Medicare prescription coverage depends on which plan you choose

Original Medicare (Parts A and B) does not cover prescription drugs on its own. If you have Original Medicare and want drug coverage, you must join a separate Part D plan — a prescription drug plan run by private insurers. Medicare Advantage plans (Part C) almost always include prescription coverage built in, though the drugs covered and what you pay vary by plan. The choice between these routes affects both which pharmacies you can use and what you pay out of pocket.

The coverage you get is not the same across all plans. One plan may cover a drug at a low cost while another charges much more, or does not cover it at all. Your doctor's preferred medication might be on one plan's list and off another's. This is why comparing plans before you enroll — or during the annual open enrollment period — matters more than the plan name itself.

Key Takeaways

  • Original Medicare does not cover prescriptions; you must add a Part D plan or switch to a Medicare Advantage plan that includes drug coverage.
  • Part D plans are sold by private insurers and cover different drugs at different costs, so two plans with the same name from different companies may cover different medications.
  • Medicare Advantage plans include prescription coverage, but the drugs covered and your out-of-pocket costs depend on which plan you choose.
  • You can change your prescription plan during the annual open enrollment period (October 15 to December 7) without penalty.
  • The drugs a plan covers are listed in its formulary, which you can view online before you enroll.

How Part D prescription drug plans work

Part D is a voluntary program. You enroll through a private insurance company, not Medicare directly. Each company sets its own list of covered drugs (called a formulary), its own copays and coinsurance amounts, and its own network of pharmacies. Two Part D plans from different insurers may have the same name but cover completely different drugs.

Part D plans have a standard structure with four cost stages. You pay a monthly premium, then a copay or coinsurance for each prescription until you reach a deductible (which varies by plan, from $0 to several hundred dollars). After that, you pay coinsurance until your total out-of-pocket spending hits a certain threshold — in 2024, that threshold is $7,050. Once you cross it, you enter the catastrophic phase and pay a small copay for most drugs for the rest of the year.

The gap between the threshold and catastrophic coverage is sometimes called the "donut hole." In this phase, you pay a larger share of the drug cost. Medicare has been closing this gap over time, but it still exists and can be expensive if you take multiple high-cost medications.

Medicare Advantage prescription coverage

Medicare Advantage plans (Part C) are all-in-one alternatives to Original Medicare. They cover hospital care, doctor visits, and prescription drugs in one plan. Most Advantage plans have $0 or low monthly premiums, though some charge more. The trade-off is that you must use doctors and pharmacies in the plan's network, and you usually need referrals to see specialists.

Prescription coverage in Advantage plans works differently from Part D. Instead of the four-stage structure, most Advantage plans charge a copay per prescription — say, $5 for generic drugs, $25 for brand-name drugs, $50 for specialty drugs. Some plans have a deductible you must meet first. The formulary (the list of covered drugs) is set by the Advantage plan, not a separate Part D insurer, so it is bundled into the plan's overall design.

If you switch from Original Medicare with Part D to an Advantage plan, or vice versa, your prescription coverage changes when ready. Make sure your current medications are covered under the new plan before you enroll, because switching mid-year is restricted to certain times of the year.

What to check before you enroll in any plan

Before you join a Part D plan or Advantage plan, look up each of your current medications in the plan's formulary. The formulary is a searchable database on the plan's website or on Medicare.gov. Search by drug name, and the formulary will tell you whether the plan covers it, what tier it is on (which determines your copay), and whether the plan requires prior authorization or step therapy (meaning you may have to try a cheaper drug first).

Check whether your pharmacy is in the plan's network. Part D plans usually have large pharmacy networks that include most chain pharmacies and many independent ones. Advantage plans sometimes have narrower networks. If you use a specialty pharmacy for a high-cost drug, confirm it is in the network before you enroll.

Compare the total estimated cost across plans, not just the premium. A plan with a low premium may have high copays. Use the plan comparison tool on Medicare.gov, which lets you enter your medications and shows you the estimated annual cost for each plan. This is the most accurate way to compare.

