Plan D is a prescription drug coverage option that works alongside Original Medicare

Plan D is the name Medicare uses for prescription drug coverage. It is not a separate insurance plan you buy on its own — it is an add-on to Original Medicare (Parts A and B) that covers the cost of medications your doctor prescribes. You choose a Plan D from insurance companies that contract with Medicare, and the coverage and cost vary depending which plan you pick.

Plan D exists because Original Medicare does not cover prescription drugs. If you have Part A and Part B but no drug coverage, you pay the full price at the pharmacy. Plan D fills that gap by paying part of your medication costs, though you will still pay some amount out of your own pocket depending on the drug and your plan.

Plan D is different from Medicare Advantage (Part C), which is a single plan that bundles hospital, doctor, and drug coverage together. With Original Medicare plus Plan D, you keep your current Medicare coverage and add drug coverage separately.

Key Takeaways

  • Plan D is prescription drug coverage you add to Original Medicare, and you must enroll during your Initial Enrollment Period or pay a late penalty for as long as you have Medicare.
  • Each Plan D has a different list of covered drugs, different copays or coinsurance amounts, and different monthly premiums — comparing plans before you enroll can save you hundreds of dollars per year.
  • You pay a deductible first, then copays or coinsurance for each drug, and if your costs reach a certain amount you enter the coverage gap where you pay more out of pocket.
  • You can change Plan D once per year during the Annual Enrollment Period (October 15 to December 7), and you should review your plan every year because drug prices and formularies change.

How Plan D coverage works through the year

Plan D coverage has stages that determine how much you pay at different points in the year. Understanding these stages helps you predict your costs and know when your coverage changes.

First, you pay a monthly premium to the insurance company. This is the base cost of your plan and does not change month to month (unless the plan itself changes). Then, when you fill a prescription, you pay a deductible — a set amount you must pay out of your own pocket before the plan starts paying anything. Not all Plan D plans have a deductible, and the amount varies by plan. Once you meet the deductible, the plan begins to share the cost with you.

After the deductible, you pay a copay (a fixed dollar amount per prescription) or coinsurance (a percentage of the drug's cost) for each medication. The amount depends on which "tier" the drug is on — generic drugs are usually tier 1 with lower copays, while brand-name drugs are higher tiers with higher copays. Your plan's formulary (the list of covered drugs) tells you which tier each drug is on.

If your total drug costs reach a certain amount (called the initial coverage limit), you enter the coverage gap, sometimes called the "donut hole." In the gap, you pay a larger share of the cost — currently 25% of the price for most drugs. Once your out-of-pocket spending reaches a second threshold (called the catastrophic threshold), the plan pays most of the cost and you pay only a small copay for the rest of the year.

What Plan D does and does not cover

Plan D covers prescription medications that your doctor prescribes and that are on your plan's formulary. This includes most common drugs for conditions like high blood pressure, diabetes, heart disease, and arthritis. Each plan has its own formulary, so the same drug might be covered by one plan but not another, or covered at different cost levels.

Plan D does not cover over-the-counter medications, vitamins, or supplements unless your doctor prescribes them as a medication. It does not cover drugs used for cosmetic purposes, weight loss, or erectile dysfunction (with rare exceptions). Some plans exclude certain drug classes or require you to try a cheaper drug first before they will cover a more expensive one — this is called a prior authorization or step therapy.

Your plan's formulary can change during the year, and drugs can move to a higher tier or be removed entirely. Insurance companies must notify you if a drug you are taking is being removed or moved to a higher cost tier, and they must give you time to work with your doctor on an alternative.

Choosing a Plan D and when enrollment happens

You have many Plan D options to choose from, and each one has different drugs on its formulary, different copay amounts, and a different monthly premium. The plan that costs the least is not always the best for you — if your most important drugs are on a higher tier or not covered at all, a cheaper plan could cost you more overall.

