What Medicare Part D Covers

Medicare Part D covers prescription drugs — both brand-name and generic medications — when you fill them at a pharmacy that works with your plan. Part D is optional insurance you buy separately from Original Medicare (Parts A and B), and it works through private insurance companies that Medicare approves. The drugs covered depend on which plan you choose, because each plan has its own list of covered medications called a formulary.

Part D covers drugs for any condition — diabetes, heart disease, mental health, infections, pain — as long as the drug is on your plan's formulary and you use a network pharmacy. You pay a monthly premium, and then you pay a share of the drug cost at the pharmacy counter. The amount you pay changes as you fill more prescriptions during the year, moving through different cost stages.

What Part D does not cover matters just as much. It does not cover over-the-counter medications, vitamins, or supplements. It does not cover drugs for cosmetic purposes or weight loss. It does not cover drugs that Medicare Part B already covers (like insulin you inject in a doctor's office, or chemotherapy drugs given in a hospital). And it does not cover drugs your doctor prescribes that are not on your plan's formulary, unless your plan approves an exception.

Key Takeaways

  • Part D covers prescription drugs at network pharmacies, but each plan has a different list of covered drugs called a formulary that you must check before you enroll.
  • You pay a monthly premium plus a share of the drug cost at the pharmacy, and your out-of-pocket costs change as you move through the plan's cost stages during the year.
  • Part D does not cover over-the-counter drugs, vitamins, supplements, or drugs already covered by Medicare Part B, such as insulin given in a doctor's office.
  • If your doctor prescribes a drug not on your plan's formulary, you can ask your plan for an exception, which takes a few days to a few weeks to decide.
  • You can switch Part D plans once a year during the annual enrollment period in October and November, so you can change plans if your drugs are no longer covered or costs rise.

How the Four Cost Stages Work During the Year

Part D divides the year into four cost stages, and your out-of-pocket costs change at each stage. Understanding where you are in the year matters because it affects how much you pay at the pharmacy.

Stage 1: Deductible. You pay the full cost of drugs until you reach your plan's deductible — usually $545 in 2024, but this amount changes each year. Once you hit the deductible, you move to Stage 2. Some plans have no deductible, so you skip this stage.

Stage 2: Initial coverage. After you meet the deductible, you and your plan share the cost. You typically pay 25 percent of the drug cost and your plan pays 75 percent, though some plans charge a flat copay per prescription instead. You stay in this stage until your total out-of-pocket costs reach $11,000 in 2024 (this amount changes yearly). Your out-of-pocket costs include what you pay at the pharmacy; what your plan pays does not count toward this limit.

Stage 3: Coverage gap (the "donut hole"). Once your out-of-pocket costs hit $11,000, you enter the coverage gap. In the gap, you pay 25 percent of brand-name drug costs and 25 percent of generic drug costs. Your plan does not help pay during this stage. You stay in the gap until your total out-of-pocket costs reach $12,750 in 2024. This stage can be expensive, and many people do not realize they are in it.

Stage 4: Catastrophic coverage. Once you spend $12,750 out-of-pocket, you reach catastrophic coverage. From that point through the end of the year, you pay only 5 percent of drug costs, and your plan covers the rest. This stage protects you from unlimited costs if you take many expensive drugs.

Formularies: How to Check If Your Drug Is Covered

Each Part D plan publishes a formulary — a list of drugs the plan covers. Formularies differ between plans, and they change every year. A drug your plan covered last year might not be on the formulary this year, or it might move to a higher cost tier.

Before you enroll in a Part D plan, you must check the formulary to see if your current drugs are covered. Go to Medicare.gov and use the Plan Finder tool. Enter your zip code, the drugs you take (use the exact drug name and dose), and the tool shows you which plans cover them and what you will pay. If your drug is not on a plan's formulary, the tool tells you that too.

If your doctor prescribes a drug that is not on your plan's formulary, you have options. You can ask your plan for a formulary exception — a request to cover the drug anyway. Your doctor must submit the request, usually with a reason why this specific drug is medically necessary. Plans must decide within 72 hours for urgent requests and within 7 days for standard requests. If your plan denies the exception, you can appeal.

