Part D covers prescription drugs at pharmacies and through mail order

Part D is Medicare's prescription drug coverage. It pays for medications you take at home — pills, inhalers, injections, and other drugs your doctor prescribes. Part D does not cover drugs you receive in a hospital or nursing home during a stay; those are covered under Part A or Part B instead.

Part D is run by private insurance companies that contract with Medicare. Each company decides which drugs it will cover, how much you pay, and which pharmacies you can use. This means your Part D plan from one company may cover different drugs or charge different prices than another company's plan, even though both are Medicare plans.

You choose a Part D plan during your initial enrollment period when you first become may be able to access for Medicare, or during the annual open enrollment period from October 15 to December 7 each year. If you do not join a plan when you are first may be able to access and you do not have other drug coverage, you may pay a higher premium for the rest of your life.

Key Takeaways

  • Part D covers most prescription medications, but each plan's formulary (list of covered drugs) differs, so you need to check your specific plan's list before filling a prescription.
  • You pay a monthly premium, an annual deductible (if your plan has one), and a copay or coinsurance for each prescription, with costs varying by plan and by drug tier.
  • Part D includes a coverage gap called the "donut hole," where you pay more out of pocket after reaching a certain spending threshold, though this gap shrinks each year.
  • You can switch Part D plans once per year during open enrollment, and you should review your plan annually because your medications, costs, and available plans may change.
  • If your plan does not cover a drug your doctor prescribed, you can ask your doctor to request a coverage exception, which the plan must review within 72 hours.

What drugs Part D typically covers

Part D plans must cover drugs in six categories: anticonvulsants, antidepressants, antiretrovirals (for HIV), immunosuppressants, proton pump inhibitors (for acid reflux), and statins (for cholesterol). Beyond these six, each plan chooses which other drugs to cover. Most plans cover common medications for heart disease, diabetes, high blood pressure, arthritis, and other chronic conditions that seniors often take.

The list of covered drugs is called a formulary. You can find your plan's formulary on Medicare.gov or by calling your plan directly. Before you fill a new prescription, it is worth checking the formulary to see whether the drug is covered and what you will pay. If your doctor prescribes a drug that is not on your plan's formulary, you have options: you can ask your doctor to prescribe a different drug that is covered, or you can ask your plan to make an exception.

Part D does not cover certain drugs: over-the-counter medications (unless prescribed by your doctor and covered by your plan), drugs used for cosmetic purposes, vitamins and minerals (unless prescribed for a specific medical condition), and drugs that are not approved by the Food and Drug Administration.

How you pay: premiums, deductibles, and copays

Part D costs you money in three ways. First, you pay a monthly premium — the cost of the plan itself. This varies by plan and by region; some plans cost $5 per month, others cost $100 or more. Second, many plans have an annual deductible, which is the amount you must pay out of pocket before the plan starts to help pay for drugs. Some plans have no deductible. Third, for each prescription you fill, you pay a copay (a flat amount like $5 or $15) or coinsurance (a percentage of the drug's cost).

Drugs are organized into tiers, and your copay or coinsurance depends on which tier your drug is in. Tier 1 drugs (usually generic) cost less; Tier 5 drugs (usually brand-name with no generic) cost more. A single plan might charge $5 for a Tier 1 drug, $25 for a Tier 3 drug, and 25% coinsurance for a Tier 5 drug.

If you take multiple medications, add up the monthly premiums and the copays for each drug to understand your total yearly cost. Many people find that switching to a different Part D plan saves them hundreds of dollars per year, which is why reviewing your plan annually matters.

The coverage gap and how it works

Once you and your plan have paid a combined total of $5,850 toward your prescriptions in a calendar year (this amount changes each year), you enter the coverage gap, sometimes called the "donut hole." In the gap, you pay a larger share of your drug costs — currently 25% of the cost of brand-name drugs and generic drugs — until your out-of-pocket spending reaches $8,550 (this amount also changes yearly).

After you spend $8,550 out of pocket, you enter catastrophic coverage, and the plan pays most of your drug costs for the rest of the year. You pay only a small copay or coinsurance.