You can enroll in Plan D during your Initial Enrollment Period, which is the seven-month window that includes the month you turn 65 and the three months before and after. If you miss this window and do not have other drug coverage, you will pay a late enrollment penalty — an extra amount added to your premium for as long as you have Medicare. The penalty is calculated based on how many months you went without coverage.

Once you are enrolled, you can change Plan D once per year during the Annual Enrollment Period, which runs from October 15 to December 7. Changes take effect January 1. You should review your plan every year because formularies change, new drugs become available, and your health needs may shift.

How to compare Plan D options

Medicare provides a tool called Medicare Plan Finder on Medicare.gov where you can enter the medications you take and see which plans cover them and at what cost. This tool shows you the monthly premium, deductible, copays for each drug, and your estimated total cost for the year based on your prescriptions.

When you compare plans, look at the total cost, not just the premium. A plan with a low premium might have high copays that cost you more overall. Check whether your most important drugs are on the formulary and what tier they are on. Look at whether the plan requires prior authorization or step therapy for any of your drugs — this can delay getting a prescription filled.

You can also call 1-800-MEDICARE to speak with someone who can help you compare plans, or contact the State Health Insurance information Program (SHIP) in your state, which offers free counseling about Medicare coverage options.

What happens if your drug is not covered or costs too much

If your plan does not cover a drug your doctor prescribed, you have options. You can ask your doctor to prescribe a different drug that is on your plan's formulary. You can ask your insurance company to make an exception and cover the drug anyway — this is called a formulary exception or coverage information. Your doctor can submit a request explaining why the drug is medically necessary.

If a drug is covered but the copay is very high, your doctor might be able to prescribe a generic version, which usually has a lower copay. You can also ask whether the drug manufacturer offers a patient information program that helps pay for the medication.

If you disagree with your plan's decision to deny coverage or charge a high copay, you have the right to appeal. Your insurance company must tell you how to file an appeal when they deny your request. You can also contact your state's SHIP program for help with the appeal process.

Plan D versus Medicare Advantage drug coverage

If you have Original Medicare, you must choose a separate Plan D to get drug coverage. If you have Medicare Advantage (Part C), drug coverage is usually included in that plan, and you do not buy a separate Plan D. Medicare Advantage plans often have lower premiums than Original Medicare plus Plan D combined, but they usually have smaller networks of doctors and pharmacies you must use.

Some people switch between Original Medicare and Medicare Advantage as their needs change. If you switch from Medicare Advantage to Original Medicare, you will need to enroll in Plan D during your enrollment period or you will face a late penalty. If you switch from Original Medicare to Medicare Advantage, you can drop your Plan D.

Frequently Asked Questions

Do I have to enroll in Plan D if I have Original Medicare?

No, but if you do not have drug coverage from another source (like an employer or union plan), you should enroll during your Initial Enrollment Period. If you miss that window and later enroll, you will pay a late penalty added to your premium for as long as you have Medicare.

Can I change Plan D plans if I realize I picked the wrong one?

Yes, you can change once per year during the Annual Enrollment Period (October 15 to December 7), and the new plan starts January 1. If your plan removes a drug you need or moves it to a higher tier, you may be able to change plans outside the enrollment period — contact your plan to ask.

What if I cannot afford my Plan D copays?

If your income is low, you may may have access to for the Low-Income Subsidy program, which helps pay your premiums, deductibles, and copays. Contact your local Social Security office or call 1-800-MEDICARE to learn about this program. Drug manufacturers also offer patient information programs that can help pay for specific medications.

Will my Plan D cover a drug my doctor just prescribed?

Check your plan's formulary on your insurance company's website or call the number on your insurance card. If the drug is not listed, ask your doctor whether a generic or different drug on your formulary would work. If not, your doctor can request a formulary exception from your plan.

What happens to my Plan D coverage if I move to a different state?

Most Plan D plans are available only in certain states or regions. If you move, your current plan may not be available in your new state. You can change to a different Plan D during the Annual Enrollment Period, or you may be able to change outside the enrollment period if your plan is no longer available where you live.