You can also ask your doctor to prescribe a different drug that is on your plan's formulary, or you can pay out-of-pocket for the non-covered drug. Some people do this temporarily until they can switch plans in the fall.

Where to Fill Your Prescriptions

Part D only covers drugs you fill at a network pharmacy — a pharmacy that has a contract with your plan. Most major chains like CVS, Walgreens, and Walmart are in-network for most plans, but not all. Some plans also include mail-order pharmacies and specialty pharmacies for expensive drugs like biologics.

Before you enroll, check whether your regular pharmacy is in-network. Use the Plan Finder on Medicare.gov or call the plan directly. If your pharmacy is not in-network, you pay the full cost and cannot get reimbursed. If you switch plans and your pharmacy is no longer in-network, you can request an exception to use an out-of-network pharmacy, though plans rarely grant this.

If you use a mail-order pharmacy, delivery usually takes 7 to 10 days. Some plans offer a 90-day supply by mail, which can lower your copay for maintenance drugs you take long-term. Ask your plan whether mail-order is available and whether it saves you money compared to filling at a local pharmacy.

Special Situations: Low Income, Multiple Drugs, and Manufacturer Help

If your income is low, you may may have access to for Extra Help, a federal program that pays most or all of your Part D costs. Extra Help covers premiums, deductibles, and copays. You can explore through Social Security or your state Medicaid office. Income limits vary by state, but generally you may have access to if you earn under about $20,000 per year as an individual or $27,000 as a couple.

If you take many expensive drugs, you may reach the catastrophic stage early in the year. Once you do, your costs drop to 5 percent per drug for the rest of the year. Some people with chronic conditions spend thousands in the coverage gap before reaching catastrophic coverage, so it is worth calculating your expected costs before you enroll.

Drug manufacturers often offer patient information programs that cover the cost of their drugs, even if you are uninsured or underinsured. These programs are free and do not count toward your Part D deductible or out-of-pocket costs. Ask your doctor or pharmacist whether your drug has a manufacturer program, or search the drug name plus "patient information" online.

When Your Coverage Changes: Annual Enrollment and Special Situations

Part D plans change every year. Drugs move on and off formularies, copays rise, and premiums increase. You can change plans once a year during the Annual Enrollment Period, which runs from October 15 through December 7. Changes take effect January 1. If you do not actively choose a plan, Medicare may auto-enroll you in a plan, which may not be the best choice for your drugs.

If you lose Part D coverage during the year — for example, if you lose employer coverage — you have 63 days to enroll in a new plan without a penalty. If you miss this window and go without coverage, you pay a permanent penalty when you eventually enroll. The penalty is 1 percent of the national average Part D premium for each month you were uninsured.

If your plan drops a drug you need or raises the copay significantly, you can request a special enrollment period to switch plans outside the normal October-December window. Contact your plan or Medicare to ask whether you may have access to.

Frequently Asked Questions

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

No, Part D is optional. But if you delay enrolling and do not have other creditable prescription drug coverage, you pay a permanent penalty when you eventually enroll. The penalty is 1 percent of the national average Part D premium for each month you were uninsured. If you have coverage through an employer or union, you may not need Part D yet.

What happens if I cannot afford my copay at the pharmacy?

Talk to your pharmacist or plan about copay information programs. Many drug manufacturers offer copay cards that reduce your out-of-pocket cost. Nonprofits like NeedyMeds and Patient Advocate Foundation also maintain lists of free or low-cost drug programs. If you may have access to for Extra Help, your copays are capped at small amounts.

Can I use my Part D at a pharmacy outside the United States?

No. Part D only works at network pharmacies in the United States. If you travel abroad, you must pay out-of-pocket for drugs and keep receipts if you want to try to get reimbursed after you return, though reimbursement is not may provide.

What if my doctor prescribes a brand-name drug but a generic version is available?

Your plan may require you to try the generic first before it covers the brand-name drug. This is called step therapy. If the generic does not work for you, your doctor can request an exception, and the plan usually approves it within a few days.

Do I pay Part D costs toward my Part B deductible?

No. Part D costs are separate from Part B. Your Part D deductible, copays, and out-of-pocket costs do not count toward your Part B deductible, and vice versa. You manage them as two separate insurance plans.