The coverage gap affects people who take many medications or expensive drugs. If you take only a few inexpensive drugs, you may never reach the gap. If you do reach it, the gap shrinks each year by law, meaning you pay less in the gap as time goes on. Some plans offer coverage in the gap for certain drugs, so comparing plans matters if you know you will reach the gap.

What to do if your drug is not covered

If your doctor prescribes a drug that is not on your plan's formulary, you have three paths forward. First, ask your doctor whether a similar drug on your plan's formulary would work for you. Many conditions have multiple treatment options, and switching to a covered drug may be safe and effective.

Second, you can ask your plan for a formulary exception (also called a coverage exception). Your doctor submits a request explaining why this specific drug is medically necessary for you. The plan must respond within 72 hours for urgent requests or 7 calendar days for standard requests. If the plan says no, you can appeal.

Third, you can pay out of pocket for the uncovered drug while continuing to take covered drugs through your plan. This is expensive but sometimes necessary if no covered alternative exists and the plan denies your exception request.

How to choose and switch Part D plans

To find the right Part D plan for you, start by listing all the medications you take. Then go to Medicare.gov and use the Plan Finder tool. Enter your medications, and the tool will show you which plans cover each drug, what you will pay at different pharmacies, and your total estimated yearly cost for each plan. This takes 15 to 20 minutes but can save you hundreds of dollars.

You can switch Part D plans once per year during the annual open enrollment period, October 15 to December 7. Changes take effect January 1. If you miss this window, you cannot switch until the next year unless you have a may have access to life event — such as moving to a new state, losing other drug coverage, or becoming may be able to access for Medicaid.

Review your plan every year, even if you do not switch. Drug prices change, new drugs become available, and your medications may change. A plan that was cheapest last year might be expensive this year.

Using your Part D coverage at the pharmacy

When you fill a prescription, give the pharmacy your Medicare card and tell them which Part D plan you have. The pharmacy checks your plan's formulary and tells you what you owe. If there is a problem — for example, the pharmacy is out of network or the drug is not covered — the pharmacist will tell you right away.

Some pharmacies offer generic drugs at a very low cost (sometimes $4 for a month's supply) even if your Part D copay would be higher. Ask the pharmacist whether a generic version of your drug is available at that price. If it is, you can often pay the pharmacy's price instead of your Part D copay.

If you use mail-order pharmacy, the process is similar: you send your prescription to the mail-order pharmacy, and they verify coverage before shipping your medication. Mail-order is often cheaper for drugs you take long-term because you can order a 90-day supply instead of a 30-day supply.

Frequently Asked Questions

Does Part D cover insulin?

Yes. Part D covers insulin and other diabetes medications. However, your copay or coinsurance depends on your plan and which insulin you use. Some plans cover certain insulins at lower costs than others. Check your plan's formulary to see what you will pay for your specific insulin.

What happens if I do not join Part D when I first become may be able to access?

If you do not join when you are first may be able to access and you do not have other drug coverage, you will pay a higher monthly premium for as long as you have Part D. The penalty is about 1% of the national average Part D premium for each month you were not enrolled. This penalty is permanent.

Can my Part D plan change my formulary during the year?

Yes, plans can remove drugs from their formulary or move drugs to a higher tier during the year, though they must notify you in advance. If a drug you are taking is removed or moved to a higher tier, you may be able to request a coverage exception or switch plans outside the normal enrollment period.

Do I pay Part D costs if I am in a nursing home?

No. Drugs you receive while you are an inpatient in a hospital or nursing home are covered under Part A or Part B, not Part D. Part D covers only drugs you take at home or in outpatient settings like a doctor's office or clinic.

What if I cannot afford my Part D copays?

If your income is low, you may be may be able to access for Extra Help, a program that pays Part D premiums and copays. You can learn more about Extra Help on Medicare.gov or by calling 1-800-MEDICARE. Some pharmaceutical companies also offer patient information programs that provide free or low-cost drugs to people who meet income requirements.