Medicare Part D and Part B cover prescription medications, but the drugs they cover and how much you pay depend on which plan you choose

Medicare Part D is the prescription drug coverage most seniors use. It is run by private insurance companies approved by Medicare, and you choose which plan to join during your enrollment period. Part D covers thousands of medications, though not every drug — your plan's formulary (the official list of covered drugs) determines what is included.

Medicare Part B covers some medications too, but only specific ones: drugs you receive in a doctor's office or hospital outpatient setting, like chemotherapy or certain biologics for rheumatoid arthritis. If you take a medication by mouth at home, Part B does not cover it — that is where Part D comes in.

If you do not join a Part D plan when you first become may be able to access, you may pay a penalty for as long as you have Medicare. The penalty amount changes each year and is added to your Part D premium if you join later.

Key Takeaways

  • Part D is a separate insurance plan you choose from private companies, and each plan has a different formulary of covered drugs and different costs.
  • You can change your Part D plan once a year during the annual enrollment period (October 15 to December 7), or if you have a may have access to life event.
  • Part D plans have a coverage gap (called the "donut hole") where you pay more out of pocket after spending a certain amount, though the gap has shrunk in recent years.
  • If your current medications are not on your plan's formulary, you can ask your doctor to request an exception, or you can switch plans during open enrollment.
  • Your Part D costs include a monthly premium, an annual deductible, copayments or coinsurance, and potentially higher costs in the coverage gap.

How Part D Plans Work and What They Cost

When you join a Part D plan, you pay a monthly premium to the insurance company. Most plans also have an annual deductible — the amount you must pay out of pocket before the plan starts to help pay for drugs. After you meet the deductible, you typically pay a copayment (a fixed dollar amount) or coinsurance (a percentage of the drug's cost) for each prescription.

The cost structure changes once you and your plan have spent a certain amount on covered drugs in a calendar year. In 2024, that threshold is $5,850. Once you reach it, you enter the coverage gap, where you pay a larger share of the cost until your out-of-pocket spending reaches a second limit (called catastrophic coverage). The exact amounts you pay in the gap depend on your plan, but the gap has become less expensive in recent years — in 2024, you typically pay 25 percent of the cost of brand-name drugs and generic drugs in the gap.

After your total out-of-pocket costs reach the catastrophic threshold (about $7,050 in 2024), Medicare and your plan cover most of the remaining cost for the rest of the year. These dollar amounts change annually.

Choosing a Part D Plan During Enrollment

You have the right to change your Part D plan once a year during the annual enrollment period, which runs from October 15 to December 7. Your new coverage starts January 1. This is the time to review whether your current plan still covers your medications at a cost that works for you.

To compare plans, use the Medicare Plan Finder tool on Medicare.gov. You enter your medications, and the tool shows you which plans cover them and what your costs would be under each plan. This is the fastest way to see whether switching plans would save you money or whether your current plan is still the best fit.

If you have a may have access to life event — such as losing employer coverage, moving to a new state, or a change in income — you may be able to change your plan outside the annual enrollment period. Contact Medicare at 1-800-MEDICARE to ask whether your situation qualifies.

What Happens If Your Medication Is Not on Your Plan's Formulary

Every Part D plan publishes its formulary, the list of medications it covers. If a medication you take is not on the list, you have several options. The first is to ask your doctor whether there is a similar medication on your plan's formulary that would work for you. Many conditions have multiple treatment options, and switching to a covered drug may be possible.

The second option is to request a formulary exception. Your doctor submits a written request to your insurance plan explaining why you need that specific medication — for example, because you have tried other drugs on the formulary and they did not work, or because you have a condition that requires this particular drug. The plan has 72 hours to respond. If the plan approves the exception, it will cover the drug even though it is not on the formulary. If it denies the request, you can appeal.

The third option is to switch to a different Part D plan during the annual enrollment period. Some plans cover medications that others do not, so comparing plans using Medicare Plan Finder before you enroll can prevent this problem from the start.

Part B Coverage for Medications Given in Medical Settings

Part B covers medications that are administered to you in a doctor's office, hospital outpatient department, or dialysis center. Examples include chemotherapy drugs, certain biologics for autoimmune conditions, vaccines, and medications given by injection or infusion. Part B also covers some oral medications that are taken in connection with a procedure or treatment in a medical setting.

