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Medicare Part D:
Prescription drugs.

How to get prescription drug coverage?


Medicare drug coverage helps pay for the prescription drugs you need. Even if you don't take prescription drugs now, you should consider getting Medicare drug coverage. This coverage is optional and is offered to everyone with Medicare coverage. If you decide not to get it when you're first eligible, and you don't have other creditable prescription drug coverage (like employer drug coverage) or you don't get Extra Help, you'll likely pay a  late enrollment penalty  if you join a plan later. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan may vary in cost and the specific medications covered.  

There are 2 ways to get Medicare drug coverage:

  1. Medicare drug plans. These plans add drug coverage to Original Medicare, some Medicare Cost Plans, or Medigap. You must have  Medicare Part A (Hospital Insurance) and/or  Medicare Part B (Medical Insurance) to join a stand-alone Medicare Prescription Drug Plan.

  2. Medicare Advantage Plan (Part C) with drug coverage. You will receive all of your Part A, Part B, and prescription drug coverage through these plans. Remember that you must have Part A and Part B to join a Medicare Advantage Plan, and not all of these plans offer prescription drug coverage.

How to choose a prescription drug plan: Part D?

Drug plans are provided by private insurance companies following the parameters established by Medicare. The plans have a formulary that lists the covered drugs, this must include at least 2 drugs in the most commonly prescribed categories and classes;  these formularies vary with different Part D stand-alone drug plans or as part of a Medicare Advantage plan. Your insurance agent can support you in evaluating the different coverages with the variety of plans. Another option is to access  put your zipcode and then enter your prescription drugs, dosage and amount of monthly use into the system. The system will list the Part D or Medicare Advantage prescription drug plans, according to your selection, from lowest to highest cost. The cost of medications is a factor to consider when choosing a Medicare Plan, but it is of greater or equal importance that the doctors you require are in the plan's network.

Costs you could pay with Medicare Part D

With stand-alone Part D plans, you'll pay a monthly premium and may also pay an annual deductible, copays, and coinsurance. Some plans charge deductibles, others don't, but Medicare sets a maximum deductible amount each year. In 2022, the annual deductible limit for Part D is $480. Copays are generally required each time you fill a prescription for a covered drug. Amounts may vary based on plan formulary tiers as well as the pharmacy you use if the plan has a preferred pharmacy network. Some plans may also set coinsurance rates for certain drugs or tiers. In this case, the plan charges a percentage of the cost each time you fill a prescription.

The coverage stage cycle begins again at the beginning of each plan year,

usually on January 1.

annual deductible

You pay for your drugs until you meet your plan's deductible. In 2022, the annual deductible limit for Part D is $480. If your plan doesn't have a deductible, your coverage begins with the first prescription you fill.

Initial coverage

You pay a copay or coinsurance and your plan pays the rest. You stay in this stage until your total drug costs reach $4,430 in 2022.

Coverage Gap (Donut Hole) 

You pay 25% of the cost for generic and brand name drugs in 2022.
You stay in this stage until your total out-of-pocket costs reach $7,050 in 2022.

catastrophic coverage

You pay a small copay or coinsurance. You stay in this stage for the rest of the plan year.

Total drug costs:  the amount you (or others on your behalf) and your plan pay for your covered prescription drugs. Your plan premium payments are not included in this amount.

Out-of-pocket costs:  the amount you (or others on your behalf) pay for your covered prescription drugs plus the amount of the discount drug manufacturers provide on brand-name drugs when you are in the third coverage stage: the coverage gap ). Your plan premiums are not included in this amount.  


To reduce costs, many plans that offer prescription drug coverage place drugs in different "tiers" on their formularies. Each plan can divide its levels in different ways. Each level has a different cost. In general, a drug on a lower tier will cost you less than a drug on a higher tier.

Here is an example of Medicare drug plan tiers (your plan tiers may be different):

  • Tier 1—Lowest Copay: Most generic prescription drugs.

  • Tier 2—Medium copay: Preferred brand name prescription drugs.

  • Tier 3—highest copay: Non-preferred brand name prescription drugs.

  • Specialty Tier—Highest copay: Very high cost prescription drugs.

  Coverage rules for Medicare drug plans

PA - Prior Authorization

You or your prescriber must contact the plan before you fill certain prescriptions. Your prescriber may need to show that it is medically necessary for the plan to cover a certain drug.

QL Quantity Limits

For safety and cost reasons, plans may limit the amount of prescription drugs they cover during a certain period of time.

ST - Step Therapy

The plan wants you to try one or more lower cost alternative drugs before covering the higher cost drug.

When can I join, switch or drop a plan?

You can join, switch, or drop a Medicare Health Plan or a Medicare Advantage Plan (Part C) with or without drug coverage during these times:

  • Initial Enrollment Period:  You can join a plan when you first become eligible for Medicare.

  • Open Enrollment Period:  You can join, switch or leave a plan between October 15 and December 7 of each year. Your coverage will begin on January 1 (provided the plan receives your request by December 7).

  • Open enrollment period for Medicare Advantage:  Between January 1 and March 31 of each year, if you're enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan or you can switch to Original Medicare (and join a separate Medicare drug plan) once during this time.  

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