Medicare Part D Prescription Drug plans

Prescription Drug Coverage

Beginning in 2006, insurance coverage for prescription medications was made available for people with Medicare. Medicare Part D Prescription Drug plans often require you to pay for some of your prescription drugs before the plan begins to pay. Generic medications typically are more affordable as compared to name brand medications. Each Part D plan features a Formulary – a listing of all prescription medications that are covered by the plan. Prescription Drug plans are run by private insurance companies that follow rules set by Medicare.

Key Facts

  • Available to anyone who is enrolled in Medicare (Part A or Part B or Parts A & B)
  • Provided by private insurance companies contracted with Medicare.
  • You are only allowed to have one Prescription Drug plan at a time.
  • You must live in the service area of the Part D plan you want to join.
  • If you don’t enroll when you are first eligible you will pay a penalty of 1% for every month that you did not enroll.
  • You can get “Extra Help” which is a low-income subsidy (LIS) Medicare program that helps people with limited income and resources pay for Medicare prescription drug costs.

Important Restrictions and Limitations

  • Prior Authorization: The plan you enroll in may require prior authorization for certain medications. Your prescriber may need to show that the prescription drug is medically necessary for the plan to cover it.
  • Formulary: Each Medicare Part D Prescription Drug plan has its own list of covered medications. The list of prescription drugs covered by your plan can add or remove medications it covers every year. Prescription drugs are placed in different “tiers” representing different costs.
    • Tier 1 – preferred generic
    • Tier 2 – non-preferred generic
    • Tier 3 – preferred brand name
    • Tier 4 – non-preferred brand name
    • Tier 5 – Specialty tier
  • Quantity Limits: The plan you enroll in only covers a specific amount and type of prescription drug over a specific timeframe.
  • Step Therapy: Your Prescription Drug plan may require you first try certain prescription drugs that have been proven for most people with your condition before you can move up a “step” to a more expensive prescription drug. If you have already tried a similar medication and they didn’t work, your prescriber can contact the plan to ask for an exception. If approved your plan will cover the step-therapy prescription drug.
  • Safety Checks: Prior to filling your prescriptions, your Part D plan works with pharmacies to perform additional safety checks, like checking for prescription drug interactions, incorrect dosages, and unsafe amounts of certain medications (like opioids and benzodiazepines).
  • Prescription Drug Management Programs: Some Medicare Part D plans have a program in place to help you use these opioids and benzodiazepines safely. If you get opioids from multiple doctors or pharmacies, your plan will contact the doctors who prescribed these medications to make sure they are medically necessary and that you’re using them appropriately.

How Medicare Part D Prescription Drug Coverage Works

Medicare Part D Prescription Drug plan costs will vary depending on:

  • Your prescriptions and whether they’re on your plan’s formulary (list of covered prescription drugs) and depending on what “tier” the prescription drug is in.
  • Which phase of your prescription drug benefit that you’re in (some examples include whether or not you met your deductible, if you’re in the catastrophic coverage phase, etc.).
  • The plan you choose. Remember, plan coverage and costs can change each year.
  • Which pharmacy you use.
  • Whether or not you get Extra Help paying your Medicare Part D costs.

Comparing Medicare Part D Prescription Drug Plan Options

There are 2 ways to get Part D drug coverage:

1. Stand-alone Medicare Part D Prescription Drug plans. These plans (sometimes called “PDPs”) add prescription drug coverage to Original Medicare, Medicare Supplement, some Medicare Cost plans, some Medicare Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Account (MSA) plans. You must have Medicare Part A and/or Medicare Part B to join a Prescription Drug plan.

2. Medicare Advantage plans or other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Medicare Part A, Medicare Part B, and prescription drug coverage (Medicare Part D), through these plans. Medicare Advantage plans with prescription drug coverage are sometimes called “MA-PDs” (Medicare Advantage Prescription Drug plans). Remember, you must have Medicare Part A and Medicare Part B to join a Medicare Advantage plan, and not all of these plans offer prescription drug coverage.

When can I join, switch, or drop a Medicare Part D Prescription Drug plan?

