Medicare Plan G does not cover prescription drugs — you need a separate Part D plan for that

Medicare Plan G is a Medigap policy that covers costs Medicare Part B leaves with you: copayments, coinsurance, and deductibles for doctor visits, hospital care, and outpatient services. It does not include a prescription drug benefit. If you want drug coverage, you must enroll in a Part D plan separately, even if you choose Plan G.

This is true whether you buy Plan G through a private insurance company or through Medicare Advantage. The two coverage types work differently, but neither Plan G product includes medications.

Key Takeaways

  • Plan G covers your share of doctor and hospital bills, but prescription drugs are not part of any Medigap plan, including Plan G.
  • You must enroll in a Part D prescription drug plan separately if you want Medicare to help pay for medications.
  • Part D plans vary widely in which drugs they cover and how much you pay, so comparing plans before enrollment matters.
  • If you miss the important date to enroll in Part D when you first become may be able to access, you may pay a penalty for as long as you have Medicare.

How Plan G and Part D work together

Plan G and Part D are two separate products you buy from two separate insurance companies (though sometimes the same company sells both). Plan G pays toward your medical bills. Part D pays toward your prescriptions. You need both if you want full coverage.

When you visit a doctor, Plan G covers what Medicare Part B does not. When you fill a prescription, Part D covers what Medicare Part B does not (Part B covers very few drugs — mainly those given in a doctor's office or hospital). The two plans do not overlap or coordinate in a way that reduces your total cost; they straightforward cover different things.

What Part D covers and what you pay

Part D plans cover most common medications, but not all. Each plan maintains a formulary — a list of drugs the plan will help pay for. The formulary changes every year, and different plans cover different drugs. A medication your plan covered last year may not be on the formulary this year, or it may move to a higher cost tier.

When you fill a prescription, you typically pay a copayment (a flat amount like $10 or $50) or coinsurance (a percentage of the drug's cost). The amount depends on which tier the drug is on. Tier 1 drugs (generics) usually cost the least. Tier 2 (preferred brand-name) and Tier 3 (non-preferred brand-name) cost more. Tier 4 and Tier 5 (specialty drugs) can cost significantly more.

You also pay a monthly premium for Part D, which varies by plan. After you have paid a certain amount out of pocket in a year (called the initial coverage limit), you enter the "donut hole" — a gap where you pay more of the drug cost yourself. Once your out-of-pocket spending reaches a second threshold, catastrophic coverage kicks in and your costs drop again.

Drugs Part D does not cover

Part D plans are not required to cover certain categories of drugs. These typically include over-the-counter medications, drugs used to treat erectile dysfunction, weight loss drugs, and some others. Your Part D plan's formulary will list what is and is not covered. If a drug you need is not covered, you can ask your doctor to request an exception, though the plan may deny it.

If a drug is not covered by any Part D plan, or if you cannot afford the cost even with coverage, talk to your doctor about generic alternatives or lower-cost options. Some pharmaceutical companies offer patient information programs that reduce the cost of specific brand-name drugs for people who meet income requirements.

Enrolling in Part D when you have Plan G

You can enroll in Part D during your initial enrollment period (the seven months around your 65th birthday) or during the annual open enrollment period (October 15 to December 7 each year). If you miss these windows and do not have other creditable drug coverage, you will owe a late enrollment penalty — an extra amount added to your Part D premium for as long as you have Medicare.

When you enroll, you choose which Part D plan to join. You can use Medicare's Plan Finder tool on Medicare.gov to see which drugs are on each plan's formulary and what your costs would be. Because formularies and premiums change every year, it is worth comparing plans each October, even if you have been happy with your current plan.

If you are already enrolled in a Part D plan and switch to Plan G, your Part D coverage does not change. Plan G and Part D are independent; switching one does not affect the other.

What happens if you do not enroll in Part D

If you do not enroll in Part D when you first become may be able to access and you do not have other drug coverage, you will pay the full cost of prescriptions yourself. Later, when you do enroll, Medicare will charge you a late enrollment penalty based on how many months you went without coverage. The penalty is roughly 1 percent of the national average Part D premium for each month you were uninsured, and it stays on your premium permanently.

The only exception is if you had creditable coverage — drug coverage through an employer, a union, TRICARE, the VA, or another source that is at least as good as Part D. If you had creditable coverage, you can enroll in Part D later without a penalty. When you enroll, you will need to show proof that your previous coverage was creditable.

Questions to ask your doctor or pharmacist

Before you enroll in a Part D plan, ask your doctor or pharmacist which medications you take regularly and whether there are generic versions available. Ask whether any of your drugs are on the formulary of the plans you are considering. If a drug you need is not covered, ask whether your doctor can prescribe a similar drug that is covered, or whether the plan might make an exception.

If your Part D plan changes a drug's tier or stops covering it, ask your doctor whether a generic or lower-tier alternative would work for you. Sometimes a different drug in the same class costs much less and works just as well.

Frequently Asked Questions

Can I use Plan G without Part D?

Yes. Plan G covers medical costs, and Part D covers prescriptions. You do not have to buy Part D if you do not take regular medications or if you prefer to pay out of pocket for drugs. However, if you delay enrolling in Part D and later change your mind, you may owe a late enrollment penalty.

Does Plan G cover insulin or other diabetes medications?

No. Plan G does not cover any prescription drugs. Insulin and other diabetes medications are covered only by Part D plans. You will need to enroll in Part D separately to have Medicare help pay for these drugs.

What if my Part D plan stops covering a drug I need?

Contact your Part D plan and ask whether you can request a coverage exception. You can also switch to a different Part D plan during the annual open enrollment period (October 15 to December 7) if another plan covers the drug you need. Your doctor can help you find an alternative medication that is covered.

Do I pay the same copayment for every drug on my Part D plan?

No. Part D plans organize drugs into tiers, and each tier has a different copayment or coinsurance amount. Generic drugs are usually cheapest, and specialty drugs are usually most expensive. Your plan's formulary will show which tier each drug is on and what you will pay.

What is the donut hole, and how does it affect my costs?

The donut hole is a coverage gap that begins after you and your plan have paid a certain amount toward your prescriptions in a year. During the donut hole, you pay a higher percentage of the drug cost. Once your out-of-pocket spending reaches a second threshold, catastrophic coverage begins and your costs drop significantly. The exact amounts change each year.