Medicare Part D is designed to help you afford the prescription medications you need — and it can make a big difference in managing your healthcare costs. Understanding the rules, regulations, and coverage details of Part D can help you take advantage of your plan as much as possible.
Here’s what you need to know about how Medicare Part D works and how you can make the most of your coverage.
How does Medicare Part D work?
Medicare Part D plans are typically provided by private companies that are contracted by the federal government. Similar to other insurance plans, you’ll pay premiums, deductibles, and other out-of-pocket costs.
Who can enroll in Medicare Part D?
If you’re eligible for Medicare, you should be eligible for Part D. To get Medicare Part D, you must already have Medicare Part A and/or Part B, live in the service area of the plan you choose, and be a United States citizen. You can enroll in prescription drug coverage when you first become eligible for Medicare — which is usually when you turn 65 years old — or during the Annual Enrollment Period, which runs from October 15th to December 7th.
If you delay enrolling and don’t have other creditable drug coverage, you could face a late enrollment penalty — an added cost that sticks with you as long as you have Part D.
How much does Medicare Part D cost?
Since Part D plans aren’t one-size-fits-all, Part D costs aren’t either. Still, you can expect some common expenses, like:
- Premiums: A monthly fee for your plan that varies based on the plan you select and your income.
- Deductibles: The amount you pay out of pocket before your plan kicks in.
- Copayments and coinsurance: Once your coverage starts, you’ll pay this share of prescription costs.
Due to the Inflation Reduction Act, there’s a $2,000 out-of-pocket cap on covered medications. That means once you reach $2,000, you won’t have to pay out-of-pocket for covered drugs for the rest of the calendar year.
If your income is limited, you might qualify for Medicare’s Extra Help program, which can assist with Part D costs.
Understanding formularies and tiers
When you’re picking a Medicare Part D plan, one key piece of information to review is the list of drugs your plan covers, known as the formulary. Medications on the formulary are grouped into tiers — the lower the tier, the lower the price. Your out-of-pocket costs for Medicare Part D depend on the tier of your prescribed medication.
Making the most of your Medicare Part D plan
Once you have a plan, your Medicare Part D card is the key to cashing in on savings — be sure to always bring it with you when you fill prescriptions, along with your Medicare card and photo ID. If you ever lose your Medicare Part D card, you can contact your plan to request a replacement as soon as possible. Many plans also offer digital versions of their cards through an online account or app.
If you need to fill a prescription before you receive your Part D card, bring along the acknowledgment, confirmation, or welcome letter you got from the plan, an enrollment confirmation number and the plan name/phone number, or a copy of your official Medicare card. If you can’t find any of these things, your pharmacist might still be able to get your Part D information by using the last four digits of your Social Security number or your full Medicare number, but there’s no guarantee.
Understanding Part D coverage rules
Medicare Part D covers pharmacy visits for a wide range of medications, but prescription drug plans have rules to ensure those medications are used safely and cost-effectively. Some of these rules include:
- Medication safety checks: Plans may flag potential drug interactions or unsafe doses.
- Step therapy: You may be required to try a less expensive medicine before moving to a costlier alternative.
- Quantity limits: Some medications have limits on how much you can receive at once.
If these rules affect your prescriptions, you can talk to your doctor. They may be able to request an exception or make an adjustment to your treatments.
Medicare Part D preferred pharmacies
Most Medicare Part D plans work with a network of pharmacies. Within this network, some pharmacies are designated as preferred pharmacies and offer lower copays and coinsurance for covered medications. You can check your plan’s pharmacy directory online to find locations near you. Sometimes, it’s worth it to travel a little further to shop at one of your Part D preferred pharmacies.
If you take medications regularly, you may be able to save time and money through a mail-order pharmacy. Many Medicare Part D plans offer mail-order pharmacy options, which let you get a 90-day supply of your medications delivered to your door. You can contact your Part D provider or pharmacy to learn more about getting your prescriptions delivered.
Ways to save more with Part D
Medicare Part D is designed to help lower the cost of your prescriptions, but there are additional ways you can stretch your dollar even further.
- Prescription discount programs. Many pharmacies like Walgreens, CVS, and GoodRx offer prescription discount programs that can make medications more affordable.
- Medicare’s Drug Price Negotiation Program. Medicare has negotiated lower prices for some of the most commonly used and costly medications, reducing out-of-pocket costs for beneficiaries.
- Medicare’s Prescription Payment Plan. If your out-of-pocket medication costs are high, Medicare allows you to spread certain payments over time through its Medicare Prescription Payment Plan.
Common questions about Medicare Part D
Understanding prescription drug coverage can feel confusing, and you might still have some Part D questions — here are answers to a few of the most frequently asked ones.
How does the deductible work on Medicare Part D?
The deductible is the amount you must pay out-of-pocket for your medications before your Part D plan starts to kick in. The maximum annual deductible amount may change each year. In 2024, it was $545, and in 2025, it’s $590. Some plans may have no deductible, while others might charge the entire amount.
If you have a plan with a deductible, you’ll pay the full cost for your medication until you hit that amount. After that, your plan will help cover costs. If you take medication regularly, it might help to look for a plan with a low deductible or none at all.
What if my medication isn’t covered by my plan?
If your prescription isn’t covered by your plan, you have a few options. First, you can ask for an exception by talking to your doctor. They can request coverage for prescriptions that are deemed medically necessary. You can also ask your doctor about alternative medications that are similar and covered by your plan.
If no alternative is available, you can pay the full cost and use prescription discount programs or coupons to reduce costs. If you requested an exception and it was denied, you can file an appeal to challenge the decision.
How does Medicare Part D work with other insurance?
If you have drug coverage through an employer, government program, or other provider, Part D can coordinate and act as the primary or secondary payer — but it depends on the type of coverage you have. Medicare.gov offers a tool that can help you check who pays first.
If you already have another insurance provider, check with them before enrolling in a Part D plan to ensure your coverage can work together.
Navigate Medicare Part D with confidence
Medicare policies, drug coverage, and cost structures can change from year to year. Staying informed can help you take full advantage of your plan and find opportunities to save. Consider signing up for Medicare updates via https://www.medicare.gov/ to get news about the latest policy changes.
Still confused about how Medicare prescription drug coverage works? A licensed insurance agent can help you navigate updates, identify opportunities to save, and guide you through your plan options with United Medicare Advisors’ E-Shopping tool once enrolled in a Part D plan with us.
*Disclaimer:
The information provided in this blog post is intended for general informational purposes only and does not constitute medical advice. It is not a substitute for professional medical consultation or treatment. Always consult with a qualified healthcare provider for any questions you may have regarding a medical condition.
United Medicare Advisors does not endorse or recommend any specific products, treatments, or procedures mentioned in this article. Reliance on any information provided in this blog post is solely at your own risk. We encourage you to discuss any health concerns or questions with your doctor before making any decisions about your health or treatment.
