Medicare Prescription
Drug Plans / Part D

What Is It

Medicare Prescription Drug Plans, or Medicare Part D plans, help offset the costs of prescription medications. They can be paired with Medicare Parts A and B or included within a Medicare Advantage plan. Each plan has its own formulary, or list of covered drugs, that places drugs in different tiers at different cost levels. Beneficiaries are responsible for paying a monthly premium, yearly deductible, copayments, coinsurance, and any costs in the coverage gap when enrolled in a Prescription Drug Plan.


Anyone enrolled in a Medicare plan who lives in a plan’s service area is eligible to enroll in a Medicare Prescription Drug Plan. However, if you do not sign up for drug coverage when you are first eligible to enroll in Medicare, you could be subject to a late enrollment penalty when you do choose a drug plan.


Prescription drug costs can add up over time. Medicare Prescription Drug Plans help you manage these costs by breaking drugs into different tiers based on coinsurance and copayment amounts. Each plan has its own formulary, or list of covered drugs, that includes both generic and brand-name drugs. Be sure your medications are covered in your plan’s formulary to experience the greatest cost savings.


The best time to enroll in a Medicare Prescription Drug Plan is right when you become eligible for Medicare, during your 7-month Initial Enrollment Period, beginning 3 months before the month you turn 65, including the month you turn 65, and ending 3 months after you turn 65. By enrolling during this time, you can avoid having to pay any late enrollment penalties. You also have the option of changing or disenrolling from a drug plan from October 15 to December 7 of each year, during the Annual Election Period.

Possible Plan Options

Prescription drug coverage is available in two forms: stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug Plan (MAPD). Stand-alone plans can be purchased in conjunction with Medicare Parts A and B while Medicare Advantage Prescription Drug Plans both replace Medicare Parts A and B and provide drug coverage. Private insurance companies offer these forms of drug coverage, so availability and cost may vary.


Because Prescription Drug Plans are offered through private insurance companies, the out-of-pocket costs associated with each may vary by plan and provider. Some of the costs you may expect include a monthly plan premium, yearly deductible, coinsurance, copayments, and any costs accrued in the coverage gap, also known as the “donut hole.”

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