Part D (Prescription Drug Coverage)

Medicare’s Prescription drug coverage. Medicare Parts A and B do no cover most prescriptions. However, drug coverage is available to everyone in Medicare by enrolling in a stand alone Part D plan or MAPD.

Part D

Limits on the coverage of prescription drug plans:

Over 43 million Medicare beneficiaries enrolled in Part D prescription drug plans. Even with the coverage these plans provide, there are certain limits, including:

What drugs are covered?

Each plan has a list of the specific drugs they will cover. This list is called the plan’s formulary.

What you pay for a  drug that is covered?

Many plans classify the drugs they cover by levels of cost, called drug coverage tiers. Generally, the lower the tier a drug is in, the lower your ost wuill be. Drugs in a higher tier will usually have a higher cost to you.

Phases of Part D Prescription Drug Coverage:

Your cost of prescriptions changes as you move through the various phases of prescription drug coverage.

Phase 1 💰
You pay until you reach your annual deductible
Deductible: This is the period before your coverage begins when you are still satisfying Medicare Part D's annual deductible.
Phase 2 💊
You pay a co-payment or co-insurance depending on the plan you selected, and your plan pays the rest.
Your Initial Coverage: After your have satisfied your deductible, your Medicare plan covers 75% of the drug cost. You pay the remaining 25%, up to a maximum amount called the initial coverage limit.
Phase 3 🍩
You pay a higher amount of your prescription costs until reaching your out-of-pocket drug expense limit.
The Coverage Gap or "Donut Hole" you enter the coverage Gap after you and your Medicare plan reach your initial coveraeg limit. Once your enter this gap period, you are responsible for 25% of your brand-name prescription drug cost, the pharmaceutical company is responsible for 70% of the prescription drug cost, and your Medicare part D plan is reponsible for 5% of the prescription frug cost. You remain in the coverage gap until you reach your out-of-pocket limit.
Phase 4 💳
Your co-pay is reduced
Catastrophic Coverage" begins after you reach your out-of-pocket limit; this is after you and the pharamceutical company-portion of the Coverage Gap reach $6,550. For the rest of the year, your Medicare Part D plan pays 95% of your drug costs and you pay the remaining 5%.

Selecting a Prescription Plan

Higher or lower deductible

Medicare prescription drug plans may charge additional premiums in addition to Part B premiums. Plans may include higher or lower deductible options that should be chosen based on overall health and how often you plan to use your insurance.

Note: If you join a Medicare Advantage (MA) Plan with prescription drug coverage, its monthly premium may include an amount for drug coverage.

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Higher Deductible Plans

Often provide lower premiums but will cost more before the insurance kicks in.

A higher deductible health plan might be right for you if:

  • You only have occasional medical emergencies
  • You’re healthy
  • you can afford to pay your deductible up front

Lower Deductible Plans

Make monthly health expenses easier to predict. Despite higher monthly premiums, they may save you monthly in the long run. 

A lower deductible health plan might be right for you if:

  • You depend heavily on the healthcare system
  • You take expensive prescription medications
  • You have a chronic condition or see a doctor often

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Extra Help paying for your medications 🤝

People on Medicare who need help paying for their prescription drug costs may be eligible to receive a low-income subsidy  (also known as LIS or Extra Help). About 1 in 3 people on Medicare currently receive subsidy.

The benefits of Extra help

  • Currently pay $3.70 for generic and $9.20 for brand-name drugs.
  • Have no “Donut Hole” in their Part D coverage.
  • May receive full or partial subsidies on premiums.

Are you eligible for Extra Help?

To find out, there are three ways to apply:

💻 Online at

📞 Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778)

🏢 In person at your local Social Security Office.

Choosing a Medicare Drug Plan: Considerations

Medicare drug plans are not all the same, and there are many options available. Here are some steps to complete before selecting your plan.

💰 Cost

  • Monthly Premiums: Consider the monthly costs of each plan before making your selection.
  • Deductibles: Choose whether you want a higher or lower deductible plan.
  • Co-pay / Co-insurance: Find out how much you will pay for hospital stays, doctor visits, and prescription drugs.

📑 Coverage

  • Formulary: Most drug plans have a formulary, a list of drugs that the pan covers. Plans ay have  rules-or tiers-about coverage for different drugs on their formulary.
  • Drug restrictions: When researching different drug plans, ask about any drug restrictions or limits in coverage. This will help ensure you are choosing the best possible option for your needs.

⌚ Convenience

  • In Network doctors and hospitals: In some plans you may need to visit only in network doctors and hospitals to get covered services.
  • Preferred pharmacies: Drug plans work with some but not necessarily all pharmacies in an area. These are called in-network pharmacies. Within the network, your drug plan may have a list of preferred pharmacies where you can get the best discount.
  • Mail order options for prescription drugs: most drug plans include this option, but each drug plan differs slightly. 

👍 Customer Service

  • Quality ratings / reviews: Customer reviews for each plan can be helpful in determining the best rated plans. You can always ask us about the ratings for the plans.

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How does other government insurance work with Medicare drug coverage (Part D)?

The types of insurance listed below are all considered creditable prescription drug coverage. In most cases, it is to your advantage to keep this coverage if you have it.

Federal Employee Health Benefits Program (FEHB)

This health coverage for current and retired federal employees and covered family members. These plans usually include creditable prescription drug coverage, so you don not need to get Medicare drug coverage (Part D). However, if you decide to get Medicare drug coverage, you can keep your FEHB plan, and in most cases, the Medicare plan will pay first.

Veterans' Benefits

This is health coverage for veterans and people who have served in the U.S. military. You may be able to get drug coverage through the U.S. Department of Veterans Affairs (VA) program. You may join a separate Medicare drug plan, but if you do, you can not use both types of coverage for the same drug at the same time.

CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs)

This is a comprehensive health care program in which the Department of Veterans Affairs shares the cost of covered health care services and supplies with eligible beneficiaries. You may join a separate Medicare drug plan, but if you do, you won’t be able to use the Meds by Mail program which can give your maintenance drugs to you at no charge (no premiums, deductibles and copayments).

TRICARE (military health benefits)

This is a health care plan for active-duty service members, military retires, and their families. most people with TRICARE entitled to Part A must have Part B to keep TRICARE drug benefits. If you have TRICARE, you do not need to join a separate Medicare drug plan. However, if you do, your Medicare drug plan pays first, and TRICARE pays second.

If you join a Medicare Advantage Plan with drug coverage, your Medicare Advantage Plan and TRICARE may coordinate their benefits if your Medicare Advantage Plan network pharmacy is also a TRICARE network pharmacy. Otherwise, you can file your own claim to get paid back for your out-of-pocket costs.

Indian Health Service

The IHS is the primary health care provider to the American Indian/Alaska Native Medicare population. The Indian health care system, consisting of tribal, urban, and federally operated IHS health programs, delivers a spectrum of clinical and preventive health services through a network of hospitals, clinics, and other entities. Many Indian health facilities participate in the Medicare drug program (part D). If you get drugs though an Indian health facility, you will continue to get drugs at no cost to you, and your coverage won’t be interrupted. Joining a Medicare drug plan or Medicare Advantage Plan with drug coverage may help your Indian health facility because the plan pays the Indian health facility the cost of your drugs.

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