Medicare Part D is coverage for prescription drugs that you obtain from a retail pharmacy. This voluntary program allows you to access medications at a more affordable rate. It also provides insurance against catastrophic drug costs.
You do not enroll in Medicare Part D via Social Security. Instead, you will choose a Medicare Part D plan offered by a private insurance company. Your Medicare drug coverage helps pay for prescription drugs you need. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan can vary in cost and accessibility to specific drugs covered.
Those who don’t sign up receive a 1% national average Part D premium cost added to their monthly premium payments permanently. This is added for each month the person is not enrolled in a part D plan.
Say the 1% national average was $0.33. If you wait a year to sign up that is 12 x $0.33 = $3.96. So when you sign up you would then have a permanent fine of $3.96 per month added to your part D premiums on top of the plan’s premium.
- Medicare drug plans.
- These plans add drug coverage to Original Medicare.
- You must have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) to join a separate Medicare drug plan.
or other with drug coverage.
- You get all of your Part A, Part B, and drug coverage, through these plans.
- Remember, you must have Part A and Part B to join a Medicare Advantage Plan, and not all of these plans offer drug coverage.
How much is Medicare Part D?
Most Part D drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you’re in a Medicare Advantage Plan (Part C) or Medicare Cost Plan with drug coverage, the monthly premium may include an amount for drug coverage.
In 2022, there are many Medicare Part D plans to choose from in each state – sometimes 20 or more. Plans range from as low as $7 in some states to over $200+. Every insurance company sets its own formulary (list) of medications that are covered by the plan. Therefore, they can determine what monthly premium they will charge for the plan each year.
Most people only pay their Part D premium. If you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty.
If you have a higher income, you might pay more for your Medicare drug coverage. If your income is above a certain limit, you’ll pay an extra amount in addition to your plan premium (sometimes called “Part D-IRMAA”). You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage. This doesn’t affect everyone, so most people won’t have to pay an extra amount.
Yearly deductible for drug plans
This is the amount you must pay each year for your prescriptions before your Medicare drug plan pays its share.
Deductibles vary between Medicare drug plans. No Medicare drug plan may have a deductible more than $480 in 2022. Some Medicare drug plans don’t have a deductible.
In general, the drug plans that charge the deductible up front will have lower monthly premiums and lower drug copays. Some companies waive the deductible, but then you will see that the premiums and copays are usually higher than plans that charge the deductible.
Copayment/coinsurance in drug plans
These are the amounts you pay for your covered drugs after the deductible (if the plan has one). You pay your share and your plan pays its share for covered drugs. If you pay coinsurance, these amounts may vary throughout the year due to changes in the drug’s total cost. The amount you pay will also depend on the tiers level assigned to your drug.
Your plan may raise the copayment or coinsurance you pay for a particular drug when the manufacturer raises their price, or when a plan starts to offer a generic form of a drug, but you keep taking the brand name drug.
Once you and your plan spend $4,430 combined on drugs (including deductible) in 2022, you’ll pay no more than 25% of the cost for prescription drugs until your out-of-pocket spending is $7,050 in 2022 under the standard drug benefit.
Watch below for how drug costs can differ by pharmacy.
I take specific drugs.
Look at drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.
I want extra protection from high price prescription drug costs.
Look at drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.
I want my drug expenses to be balanced throughout the year.
Look at drug plans with no or a low deductible, or with additional coverage in the coverage gap.
I take a lot of generic prescriptions.
Look at Medicare drug plans with “ tiers” that charge you nothing or low copayments for generic prescriptions.
I don't have many drug costs now, but I want coverage for peace of mind and to avoid future penalties.
Look at Medicare drug plans with a low monthly premium for drug coverage. If you need prescription drugs in the future, all plans still must cover most drugs used by people with Medicare.
I like the extra benefits and lower costs available by getting my health care and prescription drug coverage from one plan, and I’m willing to pick a drug plan with restrictions on what doctors, hospitals, and other health care providers I can use.
Look for a Medicare Advantage Plan (Part C) with prescription drug coverage.
Still Have Questions about Prescription Coverage?
How Do I Enroll in Part D?
You must enroll in a Medicare Part D plan in the service area where you live. You can enroll in Part D directly with a Medicare Part D insurance provider or through a certified Unitus Medicare Advisor. Be sure that your plan covers the medications you need. You can only be enrolled in one Part D plan at a time. You cannot be enrolled in both Medicare Advantage and Part D at the same time.
When Am I Eligible?
You are eligible to enroll in Part D when you first get Medicare. This Initial Enrollment Period (IEP) lasts seven months. It includes the three months before you turn 65, your birth month, and the three months following. A similar window exists for people who first become eligible for Medicare due to disability.
Medicare Part D also has an annual election period which runs from October 15 – December 7.
Does This Work with VA 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 Medicare drug plan, but if you do, you can’t use both types of coverage for the same drug at the same time. For more information, contact the VA.
What are Formularies and Tiers?
A plan’s list of covered drugs is called a “formulary,” and each plan has its own formulary. Many plans place drugs into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost. For example, a drug in a lower tier will generally cost you less than a drug in a higher tier.
We'll Find the Right Plan for You
When it comes to Medicare, you have choices. Let’s talk today about the benefits you deserve and the medicines and doctors you need.
Medicare 101 Guide
Education center
Medicare Checklist
Free guide
Referral Flyer
Save & Share Unitus Medicare