For Part B-covered drugs, you typically pay 20 percent of the cost after you meet your Part B deductible. The provider's office bills Medicare directly, and you receive a bill for your share. Part B coverage is automatic if you have Medicare Part B — you do not choose a separate plan for it the way you do with Part D.

If you are unsure whether a medication your doctor wants to give you is covered by Part B, ask the provider's billing office before your appointment. They can check your coverage and tell you what you will owe.

Special Situations: Extra Help and Medicaid

If your income and resources are limited, you may be may be able to access for Extra Help, a federal program that pays some or all of your Part D costs. Extra Help covers premiums, deductibles, and copayments. To see whether you may have access to, contact your state Medicaid office or call 1-800-MEDICARE. The income limits vary by state and change annually.

If you have both Medicare and Medicaid (called "dual may be able to access"), Medicaid may cover some of your Part D costs that Medicare does not. Your state Medicaid program determines what it covers. Contact your state Medicaid office to learn what medications are covered under your state's plan.

Some people also have coverage through a former employer or union. If you do, that coverage may work alongside Medicare, or it may replace Part D. Check your plan documents or call the plan's customer service number to understand how your coverage works with Medicare.

Questions to Ask Your Doctor and Insurance Plan

Before you enroll in a Part D plan or if your medications change, ask your doctor which drugs you will be taking long-term and whether there are generic versions available. Generic medications are usually less expensive and are covered by most plans.

Ask your insurance plan whether your pharmacy is in-network — using an out-of-network pharmacy may cost you more. Also ask whether the plan offers mail-order or 90-day supplies at a lower cost, which can save money on medications you take regularly.

If you are prescribed a new medication, ask your doctor to check your Part D formulary before writing the prescription. This prevents the surprise of arriving at the pharmacy to find the drug is not covered. If your doctor prescribes a medication not on your plan's formulary, ask whether they can request an exception or suggest an alternative.

When to Review Your Coverage

Review your Part D plan every year during the annual enrollment period, even if you have not changed medications. Drug prices and plan formularies change annually, and a plan that was affordable last year may not be this year. The Medicare Plan Finder tool makes this comparison quick.

You should also review your coverage if you start a new medication, move to a new state, or have a major change in your health. Some plans are better for people taking many medications, while others work well for people taking just one or two. Matching your plan to your actual medication needs can save you hundreds of dollars a year.

Frequently Asked Questions

Can I use Part D at any pharmacy?

Most Part D plans have a network of pharmacies where you pay the lower copayment or coinsurance. Using an out-of-network pharmacy costs more. Check your plan's pharmacy list before you enroll, or call the plan to confirm your preferred pharmacy is in-network. Mail-order pharmacies are often in-network and may offer lower costs for 30-day or 90-day supplies.

What if I cannot afford my medications even with Part D?

Talk to your doctor or pharmacist about generic versions, which are usually much less expensive. Ask whether the drug manufacturer offers a patient information program — many do for people with limited income. If you think you may have access to for Extra Help, contact your state Medicaid office or call 1-800-MEDICARE. Some community health centers and nonprofits also offer low-cost medications.

Do I have to take the brand-name drug, or can my pharmacist give me the generic?

Your pharmacist can give you the generic version unless your doctor writes "brand medically necessary" on the prescription. Generics contain the same active ingredient as brand-name drugs and work the same way, but they cost much less. Ask your doctor whether the generic is appropriate for your condition.

What happens to my Part D coverage if I move to another state?

Your current Part D plan may not be available in your new state. You can change plans outside the annual enrollment period if you move, so contact your current plan and Medicare to understand your options. Use Medicare Plan Finder to see which plans are available where you are moving.

Can I get my Part D prescription filled before the annual enrollment period ends?

Yes. If you are switching plans on January 1, you can fill prescriptions under your current plan through December 31. Your new plan's coverage begins January 1. If you need a medication before your new plan's coverage starts, ask your pharmacist whether they can fill a smaller supply under your current plan so you do not run out.