  • When you first become eligible for Medicare, you can join during your Initial Enrollment Period.
  • If you get Medicare Part A and Medicare Part B for the first time during the General Enrollment Period, you can also join a Prescription Drug plan from April 1– June 30. Your coverage will start on July 1.
  • You can join, switch, or drop a Part D plan during the Annual Enrollment Period between October 15– December 7 each year. Your changes will take effect on January 1 of the following year, as long as the plan receives your request before December 7.
  • If you’re enrolled in a Medicare Advantage plan, you can join, switch, or drop a MA-PD (Medicare Advantage Prescription Drug)
    plan during the Medicare Advantage Open Enrollment Period, between January 1–March 31 each year.
  • If you qualify for a Special Enrollment Period. Special Enrollment Periods are times when you can join, switch, or drop your Prescription Drug coverage if you meet certain requirements. Generally, you must stay enrolled in your Medicare Part D plan for the entire year, but you may be able to change your coverage mid-year if you qualify for a Special Enrollment Period when certain events happen in your life. Check with your plan insurance company for more information.
  • Read more about Important Dates here.

For Help Enrolling and Comparing existing Prescription Drug plans in your service area, call us at the Medicare Comparison helpline (866-391-7763, TTY 711 M-F 9am-5pm) to speak to a licensed insurance agent who is specially trained to help you understand your prescription drug coverage options, or request assistance here:

Tips for Comparing Plans

It is most important to verify that your current medications are included in the plan’s Formulary before applying for coverage. Here are more tips when evaluating Prescription Drug plans plans:

  • Make a list of all your prescription drugs to including: the Name of the medication, the Dosage, and the Frequency of use. This information is necessary when comparing Prescription Drug plans. When making your list of medications don’t forget creams, ointments, eye drops, and nasal sprays that are prescribed by your physician.
  • Review the formulary for your chosen Part D plan. If you do not see a specific name brand medication included, you will be required to purchase the medication on your own. Name brand medications can be very expensive, so be careful.
  • Look at the different “Tiers” featured by the plan. Remember that most prescription drugs may be a 30-day supply so you will need to multiply the cost by 12 in order to determine the annual expense for your prescription.
  • You should also confirm your preferred pharmacy is contracted with any Prescription Drug plans of interest.
  • If you are taking a name brand medication and a generic equivalent is available, check with your physician to see if changing to the generic is advisable. If so, it may be more affordable over the course of a year.
  • If you are considering the benefits of joining a Medicare Advantage plan, keep in mind that many Medicare Advantage plans require you to join their Prescription Drug plan (this applies to Medicare Advantage HMOs, PPOs, and Special Needs Plans). However, this requirement does not apply to Medicare Supplement insurance plan. If you want prescription drug coverage, you can purchase a stand-alone Medicare Part D plan separately.
  • Not sure if your prescription drugs are covered? The Medicare website’s plan finder ( has an extremely useful tool where you can enter your prescription drug information and compare Part D plans available in your area.
  • Or you can always contact the Medicare Insurance Helpline and we’ll walk you through all of this:

What’s the Medicare Part D Prescription Drug plan late enrollment penalty?

The late enrollment penalty is an amount that’s permanently added to your Prescription Drug 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 Prescription Drug plan or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Part D coverage. Note: If you get Extra Help, you don’t pay a late enrollment penalty.

3 ways to avoid paying a penalty:

  1. Join a Prescription Drug plan when you’re first eligible. Even if you don’t take prescriptions now, you should consider joining a Medicare Part D plan or a Medicare Advantage plan that offers prescription drug coverage to avoid a penalty. You may be able to find a plan that meets your needs and budget.
  2. Enroll in a Prescription Drug plan if you lose other creditable coverage. Creditable prescription drug coverage could include prescription drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or individual health insurance coverage. Your plan must tell you each year if your prescription drug coverage is creditable coverage. If you go 63 days or more in a row without a Prescription Drug plan or other creditable prescription drug coverage, you may have to pay a penalty if you join later.
  3. Keep records showing when you had creditable prescription drug coverage and tell your plan if they ask about it. If you don’t tell the plan about your creditable prescription drug coverage, you may have to pay a penalty for as long as you have Prescription Drug coverage.

How much more will I pay?

The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($34.70 in 2024) by the number of full, uncovered months that you were eligible but didn’t join a Prescription Drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the “national base beneficiary premium” may increase each year, the penalty amount may also increase each year. After you join a Prescription Drug plan, the plan will tell you if you owe a penalty and what your premium will be.

For Example: If you are without creditable prescription drug coverage for 24 months, your penalty would be 24% (1% for each of the 24 months) of $34.70 (the national base beneficiary premium for 2024), which is $10.06. Rounded to the nearest $0.10, the late enrollment penalty will be $10.10 in addition to your plan’s monthly premium in 2024. You’ll continue to pay a penalty for as long as you have Prescription Drug coverage, and the amount may go up each year (read more here: