About Medicare Part D

Prescription drugs are an important consideration when making decisions about your medical coverage. Medicare Part D plans provide prescription drug coverage to beneficiaries who elect to enroll in a prescription drug plan. Anyone who has Part A and Part B and lives in a plan's service area is eligible to enroll. People with Medicare (who do not already have prescription drug coverage through an employer or union, TRICARE for Life, Cobra or other means) can obtain prescription drug coverage by either:

  • Joining a standalone Part D Prescription Drug Plan
  • Joining a Medicare Advantage plan that includes Part D prescription drug coverage. Costs can be different for each plan, but all Medicare drug plans must provide at least the standard level of coverage set by Medicare.

Formularies

Each Medicare Prescription Drug Plan has a formulary. Even if a drug is on the plan's formulary, there may be special rules for filling the prescription such as limiting the quantity of a drug that a plan covers over a certain period of time for safety and cost reasons. Prior authorization from the plan may be required before a prescription will be covered to ensure drugs are used correctly and only when medically necessary. Drugs may also have different cost-sharing levels, sometimes called tiers.

Late Enrollment Penalty

Beneficiaries who don't enroll in a Medicare Prescription Drug Plan when they are first eligible may have to pay a late enrollment penalty to enroll in a plan later is they don't maintain creditable coverage. most people who wait until after the end of their Initial Enrollment Period (IEP) to join a plan will have their premiums go up 1% for every month they waited to enroll. These individuals usually have to pay this penalty as long as they have Medicare prescription drug coverage.

What Part D covers

  • Part D is voluntary and is designed to supplement Part A and Part B coverage
  • All drugs mandated by Medicare

What Part D Doesn't Cover

  • Drugs not on the Medicare formulary
  • Certain drugs that are covered under Part B

Limitations

  • Coverage may vary by plan and plan type. It's important to review options carefully.

Page Last Updated: June 3, 2011