Part D covers prescription drugs through private insurance plans you choose yourself

Part D is Medicare's prescription drug coverage. It is not run by Medicare directly — instead, private insurance companies offer Part D plans, and you pick one during enrollment. Part D covers most prescription medications, but not all of them, and what you pay depends on which plan you choose and which drug you need.

Part D is separate from Parts A, B, and C. You can have Part D alongside Original Medicare (Parts A and B), or it can be bundled into a Medicare Advantage plan (Part C). If you do not have any prescription drug coverage and you miss the enrollment window, you may pay a penalty for as long as you have Medicare.

Key Takeaways

  • Part D plans are offered by private insurers and vary in cost, deductible, and which drugs they cover — comparing plans before enrollment can save you hundreds of dollars per year.
  • Most Part D plans have a deductible you pay first, then a copay or coinsurance for each prescription, and a coverage gap (donut hole) where you pay more until you hit a spending threshold.
  • Certain drugs are not covered by any Part D plan, including most over-the-counter medications, drugs for weight loss, and some older or less common prescriptions.
  • You can change Part D plans once per year during the Annual Enrollment Period (October 15 to December 7), or if you have a may have access to life event.
  • If your income is low, you may be able to get help paying Part D premiums and out-of-pocket costs through the Low-Income Subsidy program.

What drugs Part D actually covers

Part D covers most brand-name and generic prescription medications. Each plan maintains a formulary — a list of covered drugs — and the formulary can differ between plans. A drug covered by one plan may not be covered by another, or it may be covered but require you to try a cheaper alternative first.

Drugs that Part D does not cover include most over-the-counter medications (like ibuprofen or antacids you can buy without a prescription), weight-loss drugs, fertility drugs, and some older or rarely prescribed medications. Your doctor or pharmacist can tell you whether a specific drug is on your plan's formulary, or you can check the plan's website yourself.

If your plan does not cover a drug your doctor prescribed, you have options: you can ask your doctor to prescribe a covered alternative, request that the plan make an exception (called a formulary exception), or switch to a different Part D plan during the next enrollment period.

How you pay: deductibles, copays, and the coverage gap

Most Part D plans charge you in stages. First, you pay a deductible — a set amount out of your own pocket before the plan starts paying. The deductible varies by plan; some plans have no deductible at all. Once you meet the deductible, you pay a copay (a fixed dollar amount per prescription) or coinsurance (a percentage of the drug's cost).

As you and your plan spend money on prescriptions, you move toward the coverage gap, also called the "donut hole." Once your total drug costs reach a certain amount (the amount varies by year), you enter the gap and pay a higher percentage of your drug costs until you reach the catastrophic coverage threshold. After that, you pay only a small copay or coinsurance for the rest of the year.

The exact dollar amounts and thresholds change each year. Your Part D plan's summary or your plan's website will show you where these thresholds are for the current year and what you will pay at each stage.

How to choose a Part D plan

Because formularies and costs vary widely, comparing plans before you enroll can save you real money. Start by making a list of all the prescription drugs you take regularly. Then use the Medicare Plan Finder tool on Medicare.gov to enter your drugs and see which plans cover them and what your total out-of-pocket cost would be under each plan.

When you compare, look at the plan's premium (monthly cost), deductible, copays for your specific drugs, and whether any of your drugs fall into the coverage gap. A plan with a low premium might have a high deductible or higher copays, so the cheapest plan is not always the best one for your situation.

You can change Part D plans once per year during the Annual Enrollment Period, which runs from October 15 to December 7. If you have a may have access to life event — such as moving to a new state, losing other drug coverage, or a significant change in your income — you may be able to change plans outside the enrollment period.

What happens if you miss enrollment or go without coverage

If you are may be able to access for Part D and do not enroll when you first become may be able to access, you will owe a late enrollment penalty for as long as you have Medicare. The penalty is calculated based on how long you went without coverage and increases each year you remain uninsured. Even if you enroll later, you will still owe the penalty on top of your regular premium.

The only way to avoid the penalty is to have had other creditable prescription drug coverage (coverage that is at least as good as Part D) during the time you were not enrolled in Part D. If you did have creditable coverage, you will need to show proof of it when you enroll.

If you cannot afford Part D premiums or out-of-pocket costs, the Low-Income Subsidy program may help. This program is run by Social Security, and it covers some or all of your Part D costs if your income and resources fall below certain limits. You can contact Social Security to ask about it, or your local Area Agency on Aging can help you understand whether you may be may be able to access.

How Part D works with other Medicare coverage

If you have Original Medicare (Parts A and B), you must choose a standalone Part D plan from a private insurer. If you have a Medicare Advantage plan (Part C), prescription drug coverage may already be included — some Medicare Advantage plans bundle Part D into the plan, while others do not. Check your plan documents to see whether drug coverage is included.

If you have Medicaid (state health insurance for low-income people) in addition to Medicare, Medicaid may cover some drugs that Part D does not, or it may cover the same drugs with lower copays. The way Medicaid and Part D coordinate depends on your state's rules.

Frequently Asked Questions

Can I use my Part D coverage at any pharmacy?

Most Part D plans have a network of pharmacies where you pay the copay or coinsurance listed in your plan. If you use an out-of-network pharmacy, you will usually pay more. Some plans cover mail-order pharmacies or offer discounts at certain chains. Check your plan's pharmacy network before you enroll.

What if my doctor prescribes a drug that is not on my plan's formulary?

You can ask your doctor to prescribe a covered alternative, or you can request a formulary exception from your plan. The plan will review the request and may approve it if your doctor explains why the non-covered drug is medically necessary. You can also switch to a different Part D plan during the next enrollment period.

Do I have to pay the late enrollment penalty forever?

Yes, the late enrollment penalty stays on your premium for as long as you have Part D. The only exception is if you had creditable coverage during the time you were not enrolled in Part D — in that case, you do not owe a penalty.

Can I get help paying for Part D if I have a low income?

Yes. The Low-Income Subsidy program helps people with limited income and resources pay Part D premiums and out-of-pocket costs. Contact Social Security or your local Area Agency on Aging to learn whether you may be may be able to access and how to request help.

What if I move to a different state?

If you move, your current Part D plan may no longer be available in your new state. A move is a may have access to life event, so you can change to a plan that is available where you now live. Contact your current plan or Medicare to let them know about your move.