Medicare Part D is prescription drug coverage. You can get Medicare Part D either through a stand-alone plan or through a Medicare Advantage plan. If your Medicare Advantage plan includes prescription drug coverage, you cannot be enrolled in a stand-alone Medicare Part D Prescription Drug Plan at the same time. Stand-alone Part D prescription drug plans generally go together with Original Medicare (Medicare Part A and Medicare Part B) coverage.
Am I automatically enrolled in Medicare Part D?
No. All Part D plans must be purchased through private insurance companies and not by the federal government. If you choose not to purchase a Medicare Part D plan you will generally only get Original Medicare coverage for prescription drugs if you receive them as a hospital inpatient or as injection as a doctor office outpatient. There may be other limited situations where Original Medicare will pay for prescription drugs. Without Medicare Part D coverage, you may have to pay for most of your prescription drugs out of pocket.
Do I have to get a Medicare Part D plan?
No. Medicare Part D is optional. However, there may be additional future costs to you if you don't get Part D when you're first eligible
The late enrollment penalty is an amount that's permanently added to your Part D premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there's a period of 63 or more days in a row when you don't have Medicare drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.
The late enrollment penalty can be avoided if you get Extra Help or have other creditable drug coverage. Creditable coverage is a plan that meets a minimum set of qualifications. Types of creditable coverage plans include group health plans, individual health plans, student health plans, as well as a variety of government-sponsored or government-provided plans.
Should I join a stand alone Medicare Part D plan?
Maybe. If you have Original Medicare (Part A and Part B) you may want to join a stand alone Part D plan. If you join a Medicare Advantage Plan, you’ll usually get drug coverage through that plan. If you’re in a Health Maintenance Organization, HMO Point-of-Service plan, or Preferred Provider Organization, and you join a separate drug plan, you’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.
You can only join a separate Medicare drug plan without losing your current health coverage when you’re in a:
Will my prescriptions be covered?
It depends. Each Medicare Part D prescription drug plan has its own formulary, which is a list of drugs covered by the plan. Because every formulary is different, it’s important to check the plan’s formulary to see if your medications are covered. Most plans provide access to their formulary on their websites; you can also request a copy by calling the plan’s customer service number or contact your agent.
Medicare Part D plans are allowed to set coverage rules. Some of these rules include:
If you are a member of a stand-alone prescription drug plan or a Medicare Advantage plan with prescription drug coverage, you have rights and options if your medication is not listed on your plan’s formulary. You will need to work with your doctor to find the option that is best for you.
How much will my medication cost me?
You'll make these payments throughout the year in a Medicare drug plan including deductible and copay or coinsurance. This can vary based on factors such as whether your drug is on the plan formulary, what tier the drug is on, and whether you have met your deductible or have entered the catastrophic phase of coverage.
What's a Tier?
Many Part D prescription drug plans place prescription drugs into different cost-sharing “tiers” or levels. A drug in a lower tier will cost you less than a drug in a higher tier.
Here’s an example of how a plan might divide its drug tiers:
If your doctor prescribes a drug on a higher tier rather than a similar drug on a lower tier, you may be able to file an exception and get a lower copayment. You can also ask your doctor or prescriber if there is a generic or less-expensive medication available that could also be effective at treating your condition. You may be able to get a temporary supply if you are new to a Medicare Part D plan that does not have your current medication on it's formulary or if the plan requires a Prior Authorization.
What portion of my drug costs will I be responsible for?
Cost sharing can change throughout the year based on which of the four cost sharing phases you are in.
Medicare Part D coverage can work with other insurance. Visit medicare.gov to learn how your Medicare Part D will work with your other insurance.
Am I automatically enrolled in Medicare Part D?
No. All Part D plans must be purchased through private insurance companies and not by the federal government. If you choose not to purchase a Medicare Part D plan you will generally only get Original Medicare coverage for prescription drugs if you receive them as a hospital inpatient or as injection as a doctor office outpatient. There may be other limited situations where Original Medicare will pay for prescription drugs. Without Medicare Part D coverage, you may have to pay for most of your prescription drugs out of pocket.
Do I have to get a Medicare Part D plan?
No. Medicare Part D is optional. However, there may be additional future costs to you if you don't get Part D when you're first eligible
The late enrollment penalty is an amount that's permanently added to your Part D premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there's a period of 63 or more days in a row when you don't have Medicare drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.
The late enrollment penalty can be avoided if you get Extra Help or have other creditable drug coverage. Creditable coverage is a plan that meets a minimum set of qualifications. Types of creditable coverage plans include group health plans, individual health plans, student health plans, as well as a variety of government-sponsored or government-provided plans.
