What Is Medicare Part D?

Medicare Part D is optional prescription drug coverage offered by Medicare-approved private insurance companies. It helps pay for brand-name and generic drugs.

Even if you don’t take many prescriptions today, enrolling when you’re first eligible can help you avoid a late-enrollment penalty later.

Two Ways to Get Part D Drug Coverage

1 Stand-Alone Part D Plan (PDP)

A Medicare Prescription Drug Plan (PDP) adds drug coverage to Original Medicare (Part A and/or Part B).

2 Medicare Advantage Plan with Drug Coverage (MA-PD)

Many Medicare Advantage (Part C) plans include prescription drug coverage (Part D) as part of the plan (often called MA-PD).

Important: Not all Medicare Advantage plans include drug coverage, and plan rules/costs vary by plan.

How Part D Works

Each Part D plan has a formulary (drug list)—the medications it covers. Formularies and pharmacy networks vary, so it’s smart to confirm:

• Your medications are covered
• Your pharmacy is in-network
• Any prior authorization or quantity limits that may apply

Costs may include:

• A monthly premium (some plans may be $0)
• A deductible (varies by plan)
• Copays or coinsurance (varies by drug tier and pharmacy)

Who Can Enroll?

• To join a stand-alone Part D (PDP): you must have Part A and/or Part B.
• To enroll in a Medicare Advantage plan with drug coverage (MA-PD): you must have Part A and Part B.
• You must live in the plan’s service area.

Late Enrollment Penalty

You may owe a late enrollment penalty if you go 63 consecutive days or more without Part D or other creditable prescription drug coverage after you’re first eligible.

Medicare generally calculates the penalty as:

• 1% of the national base beneficiary premium
• multiplied by the number of full uncovered months
• rounded to the nearest $0.10 and added to your Part D premium

The national base beneficiary premium can change each year, so penalty amounts can change as well.

Help With Part D Costs

If you have limited income and resources, you may qualify for Extra Help to reduce Part D premiums and prescription costs.