When you can change your prescription plan

The main enrollment window is the annual open enrollment period, which runs from October 15 to December 7 each year. Changes take effect on January 1. During this window, you can switch from one Part D plan to another, from Original Medicare to Advantage, or from Advantage back to Original Medicare with Part D.

If you miss open enrollment, you can still change plans if you have a may have access to life event — you turn 65, you lose employer coverage, you move out of state, or your plan leaves the market. You have 60 days from the event to enroll in a new plan. If your plan's formulary changes and your drug is no longer covered, you may also be able to switch outside the open enrollment window; contact your plan to ask.

If you do not enroll in prescription coverage when you first become may be able to access for Medicare, you may pay a late enrollment penalty if you join later. The penalty is added to your Part D premium for as long as you have Part D coverage. The only way to avoid it is to enroll during your initial enrollment period (the seven months around your 65th birthday) or within 63 days of losing other creditable coverage.

How to find the right plan for your medications

Start by listing all your current prescriptions, including the dose and how often you take them. Go to Medicare.gov and use the plan finder tool. Enter your medications, your preferred pharmacy, and your location. The tool will show you all available Part D plans and Advantage plans, ranked by estimated annual cost.

Look at the total cost, not just the premium. A plan with a $0 premium but high copays may cost more overall than a plan with a $40 monthly premium and lower copays. The plan finder calculates this for you based on your specific medications.

If a medication you need is not covered by any plan in your area, or if it is covered but requires prior authorization, call the plan and ask whether an exception is possible. Some plans will cover a non-formulary drug or waive prior authorization if your doctor requests it and explains why the covered alternative will not work for you.

Special situations: Low-income help and employer coverage

If your income is low, you may may have access to for Extra Help, a federal program that pays Part D premiums and reduces copays. You can explore through Social Security or your state Medicaid office. Extra Help covers the full premium for any Part D plan and caps your copays at $0 to $11 per prescription, depending on the drug tier.

If you have prescription coverage through a current or former employer, check whether it is considered creditable coverage — meaning it is at least as good as Medicare Part D. If it is, you can delay joining Part D without penalty. If it is not creditable, you should join Part D as soon as you become may be able to access to avoid the late enrollment penalty.

If you are still working and covered by your employer's health plan, you can stay on that plan instead of Medicare, as long as your employer has 20 or more employees. Your employer plan covers prescriptions. When you do retire and enroll in Medicare, you will have a special enrollment period to join Part D without penalty.

Frequently Asked Questions

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

You have three options. You can ask your doctor to prescribe a different drug that is on the formulary. You can request a formulary exception from your plan, which your doctor must support in writing. Or you can pay the full cost of the non-covered drug out of pocket. Formulary exceptions are sometimes granted, especially if you have tried the covered alternatives and they did not work.

Can I use any pharmacy with Part D, or am I locked into one network?

Part D plans have pharmacy networks, but the networks are usually very large and include most chain pharmacies and many independent pharmacies. You can use any pharmacy in the network. If you use a pharmacy outside the network, you pay more or the plan does not cover the drug at all. Check whether your preferred pharmacy is in the network before you enroll.

If I switch Medicare plans mid-year, what happens to my prescriptions?

You can only switch plans during open enrollment (October 15 to December 7) or if you have a may have access to life event. If you switch, your new plan's formulary takes effect on your effective date. If your current medication is not covered by the new plan, ask the new plan about a formulary exception before your coverage starts, so you are not caught without coverage.

Do I have to pay the late enrollment penalty forever?

Yes. The late enrollment penalty is a permanent increase to your Part D premium. It is calculated as 1% of the national average Part D premium for each month you were without coverage after you first became may be able to access. Once you enroll, the penalty stays on your premium for as long as you have Part D.

What is the difference between a copay and coinsurance?

A copay is a fixed dollar amount you pay for each prescription — for example, $10 for a generic drug. Coinsurance is a percentage of the drug's cost — for example, 20% of the price. Part D plans use both. Copays are more common for brand-name drugs; coinsurance is more common in the gap phase and for specialty drugs.