Your ultimate guide to Medicare Part D (prescription drug coverage)
Original Medicare does not include coverage for prescription drugs, Medicare individuals can voluntarily enroll in Medicare Part D to get this coverage.
What is Medicare Part D?
Medicare Part D helps cover the cost of prescription drugs. Part D is optional and only provided through private insurance companies approved by the federal government. However, Part D is available to everyone who qualifies for Medicare. Costs and coverage vary from plan to plan.
If individuals do not enroll in Medicare Part D when eligible for Medicare, they may later pay a late enrollment penalty. If a person has creditable drug coverage from an employer or other private insurance, they can delay enrolling in a Part D plan without penalty.
There are two ways to get Medicare drug coverage (Part D):
- Medicare drug plans. These standalone plans add Medicare drug coverage (Part D) to Original Medicare. And to some Medicare Cost Plans, Medicare Advantage Private-Fee-for Service Plans, and Medicare Advantage Medical Savings Account (MSA) Plans. Individuals must have Part A and/or Part B to enroll in a separate Medicare Drug plan.
- Medicare Advantage Plans or other Medicare health plans with drug coverage. Medicare individuals get their Part A, Part B often Part D and added benefits through these plans. Enrollees must have both Part A and Part B to join a Medicare Advantage plan. And not all Medicare Advantage plans offer added benefits drug coverage. If you go this route, be sure the plan includes Part D coverage.
However a person gets their Medicare Part D, they must live in the service area of the plan they want to join. And be lawfully present in the U.S.
What does Medicare Part D cover?
Part D plan benefits include coverage for prescription drugs. However, all Part D plans have a list of approved drugs referred to as formulary. Plans only cover the cost of prescription drugs if they include the drugs in the formulary of a particular plan.
What drugs does Medicare Part D cover?
Before enrolling in any Part D plan, be sure to check the plan’s drug list (formulary) and make sure it includes the medications you need.
Plans with the same carrier also differ. So don’t presume all the same carrier plans cover the same drugs.
All Part D plans must include generic and brand-name prescription drugs. They must also include categories and classes of drugs that cover all disease. They must include:
- Antipsychotic medications
- Antidepressants
- Anticonvulsive medications
- Immunosuppressant drugs
- HIV/AIDS medications
- Anticancer drugs (unless covered by Part B)
- Vaccines
Part D plans can change their formularies and drop or add drugs to a plan’s drug list. The plan carrier notifies enrollees in advance when they revise a plan’s drug list.
How does Part D Medicare work?
Once enrolled in a Part D plan, members must pay the monthly premium. Medicare then helps cover your prescription drug costs. Members also pay coinsurance and deductibles for prescriptions drugs the plan covers.
As already stated, each Part D plan has a formulary (list of drugs the plan covers). These drugs are classified into different tiers based on the type of drug and cost. The lower tiers cost less. Each Part D plan has different tier classifications for their approved drugs. You can use Medicare resources to check a plan’s formulary and tier classification.
Attain Health™ has a quick and easy Plan Finder. It helps a person find the right Part D plan for their needs and budget.
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Medicare Part D notices
The Annual Notice of Change (ANOC) is a notice members receive from their Medicare Advantage or Part D plan in mid to late September. The ANOC gives a summary of any changes in the plan’s costs and coverage that take effect January 1 of the next year. If you do not receive an ANOC, contact the plan. The ANOC is typically mailed or emailed with the plan’s Evidence of Coverage (EOC).
The EOC is a booklet that provides details about a Medicare health plan or drug plan for the upcoming year. It includes information about coverage, costs, rights and responsibilities, plan detail, and contact information.
Be sure to review the ANOC and EOC to see if your current plan continues to meet your health and medication needs in the following year.
If you’re unhappy with the new plan changes, you can enroll in, switch, or drop your Medicare health plan or prescription drug coverage. You can switch plans during the Annual Enrollment Period (AEP). It runs each year from October 15 to December 7. Coverage starts on January 1 for any new plan changes made during AEP.
Medicare Part D costs in 2025
The average total premium for standard Medicare Part D coverage for 2025 is $46.50 per month. Medicare Part D monthly premiums vary for a number of reasons. These include the plan’s location, type of plan and whether it offers basic or enhanced benefits. Costs also take into consideration the value of the basic or enhanced benefits.
Individuals with higher incomes pay higher premiums. Also referred to as “Part D IRMAA.”
It’s important to know that apart from the monthly premium, the Part D coverage also comes with other costs like deductibles and coinsurance. The maximum annual deductible for Part D in 2025 is $590. Plans may have lower or no annual Part D deductible.
Coinsurance and copayment costs for a Plan D plan depends on the particular plan. And the drug tier a drug is under. Copayments are lowest for Tier-1 drugs (most generic prescription drugs). Copayments are higher for the highest drug tier that includes specialty drugs.
Below is a list of drug tiers:
- Tier 1: Least expensive drug options, often generic drugs.
- Tier 2: Generic drugs. These are also generic drugs but cost a little more than Tier 1 drugs. Higher price generic and lower-price brand-name drugs.
- Tier 3: Preferred brand drugs.
- Tier 4: Non-preferred drugs.
- Tier 5: Specialty drugs. Highest-cost drugs including most specialty medications. This tier usually includes very high-cost brand-name drugs.
Extra Help Medicare Part D
Medicare individuals with limited income and resources, may qualify for Extra Help. This program helps cover costs like Part D premiums, deductibles, and coinsurance.
Depending on their situation, individuals may qualify for Extra Help automatically.
This includes those who:
- Get help from the state to pay Part B premiums
- Get full Medicaid coverage
- Receive SSI benefits from Social Security
Those who do not qualify for Extra Help automatically can apply for the Extra Help program through the Social Security Administration. Extra Help only helps with the cost of covered prescription drugs once a person enrolls in a Part D plan.