Should I join a stand alone Medicare Part D plan?
Maybe. If you have Original Medicare (Part A and Part B) you may want to join a stand alone Part D plan. If you join a Medicare Advantage Plan, you’ll usually get drug coverage through that plan. If you’re in a Health Maintenance Organization, HMO Point-of-Service plan, or Preferred Provider Organization, and you join a separate drug plan, you’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.
You can only join a separate Medicare drug plan without losing your current health coverage when you’re in a:
- Private Fee-for-Service Plan
- Medical Savings Account Plan
- Cost Plan
- Certain employer-sponsored Medicare health plans
Will my prescriptions be covered?
It depends. Each Medicare Part D prescription drug plan has its own formulary, which is a list of drugs covered by the plan. Because every formulary is different, it’s important to check the plan’s formulary to see if your medications are covered. Most plans provide access to their formulary on their websites; you can also request a copy by calling the plan’s customer service number or contact your agent.
Medicare Part D plans are allowed to set coverage rules. Some of these rules include:
- Prior Authorization - If your plan requires prior authorization for a medication you are taking, you or your doctor will need to contact the plan before you can fill your prescription. Your doctor will have to show that there is a medically-necessary reason why you must use that specific drug in order for it to be covered by your plan.
- Step Therapy - Step therapy is a policy that requires you to first try a similar, lower-cost drug that has been proven effective for most people with your condition before you can “step” up to a more expensive drug. If you have already tried a lower-cost drug and it didn’t work, or your doctor believes your condition makes it medically necessary for you to take the more expensive medication, he or she can contact your plan to ask for an exception to this coverage rule.
- Quantity Limits - Plans may limit the amount of drugs they will cover for you over a certain period of time for safety and cost reasons. If you need more, your doctor may need to provide more information about your medical condition to the plan.
If you are a member of a stand-alone prescription drug plan or a Medicare Advantage plan with prescription drug coverage, you have rights and options if your medication is not listed on your plan’s formulary. You will need to work with your doctor to find the option that is best for you.
How much will my medication cost me?
You'll make these payments throughout the year in a Medicare drug plan including deductible and copay or coinsurance. This can vary based on factors such as whether your drug is on the plan formulary, what tier the drug is on, and whether you have met your deductible or have entered the catastrophic phase of coverage.
What's a Tier?
Many Part D prescription drug plans place prescription drugs into different cost-sharing “tiers” or levels. A drug in a lower tier will cost you less than a drug in a higher tier.
Here’s an example of how a plan might divide its drug tiers:
- Tier 1 — Most generic drugs. Tier 1 drugs will cost you the least amount.
- Tier 2 — Preferred brand-name drugs. Tier 2 drugs may cost you more than Tier 1 drugs.
- Tier 3 — Non-preferred brand-name drugs. Tier 3 drugs may cost you more than Tier 1 and Tier 2 drugs.
- Tier 4 — Specialty drugs. Tier 4 drugs are typically unique, very high-cost drugs and are likely to have the highest copayment or coinsurance
If your doctor prescribes a drug on a higher tier rather than a similar drug on a lower tier, you may be able to file an exception and get a lower copayment. You can also ask your doctor or prescriber if there is a generic or less-expensive medication available that could also be effective at treating your condition. You may be able to get a temporary supply if you are new to a Medicare Part D plan that does not have your current medication on it's formulary or if the plan requires a Prior Authorization.
What portion of my drug costs will I be responsible for?
Cost sharing can change throughout the year based on which of the four cost sharing phases you are in.
- Deductible. You will be responsible for 100% of your drug costs until your annual deductible has been met. For 2021 that maximum deductible amount is $445. Some plans may waive your deductible.
- Initial Coverage - After your annual deductible has been met, you will be responsible for copays or coinsurance (a percentage of the cost) until you reach your initial coverage limit. For 2021 initial coverage limit is $4130. Copay and coinsurance amounts can vary for plan to plan. Check with your plan or your agent to learn what your share of the costs will be.
- Coverage Gap - Often called the "donut hole." The donut hole was a coverage phase in which you would be responsible for 100% of your drug costs until you reached the catastrophic coverage phase. The donut hole closed in 2020 and you will now be responsible for 25% of your drug costs until you reach the catastrophic coverage phase. In 2021, that amount is $6550 out of pocket.
- Catastrophic Coverage - Once you’ve paid this out-of-pocket amount, your catastrophic coverage kicks in. After that, you’ll only be responsible for a minimal copayment or coinsurance.
Medicare Part D coverage can work with other insurance. Visit medicare.gov to learn how your Medicare Part D will work with your other insurance.