A pharmacist in a white coat reaching for a medication box on a shelf

Medicare Part D

What Actually Is It?

Part D helps cover the cost of prescription drugs. You can add it on top of Original Medicare, or it may already be included if you have a Medicare Advantage plan. Either way, it's optional, but going without it for too long can lead to a permanent penalty added to your premium later.

How Coverage Works

Every Part D plan has a list of covered drugs, called a formulary. Drugs on that list are typically grouped into tiers, generally, generic drugs cost you the least, brand-name drugs cost more, and specialty drugs (often used for complex conditions) cost the most. Which tier a specific medication falls into depends on the plan you choose, which is why the same prescription can cost very different amounts under different plans.

A pharmacist in a white coat showing a pill bottle to a woman

Enrollment

You can enroll in Part D when you first become eligible for Medicare, or later during the Annual Enrollment Period if your needs change. General Medicare enrollment timing is covered on our main Medicare page, since the same windows apply here.

Since the right Part D plan really comes down to which drugs you take and which plan's formulary covers them best, this is one of the easiest things to get wrong picking blindly, and one of the easiest to get right with a little help.

a person reaching for a pill bottle on a table

What It Costs

Like other parts of Medicare, Part D has its own premium, deductible, and copayments or coinsurance. One thing that catches people off guard is the coverage gap, sometimes called the "donut hole." After you and your plan spend a certain amount together on covered drugs in a year, you may temporarily pay more out of pocket, until you reach a spending threshold that moves you into catastrophic coverage, where your costs drop significantly for the rest of the year.

If affording a Part D plan is a concern, a program called Extra Help may be able to reduce these costs significantly depending on your income and situation.

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