When can you sign up for Medicare Part D?
There are three enrollment periods when Medicare individuals can join a Medicare Part D plan.
- Initial Enrollment Period (IEP): This period begins three months before the month you turn 65. And includes the month you turn 65 and ends three months after. During this time, you can choose a Part D plan after enrolling in Medicare Part A and/or Part B.
- Annual Election Period (October 15 to December 7): This period takes place every fall. Coverage begins the following January 1. During this time, you can change your Medicare health plan or Medicare prescription drug coverage for the following year.
- Special Enrollment Period (SEP): You can enroll in a Part D plan during an SEP if you experience a qualifying life event. This includes moving, losing employer health care coverage, or losing drug coverage that’s comparable to a basic Part D plan.
Medicare Part D late enrollment penalty
If you do not enroll in Medicare Part D when you’re first eligible, you will have a penalty for late enrollment when you eventually enroll. Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($36.78 in 2025) times the number of full, uncovered months an individual didn't have Part D or creditable coverage. The monthly penalty is rounded to the nearest $.10 and added to the enrollee’s monthly Part D premium.
A person pays this penalty for as long as they have Part D prescription coverage.
If you have creditable drug coverage from an employer or union, you will not pay a late enrollment penalty. But this only applies if the individual does not go 63 days or more without creditable drug coverage. Check with your plan provider to see if your coverage meets Medicare’s requirements for creditable coverage.
It’s best to enroll for Part D when you first become eligible. Even if you don’t have prescription drug needs. This ensures you do not have to pay higher premiums in the future due to the Part D penalty.
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How to sign up for Part D Medicare
When looking for Part D prescription coverage, it’s important to compare the plans available in your area to find one that fits your needs and budget. Each plan can vary in cost and specific drugs they cover. Before enrolling in a plan, be sure to check if the plan’s formulary (drug list) includes the medications you need.
- Medicare has a Plan Finder tool to to help you find and compare Part D plans in your area.
- You can also get help enrolling by calling 1-800-MEDICARE (1-800-633-4227) for guidance. (TTY users can call 1-877-486-2048).
- You can also contact the plan carrier directly for assistance in enrollment. And get help with understanding the plan’s coverage and benefits.
To get started on finding a plan, you can also use the Attain Health plan finder. It compares Part D plans and finds a plan based on your needs. Medicare is as simple as you make it. If you prefer to be in control, make informed decisions, and don’t want to waste time, this is for you.
Frequently Asked Questions
No, individuals on Medicaid do not have to enroll in Medicare Part D. They qualify for prescription drug coverage automatically with Extra Help. Medicare Part D is voluntary. So, Medicaid enrollees can opt out of prescription drug coverage. If they do opt out, they must pay for their medications out of pocket.
No, Medicare Part D is an optional coverage that covers the cost of prescription drugs for those with Medicare. People can opt not to enroll in Part D if they have creditable drug coverage from an employer or private insurance. If a person decides not to enroll in Part D when eligible and does not have creditable drug coverage, they will pay a penalty when they enroll later.
No, there are specific enrollment periods when you can sign up for Medicare Part D:
- Initial Enrollment Period (IEP): When Medicare eligibles can first enroll in Medicare.
- Annual Enrollment Period (AEP): When Medicare individuals can enroll in, switch, or drop their Medicare coverage. It runs every year from October 15 to December 7.
- Special Election Period (SEP): In special circumstances, individuals may qualify for a special enrollment outside of IEP and AEP.
Yes, Original Medicare and all Medicare Supplement Insurance policies do not cover prescription drugs. If you want Part D prescription drug coverage, you must enroll in a separate Medicare drug plan. (Medigap policies sold after January 1, 2006, no longer include prescription drug coverage.)
Yes, the shingles vaccine and other necessary vaccines to prevent illnesses are covered under Medicare Part D. Part B also covers some vaccines.
Medicare Part D does not cover:
- Drugs to treat anorexia, weight loss, or weight gain
- Fertility drugs
- Drugs for cosmetic purposes or hair growth
- Drugs for relief of cold or cough symptoms
- Drugs to treat erectile dysfunction
Yes, Medicare Part D prescription drug coverage is well worth it. Part D helps those on Medicare pay for the medications they need. Part D coverage helps reduce out-of-pocket costs for prescription drugs people use and need for various health conditions.
In August 2022, Congress passed the Inflation Reduction Act (IRA) to lower health care and prescription drug costs for older adults, people with disabilities, and families across the U.S. This legislation helps millions of Americans from draining their savings to pay for lifesaving prescription drugs.
Already, provisions from IRA are lowering costs and improving health care. As of January 2023, IRA capped the cost of insulin for Medicare Part D enrollees at $35 a month for a one-month supply of each Part D-covered insulin. And there’s no deductible for it.
Beginning 2025, the law also limits Medicare individuals’ out-of-pocket costs at $2,000 per year. Once drug costs are high enough to reach this cap, members don’t pay a copayment or coinsurance for Part D drugs the rest of the calendar year.
IRA also instituted a new provision to impose penalties on drug companies that hike up prices in Medicare above the rate of inflation. Thanks to IRA, those on Medicare Part D have access to covered vaccines, such as shingles, Tdap, and COVID-19, at no cost. And the law expands cost-sharing assistance for low-income people with Medicare.
Lastly, the Centers for Medicare and Medicaid Services (CMS) released the first 10 prescription drugs eligible for negotiation, with additional prescription drugs becoming eligible for negotiation in the coming years.
Attain Health™ recognizes Medicare coverage can be overwhelming. That’s why we created Medicare Angel. It’s a digital self-directed tool. It closely monitors changes to users’ health care and prescription drug plans and the Medicare market.
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