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medicare part d
medicare part d
medicare part d
medicare part d

What Is Medicare Part D? What It Costs and Covers


You qualify for prescription drug coverage if you are a Medicare recipient. A portion of the cost of your medicine is covered by this insurance. If you have Original Medicare, you are eligible to sign up for a Medicare Part D plan. Alternatively, you can enroll in a Medicare Advantage plan that covers prescription drugs.

Drug insurance might not seem necessary if you don’t currently use any expensive prescriptions. However, it’s a good idea to sign up for at least a cheap medication plan as soon as you sign up for Medicare. If you wait, you might eventually need to get coverage to assist with the high annual expense of expensive medications. 1 There are severe financial penalties. 2 Learn more about this decision, one of many you’ll make when applying for Medicare, and how to approach it.

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Two Ways to Get Medicare Drug Coverage 

If you decide on Original Medicare, a stand-alone Medicare Part D prescription medication coverage can be purchased from a commercial insurance provider. As an illustration, nearly 56 percent of Medicare Part D enrollees are insured by UnitedHealth Group, Humana, and CVS Health collectively. 50% of Part D members in 2021 choose a stand-alone plan. 3

Medications and Medicare Advantage Plan

Prescription drug insurance is typically included with Medicare Advantage (Medicare Part C) plans. Medicare Advantage prescription medication plans were chosen by 50% of Part D subscribers (MA-PD plans). 4 Among the numerous insurance providers that provide Medicare Advantage plans with prescription medication coverage are Aetna, Humana, and Blue Cross, Blue Shield.

What Does Medicare Drug Insurance Cover?

The types of medications covered by each policy and the copayment amounts vary. However, even the most affordable prescription drug plans are required to cover the majority of the generic and brand-name medications as well as the insulin preparations that Medicare beneficiaries typically require. Additionally, it must include all or the majority of the following classes of drugs:

  • chemotherapy medications (unless covered by Medicare Part B),
  • Antidepressants,
  • Antipsychotic medications,
  • Anticonvulsive treatments for seizure disorders,
  • HIV/AIDS treatments,
  • Immunosuppressant medications5

Vaccinations that are not covered by Medicare Part B, such as shingles vaccinations, must also be covered by Part D coverage. (Medicare Part B covers the annual flu shot, pneumococcal vaccine, and COVID-19 vaccine.) The Medicare Part D insulin savings program will start offering insulin in 2022 for a copayment of up to $35.

What is excluded from Medicare drug coverage?

Drugs for the following conditions are typically not covered by Part D plans:

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  • anorexia, weight loss, or weight gain
  • cough and colds symptomatic relief
  • cosmetic purposes
  • fertility drugs
  • hair growth
  • over-the-counter drugs
  • sexual or erectile dysfunction
  • vitamins and minerals, except for prenatal vitamins, niacin (when used to treat a condition), and fluoride

Some of the medications on the list above may be covered by plans with “enhanced alternative coverage.” 6

Limitations on Coverage

To confirm that your prescriptions are covered and learn more about your out-of-pocket expenses, it’s critical to review the plan’s formulary, or list of approved medications (deductible, coinsurance, copays). Prescription drug plans have varying restrictions limiting coverage for prescriptions depending on price, whether they are standalone or a component of a Medicare Advantage plan.

For instance, a generic drug might be categorized as Tier 2 and only cost you a small amount of money out of pocket. However, Tier 3-5 specialist and name-brand medications may be significantly more expensive. Additionally, the plan may demand that you first try a less expensive medication or obtain prior authorization for prescriptions. 7

Who Is Eligible for Medicare Part D?

Part D prescription coverage is available to anyone 65 and older who are eligible for or are currently enrolled in Medicare. People who have been diagnosed with end-stage renal disease and those who have been receiving Social Security Disability Insurance (SSDI) benefits for more than 24 months are also eligible. 8

What Does Medicare Part D cost?


