Medicare covers prescription drugs, but not all of them, and the amount you pay depends on which Medicare plan you have and which drug you need.

If you have Original Medicare (Part A and Part B), you do not automatically get drug coverage — you must sign up for Part D, which is prescription drug insurance run by private companies approved by Medicare. If you have a Medicare Advantage plan (Part C), that plan usually includes drug coverage built in, though you may still pay out-of-pocket costs.

Medicare does not cover every medication. Each Part D plan maintains a list called a formulary that shows which drugs are covered and at what cost tier. Your doctor's medication might not be on your plan's formulary, or it might be on a higher cost tier than you expected. If that happens, you can ask your doctor to prescribe a different drug that is covered, or you can request an exception from your insurance company.

Key Takeaways

  • Original Medicare requires you to enroll in Part D drug coverage separately; Medicare Advantage plans typically include drug coverage but you should verify the specific drugs you take are covered.
  • Each Part D plan has a formulary listing which drugs are covered and at what cost level, and formularies change every year.
  • You pay different amounts depending on which tier your drug is on: generic drugs usually cost less than brand-name drugs on the same plan.
  • If your medication is not covered or costs too much, you can ask your doctor about alternatives or request an exception from your insurance company.
  • You can change your Part D plan or Medicare Advantage plan during the annual enrollment period (October 15 to December 7) if your current coverage no longer meets your needs.

How Part D drug coverage works

Part D is sold by insurance companies, not by Medicare directly. You choose a plan during your initial enrollment period when you first become may be able to access for Medicare, or during the annual enrollment period each fall. Each plan has its own formulary, monthly premium, and cost-sharing structure.

When you fill a prescription at a pharmacy, you pay a copay or coinsurance amount that depends on which tier your drug is on. Tier 1 drugs (usually generics) cost the least. Tier 2 drugs (brand-name with generic alternatives) cost more. Tier 3 and Tier 4 drugs (brand-name without generics, or specialty drugs) cost the most. Some plans also have a separate tier for insulin with a $35 monthly copay cap.

Your out-of-pocket costs count toward your annual deductible. Once you meet your deductible, your plan begins to pay its share. The exact amounts vary by plan and change each year.

The coverage gap and catastrophic coverage

Part D has a coverage gap, sometimes called the "donut hole." Once you and your plan have spent a combined total of about $5,380 on covered drugs in 2024 (this amount changes yearly), you enter the gap. In the gap, you pay a higher percentage of the drug cost — typically 25 percent for most drugs — until your total out-of-pocket spending reaches about $7,050.

Once you reach that $7,050 threshold, you enter catastrophic coverage. At that point, you pay only a small copay (usually $3.95 for generic or $9.85 for brand-name in 2024) for the rest of the year, and your plan pays the rest.

If you take expensive medications or have chronic conditions requiring multiple drugs, you may hit the coverage gap. Ask your pharmacist or doctor whether generic alternatives exist, or contact your Part D plan to see if you may have access to for a manufacturer discount program or other cost-reduction options.

Medicare Advantage drug coverage

If you have a Medicare Advantage plan, prescription drug coverage is usually included. However, the drugs covered and the costs you pay are determined by your specific plan, not by Medicare. Some Medicare Advantage plans have lower premiums but higher drug copays; others have higher premiums but better drug coverage.

Medicare Advantage formularies can be different from Part D formularies. A drug covered under one plan might not be covered under another, even if both are Medicare Advantage plans in the same area. Before you enroll in a Medicare Advantage plan, check whether the medications you currently take are on that plan's formulary and at what cost tier.

If you switch from Original Medicare with Part D to a Medicare Advantage plan, or vice versa, your drug coverage changes. Make sure you understand what happens to your current prescriptions before you make the switch.

What to do if your drug is not covered

If your medication is not on your plan's formulary, you have several options. First, ask your doctor whether a generic version or a different drug in the same class is available and covered by your plan. Many conditions can be treated with multiple medications, and your doctor may be willing to switch you to a covered alternative.

Second, you can request a formulary exception from your insurance company. You or your doctor can submit a written request explaining why you need that specific drug instead of the covered alternatives. Your plan must respond within 72 hours for urgent requests or 24 hours for expedited requests. If your plan denies the exception, you can appeal.

Third, you can check whether the drug manufacturer offers a patient information program or discount card. Many pharmaceutical companies provide free or reduced-cost medications to people who meet income requirements. Your doctor's office or the manufacturer's website can tell you how the process works.

Changing your plan if coverage no longer works

Your health needs and medication costs change over time. If your current Part D plan or Medicare Advantage plan no longer covers your drugs at an affordable cost, you can switch plans during the annual enrollment period from October 15 to December 7 each year. The change takes effect January 1.

Before you switch, use the Medicare Plan Finder tool on Medicare.gov to compare plans side by side. Enter the medications you take, and the tool will show you which plans cover them and what your costs would be. You can also call 1-800-MEDICARE to speak with someone who can help you compare plans.

If you have a life-changing event — such as a move to a new state, loss of other insurance, or a significant change in your income — you may be able to change plans outside the annual enrollment period. Contact your current plan or Medicare to ask whether you may have access to for a special enrollment period.

Questions to ask your doctor or pharmacist

Before you fill a new prescription, ask your doctor or pharmacist these questions: Is this drug on my Medicare plan's formulary? What tier is it on, and how much will I pay? Are there generic alternatives that cost less? If your medication is expensive or you are entering the coverage gap, ask whether there are patient information programs or discount programs available.

If your doctor prescribes a brand-name drug and you know a generic version exists, ask whether the generic would work just as well for you. Generics have the same active ingredient and must meet the same FDA standards as brand-name drugs, but they cost significantly less.

Frequently Asked Questions

Does Medicare cover over-the-counter medications?

Original Medicare Part A and Part B do not cover over-the-counter drugs. Part D covers only prescription medications. Medicare Advantage plans sometimes offer limited coverage for over-the-counter items like pain relievers or cold medicine, but this varies by plan. Check your plan's summary of benefits to see what is included.

What happens to my drug coverage if I move to a different state?

Part D plans are available in every state, but the plans offered and their formularies may differ by state. If you move, your current plan may not be available in your new state. You can change your Part D plan or Medicare Advantage plan outside the annual enrollment period when you move. Contact your plan or Medicare to report your move and explore your options.

Can I use my Part D coverage at any pharmacy?

Part D plans have networks of participating pharmacies. You can use any pharmacy in the network and pay the standard copay. If you use an out-of-network pharmacy, you may pay more or the plan may not cover the drug at all. Check your plan's pharmacy directory or call the plan to confirm your pharmacy is in-network before you fill a prescription.

What if I cannot afford my copays?

If your income is low, you may may have access to for the Low-Income Subsidy (LIS) program, which helps pay your Part D premiums and copays. You can explore through your local Social Security office or online at SSA.gov. Some pharmaceutical companies and nonprofit organizations also offer patient information programs that provide free or reduced-cost medications regardless of your Medicare coverage.

Do I have to enroll in Part D when I first get Medicare?

If you have Original Medicare, Part D is optional but recommended. If you do not enroll when you first become may be able to access and later decide you want it, you may pay a late enrollment penalty for as long as you have Part D. The penalty is about 1 percent of the national average Part D premium for each month you delayed. If you have creditable drug coverage from another source (such as an employer plan), you may be able to delay enrollment without penalty.