Medicare Part D covers prescription drugs through private insurance plans you choose yourself
Medicare Part D is prescription drug coverage run by private insurance companies, not by Medicare directly. Part D plans decide which drugs they cover, so what one plan covers may differ from another plan. You pick a Part D plan during your enrollment period, and that plan's formulary — the official list of covered drugs — determines what you pay for.
Part D covers most prescription drugs, including brand-name and generic medications. However, your plan may require you to pay more for certain drugs, use a different drug first, or get approval from the plan before it will pay. The drugs that cost you the most out-of-pocket are usually those your plan does not cover at all, or those that require special permission.
Key Takeaways
- Each Part D plan has its own formulary listing which drugs it covers and at what cost tier, so comparing plans matters even if you take the same medications year to year.
- Part D covers most common prescription drugs, but your plan may require you to try a cheaper drug first or get prior authorization before paying.
- Drugs fall into cost tiers: generic drugs usually cost less, brand-name drugs cost more, and specialty drugs for serious conditions can cost the most.
- You can change your Part D plan once per year during the Annual Enrollment Period, or when ready if you lose coverage or move to a new state.
How Part D formularies work and why they differ between plans
A formulary is the list of drugs your specific Part D plan will pay for. Medicare requires all Part D plans to cover drugs in six broad categories: cancer drugs, diabetes drugs, heart and blood pressure drugs, drugs for mental health, drugs for HIV, and drugs for rheumatoid arthritis. Beyond those six, each plan chooses which other drugs to include.
Two people on different Part D plans may take the same medication but pay different amounts, or one plan may not cover it at all. This is why checking your plan's formulary before you sign up — or before your plan year starts — matters. You can search your medications on Medicare.gov using the Plan Finder tool, which shows you which plans cover each drug and at what cost.
Plans change their formularies every year, sometimes removing drugs or moving them to a higher cost tier. If your current plan stops covering a drug you take, you have the right to request a coverage exception, or you can switch to a different Part D plan during the Annual Enrollment Period (October 15 to December 7 each year).
The four cost tiers and what you pay at each level
Part D plans organize drugs into cost tiers. The tier your drug is on determines how much you pay out-of-pocket. Most plans use four tiers, though some use five:
| Tier | Drug Type | What You Typically Pay |
|---|---|---|
| Tier 1 | Generic drugs | Lowest copay, often $5 to $10 |
| Tier 2 | Preferred brand-name drugs | Higher copay, often $15 to $50 |
| Tier 3 | Non-preferred brand-name drugs | Even higher copay, often $30 to $100 |
| Tier 4 | Specialty drugs (for serious conditions) | Coinsurance (percentage of cost), often 25% to 33% |
Your plan may also require prior authorization — meaning the plan must approve the drug before the pharmacy will fill it — or step therapy, meaning you must try a cheaper drug first and show it did not work before the plan will pay for a more expensive one. These requirements are listed in your plan's formulary.
Drugs that Part D does not cover
Part D plans do not cover certain categories of drugs by law. These include over-the-counter medications (like aspirin or cold medicine), drugs used for weight loss, erectile dysfunction drugs, and cosmetic drugs. Part D also does not cover drugs used only for dental care or vision care, though some standalone dental or vision plans do.
If your plan does not cover a drug you need, you have options. You can request a coverage exception from your plan, explaining why you need that specific drug. You can also switch to a different Part D plan during the Annual Enrollment Period. Some people find that paying out-of-pocket for an uncovered drug costs less than switching plans, especially if they would pay more for other medications on a new plan.
What happens when you reach the coverage gap
Part D has a coverage gap, sometimes called the "donut hole." Once you and your plan have spent a combined $5,500 on covered drugs in 2024 (this amount changes yearly), you enter the gap. In the gap, you pay a higher percentage of drug costs — currently 25% for most drugs — until your out-of-pocket spending reaches $8,550 (also changes yearly).
Once you reach $8,550 in out-of-pocket costs, you enter catastrophic coverage, where your plan pays most of the cost and you pay only a small copay or coinsurance. The gap applies only to covered drugs; drugs your plan does not cover do not count toward reaching the gap or catastrophic coverage.
Some people with low income or limited resources may may have access to for Extra Help, a federal program that reduces Part D costs and eliminates the coverage gap. You can learn whether you may have access to by contacting Social Security or your State Health Insurance information Program (SHIP).
How to find out what your plan covers
Before you enroll in a Part D plan, use the Plan Finder tool on Medicare.gov. Enter each medication you take, and the tool will show you which plans cover it, what tier it is on, and what you will pay. You can also call the plans directly — phone numbers are on Medicare.gov — and ask whether a specific drug is covered.
If you already have a Part D plan, your plan sends you a formulary in the mail each year, usually in September. You can also view it online on your plan's website or call your plan's customer service number (on your insurance card) to ask about a specific drug.
If your doctor prescribes a new drug and you want to know whether your plan covers it before you go to the pharmacy, call your plan or ask your pharmacist to check. This takes a few minutes and can save you from paying out-of-pocket for a drug your plan does not cover.
When to ask your doctor about coverage and cost
Tell your doctor which Part D plan you are on, or at least which insurance company. If your doctor prescribes a drug and you know your plan does not cover it, ask your doctor whether there is a similar drug on your plan's formulary that would work for you. Many conditions have multiple treatment options, and your doctor can often switch to a covered alternative.
If your doctor believes a non-covered drug is medically necessary for you, ask whether they will submit a coverage exception request to your plan. Plans must respond to these requests within 72 hours. Your doctor's letter explaining why you need that specific drug can make the difference between approval and denial.
If a covered drug is on a high cost tier and you cannot afford the copay, tell your plan or your pharmacist. Some plans have patient information programs, and some drug manufacturers offer copay cards that reduce what you pay out-of-pocket.
Frequently Asked Questions
Can I switch Part D plans if my drug is no longer covered?
Yes. If your plan removes a drug from its formulary or moves it to a higher cost tier, you can switch to a different Part D plan during the Annual Enrollment Period (October 15 to December 7). You can also request a coverage exception from your current plan and ask them to cover the drug anyway, though approval is not may provide.
What if I cannot afford my copay?
Contact your plan to ask about patient information programs or copay reduction programs. Many drug manufacturers also offer copay cards that lower your out-of-pocket cost. If you have limited income, you may may have access to for Extra Help, which reduces Part D costs significantly. Contact Social Security or your State Health Insurance information Program to learn whether you may have access to.
Does Part D cover insulin?
Yes. Part D must cover insulin, and starting in 2024, your copay for insulin is capped at $35 per month. This applies to all Part D plans. If your plan requires prior authorization or step therapy for insulin, you can request an exception.
What if my pharmacy says my drug is not covered?
Ask the pharmacy to call your plan to confirm. Sometimes the pharmacy's system has not updated, or the drug may be covered under a different name. If your plan truly does not cover it, ask your pharmacist whether a generic version is available, or call your plan to request a coverage exception.
Do I have to use a specific pharmacy?
Most Part D plans have a network of preferred pharmacies where your copay is lower. You can use an out-of-network pharmacy, but you will pay more. Check your plan's pharmacy network on its website or call the plan to find pharmacies near you.