The cost of your monthly premiums varies from plan to plan and is based on your income. Higher-income earners will have to pay more. Couples making over $182,000 and single filers making over $91,000 will pay more in 2022. Your rate may increase by adjustments ranging from $12.40 to $77.90 each month. 9


The amount you must spend before the insurance plan begins to contribute is known as a deductible. There are prescription plans without deductibles. The maximum deductible that may be used in 2022 is $480.10.


Depending on the drug plan, you might have to pay copayments (a fixed sum for each tier of prescriptions) or coinsurance (a percentage of the drug’s cost). 11

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What Is the Coverage Gap or Donut Hole?

You pay the cost-sharing specified in your coverage in 2022 up until your total drug expenditures reach $4,430.

You enter the coverage gap, also called the donut hole, once you’ve spent $4,430 (an increase from $4,130 in 2021).

After that, you pay 25% of the costs for both brand-name and generic medications up to a maximum of $7,050 in out-of-pocket Part D expenses.

Once the catastrophic limit is reached, beneficiaries are responsible for paying the greater of 5% or $3.95 for generic prescriptions and $9.85 for brand-name drugs for the remainder of the calendar year.

What Is Extra Help and Who Is Eligible?

Through Medicare’s Extra Help program, you might be qualified for cheaper premiums, deductibles, and coinsurance. Participants will pay $3.95 for each generic drug and $9.85 for each brand-name drug in 2022.

If your income in 2022 is up to $19,320 for a person and $26,130 for a couple and you have a finite amount of assets, such as savings, stocks, and bonds, you might be eligible. You can apply for Extra Help at any time, regardless of changes to your resources or income. 13

When Can You Enroll in Medicare Part D?

Initial Enrollment Period

You can join a Medicare Advantage plan with medication coverage or add a stand-alone Part D drug plan when you turn 65 and become newly eligible for Medicare. You can go from a Medicare Advantage plan to Original Medicare and buy a stand-alone medication coverage within the first 12 months of initial enrollment. When initially eligible, those with Medicare eligibility under 65 can enroll in Part D prescription medication coverage.

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Annual Election Periods

You can modify your prescription medication coverage throughout the Annual Open Enrollment Period, which runs from October 15 to December 7 each year. Your new policy will take effect on January 1st. You can also change Medicare Advantage plans or go back to Original Medicare during this time.

You can transfer Medicare Advantage plans (with or without drug coverage) during the Medicare Advantage Open Enrollment Period, which runs from January 1 through March 31, or you can move to Original Medicare and enroll in a Part D prescription drug plan.

Special Enrollment Period

Moving to a new address, entering or exiting a facility (such as a skilled nursing facility or prison), and other unique scenarios are examples of life events that may qualify for a special enrollment period for changing Medicare Advantage and Medicare prescription medication coverage. 14

Find a Medicare Drug Plan in Your Area

For a list of stand-alone Part D plans and Medicare Advantage plans with medication coverage offered in your ZIP code, use the online Medicare Plan Finder tool. 15 The comparison tool lists the medications covered by each plan, the cost-sharing percentages, if prior authorization is required, and the preferred pharmacies.

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Choose the Right Prescription Drug Plan for You

Here are some suggestions for choosing a plan that fits your needs, tastes, and budget. 16

Verify the costs. Although the monthly premium is crucial, you should also take cost-sharing factors like deductibles, coinsurance, and copays into account. A low premium could end up costing you more over time.

If you want “one-stop shopping” and are willing to select a plan that restricts you to a network of doctors, a Medicare Advantage plan (Part C) with prescription drug coverage can result in lower premium expenses for you.

You might wish to choose a low-premium plan if you don’t take any or very little medicine. The majority of prescription medications required by Medicare recipients will still be covered.

Check the availability and price of specific long-term drugs under different plans if you take them. If the medications you use are generics, check for insurance policies that cover them for little to nothing.

If you anticipate having high prescription costs, it can be wise to opt for a plan that offers additional coverage if your spending levels are high.

When choosing a plan, make sure to verify if it has a convenient recommended pharmacy because you can frequently receive additional discounts on prescription medications there.


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