Medicare Part D is optional prescription drug coverage. It may help pay for many medications you pick up at a pharmacy or receive through the mail. For people new to Medicare, Part D can feel confusing because every drug plan has its own list of covered medicines, pharmacies, rules, and costs.
Understanding the basics before you enroll can help you choose coverage that fits your current prescriptions. It can also help you prepare for changes that may happen during the year.
What is Medicare Part D?
Medicare Part D is prescription drug coverage offered by private insurance companies that contract with Medicare. You can generally get Part D in one of two ways.
- A stand-alone Part D plan: This works alongside Original Medicare and, in many cases, a Medicare Supplement plan.
- A Medicare Advantage plan with drug coverage: Many Medicare Advantage plans include prescription drug coverage as part of one plan.
Original Medicare, which includes Part A and Part B, generally does not cover most prescription drugs you take at home. Part A may cover medicines you receive as part of an inpatient hospital stay. Part B may cover certain drugs given in a doctor’s office, outpatient setting, or clinic. But routine prescriptions from a pharmacy are usually handled through Part D.
What types of drugs does Medicare Part D cover?
Part D plans must cover a broad range of prescription drugs. Medicare requires plans to cover medications in several protected classes, including many drugs used for cancer treatment, HIV treatment, depression, seizures, and immune system conditions.
However, no Part D plan covers every prescription drug available. Each plan creates its own covered drug list, called a formulary. A formulary is simply the plan’s list of medicines it agrees to cover.
Most formularies include drugs used for common health conditions, such as:
- High blood pressure
- High cholesterol
- Diabetes
- Heart disease
- Asthma and chronic lung conditions
- Thyroid conditions
- Arthritis and pain management
- Depression and anxiety
Coverage can vary by plan, carrier, and state. Even if two plans have similar names or monthly premiums, they may cover your medicines differently.
What is a Part D drug formulary?
A formulary is one of the most important things to review when choosing a Part D plan. It tells you whether a specific drug is covered and what rules may apply.
Plans can update their formularies during the year in certain situations. If a plan makes a change that affects a drug you take, it generally must notify you. Still, it is wise to review your drug coverage each year during Medicare’s Annual Enrollment Period.
When looking at a formulary, check the exact drug name, dosage, and form. For example, a plan may cover a tablet but not a liquid version of the same medicine. It may cover a generic drug but not the brand-name version.
How do Medicare Part D drug tiers work?
Part D plans usually place covered drugs into tiers. A tier is a pricing level. Drugs on lower tiers often have lower out-of-pocket costs than drugs on higher tiers.
While plans vary, tiers often look something like this:
- Lower tiers: Preferred generic drugs and other lower-cost generics
- Middle tiers: Generic or preferred brand-name drugs
- Higher tiers: Non-preferred brand-name drugs and specialty medications
A specialty drug is often a medication used for a complex or long-term health condition. These drugs may have higher costs and may come with additional plan rules.
Your cost may be a copayment, which is a set amount, or coinsurance, which is a percentage of the drug’s cost. The amount you pay can depend on the drug tier, the pharmacy you use, and the stage of coverage you are in.
What Part D rules may apply to your prescriptions?
A drug being on the formulary does not always mean you can fill it without any extra steps. Part D plans may use rules to help manage costs and support safe use of medications.
- Prior authorization: Your doctor may need to show the plan why a drug is medically appropriate before the plan covers it.
- Step therapy: The plan may ask you to try a lower-cost covered drug first before covering another option.
- Quantity limits: The plan may limit how much of a drug it will cover at one time.
These rules can be frustrating, especially when you need a medication quickly. If a plan denies coverage, you and your doctor may be able to request an exception or appeal the decision.
Does Medicare Part D cover vaccines and insulin?
Part D generally covers many vaccines that are not covered under Part B. This can include common adult vaccines, depending on the vaccine and your situation. Medicare rules may limit what you pay for recommended vaccines covered by Part D, but it is still helpful to confirm coverage with your plan and pharmacy.
Part D also covers insulin that you use with a pump not covered by Part B, as well as many other diabetes medications and supplies. Coverage details can depend on the type of insulin, the delivery method, and the specific plan.
How do pharmacies affect your Part D costs?
Most Part D plans have a network of pharmacies. A network pharmacy has agreed to work with the plan. Some plans also have preferred pharmacies, where you may pay less for certain medications.
Before enrolling, consider checking whether your regular pharmacy is in the plan’s network. If it is not, you may still be able to use it, but your costs could be higher. Mail-order pharmacies may also be an option for medicines you take regularly.
What does Medicare Part D not usually cover?
Part D generally does not cover every type of medication or health product. Some drugs may be covered under Part A or Part B instead, depending on where and how you receive them.
Part D also generally does not cover over-the-counter medicines, vitamins, supplements, cosmetic medications, or drugs used for certain non-medical purposes. There can be exceptions, so it is always worth checking your plan materials if you are unsure.
How can you choose a Part D plan that covers your medications?
The best Part D plan is often not simply the one with the lowest monthly premium. A plan with a lower premium may have higher drug costs, a different pharmacy network, or less favorable coverage for the prescriptions you take.
Make a list of every prescription you take, including the dosage and how often you refill it. Then compare plans based on the total picture: the monthly premium, deductible, drug tier, pharmacy options, and estimated costs for your specific medications.
Drug needs can change from year to year, and plans can change their formularies, premiums, and pharmacy networks. Reviewing your Part D coverage annually may help you avoid surprises. If you would like free, no-pressure help comparing Medicare prescription drug coverage with your Medicare Supplement options, reach out to Eric. With 25 years of experience, he can help you understand the choices available in your state.