few days.
If you need the medication urgently, tell your doctor's office and the insurance company — many plans can approve urgent requests faster. In the meantime, ask your pharmacy if they can fill a small supply (a few days' worth) while you wait for approval.
Some plans also use step therapy, which means you may have to try a cheaper or older medication first, and only if that does not work can you move to the drug your doctor originally prescribed. Your doctor can request an exception if they believe step therapy is not appropriate for you, and plans often approve these requests when the doctor explains the medical reason.
What Happens If Your Medication Is Not Covered
If your Part D plan does not cover a medication you need, you have several options. First, ask your doctor whether there is a similar drug on your plan's formulary that might work just as well. Many drug classes have multiple options, and your doctor may be able to switch you to a covered alternative without any loss of effectiveness.
Second, you can request a formulary exception from your insurance plan. This is a formal request asking the plan to cover a drug that is not normally on the formulary. Your doctor must submit the request and explain why this specific medication is medically necessary for you. Plans approve many exceptions, especially if you have already tried the covered alternatives and they did not work.
Third, you can pay out of pocket for the uncovered medication while keeping your Part D plan for other drugs. Some people do this for one or two medications while using Part D for everything else. Fourth, you can switch to a different Part D plan during open enrollment (October 15 to December 7 each year) that does cover your medication. You can also switch plans if you have a may have access to life event, such as moving to a new state or losing other health coverage.
Medications Medicare Part D Does Not Cover
Part D does not cover certain categories of drugs, even if they are prescription medications. These exclusions include over-the-counter drugs (unless prescribed as part of a specific program), vitamins and minerals, drugs used for weight loss, erectile dysfunction medications, and cosmetic drugs. Part D also does not cover medications used to treat infertility or drugs that are not FDA-approved.
If you take a medication in one of these categories, you will pay the full cost out of pocket. Some people use a separate discount program or pharmacy coupon to lower the price, or they ask their doctor about covered alternatives that might work for their condition. Knowing these exclusions in advance helps you plan your medication budget and explore other payment options.
Choosing and Changing Your Part D Plan
You choose a Part D plan when you first become may be able to access for Medicare, and you can change plans once a year during open enrollment. When comparing plans, look at three things: the monthly premium, the formulary (whether your drugs are covered), and the total estimated cost for your medications throughout the year.
The plan with the lowest premium is not always the cheapest overall. A plan with a higher premium might have lower copays for your specific drugs, which could save you money in the long run. The Medicare Plan Finder tool shows you the estimated annual cost for your medications under each plan, so you can compare the total cost, not just the premium.
If you miss the initial enrollment period when you first become may be able to access for Medicare, you may have to pay a late enrollment penalty if you sign up for Part D later. The penalty is small (about 1 percent of the national average Part D premium per month of delay), but it adds up over time. However, you can still enroll in Part D during open enrollment or if you have a may have access to life event.
Getting Help Paying for Medications
If you have limited income, you may be able to get help paying for Part D premiums and out-of-pocket costs through the Low-Income Subsidy (LIS) program, also called "Extra Help." This program is run by Social Security and can cover most or all of your Part D costs if you meet the income and resource limits. You can learn more through Social Security's website or by calling 1-800-772-1213.
Some drug manufacturers also offer patient information programs that provide free or reduced-cost medications to people who cannot afford them. You can ask your doctor or pharmacist whether your medication has a manufacturer program, or you can search for programs on the NeedyMeds website. These programs have different rules and income limits, so it is worth checking even if you think you might not may have access to.
Frequently Asked Questions
Can I use my Part D plan at any pharmacy?
Most Part D plans have a network of pharmacies where you pay the lowest copay. If you use an out-of-network pharmacy, you may pay more. Some plans cover out-of-network pharmacies at a higher cost, while others do not cover them at all. Check your plan documents or call customer service to find pharmacies near you.
What if I cannot afford my copays?
If you have limited income, the Low-Income Subsidy program may cover your copays. If you do not may have access to for that program, ask your pharmacy about generic alternatives or manufacturer coupons. You can also ask your doctor about less expensive medications that might work for you.
Do I have to take Part D when I turn 65?
Part D is optional, but if you delay signing up and do not have other creditable prescription drug coverage, you will pay a late enrollment penalty when you do enroll. If you have coverage through a current employer or union, you may be able to delay Part D without penalty.
Can I switch Part D plans if my medication costs too much?
Yes, you can switch plans during open enrollment (October 15 to December 7) each year. You can also switch if you have a may have access to life event, such as moving or losing other coverage. If your medication is not covered, you can also request a formulary exception from your current plan before switching.
What is the difference between a generic and a brand-name drug?
A generic drug has the same active ingredient as a brand-name drug and works the same way, but it costs less. Most Part D plans charge lower copays for generics to encourage you to use them. If your doctor prescribes a brand-name drug, ask whether a generic version is available and whether it would work for you.