What Medicare drug coverage is and how it works

Medicare covers prescription drugs through Part D, a separate insurance plan you choose and pay for each month. Part D is not automatic — you have to enroll, and the plans available to you, what they cost, and which drugs they cover all vary by location and change every year. Most people pay a monthly premium, a yearly deductible, and a copay or coinsurance when they fill a prescription.

Part D is run by private insurance companies under contract with Medicare, not by Medicare itself. This means the plan you pick determines which pharmacies you can use, which drugs are covered, and how much you pay. If you do not enroll in Part D when you first become may be able to access, you may pay a permanent penalty on your premium for as long as you have Medicare.

You can enroll during your initial may be able to access period (usually when you turn 65), during the annual open enrollment period (October 15 to December 7 each year), or if you experience a may have access to life event like loss of other coverage. Outside these windows, you cannot change plans unless you meet specific conditions.

Key Takeaways

  • Part D is optional but enrolling late can cost you permanently, so you need to act during your may be able to access window even if you do not take many drugs now.
  • Every Part D plan has a different list of covered drugs, so the plan that works for your neighbor may not cover your medications at the same price.
  • You can switch plans once a year during open enrollment (October 15 to December 7), and you should review your coverage every year because drug prices and plan formularies change.
  • If a drug is not covered or costs too much, you can request an exception from your plan, ask your doctor to prescribe a covered alternative, or look into patient assistance programs run by drug manufacturers.

How to find and enroll in a Part D plan

Start by going to Medicare.gov and using the Plan Finder tool. You enter your zip code and the drugs you take, and the tool shows you every Part D plan available in your area, ranked by cost. You can see the monthly premium, the yearly deductible, the copay for each drug, and whether your pharmacy is in the plan's network.

You can enroll directly through Medicare.gov, by calling Medicare at 1-800-MEDICARE (1-800-633-4227), or by contacting the insurance company that offers the plan. If you enroll by phone or online, your coverage usually starts the first day of the following month. If you enroll between December 8 and December 31, your coverage starts January 1.

If you are already on Medicare and it is not your first time enrolling, you can change plans only during open enrollment (October 15 to December 7) or if you have a may have access to event. may have access to events include losing other drug coverage, moving to a new state, or becoming may be able to access for Extra Help (a program that pays Part D costs for people with low income).

Understanding the costs: premiums, deductibles, and copays

Every Part D plan charges a monthly premium — the amount you pay to have the plan, whether or not you fill any prescriptions. Premiums vary widely by plan and location; in 2024, they range from roughly $7 to $100 per month, though this changes yearly. Some plans have no premium at all.

Most plans also have a yearly deductible, which is the amount you pay out of pocket before the plan starts to help. Not all plans have a deductible, and those that do may have different deductibles for different drug tiers. Once you meet the deductible, you pay a copay (a flat dollar amount) or coinsurance (a percentage of the drug's cost) for each prescription.

After you and your plan together spend a certain amount on drugs in a year — called the coverage gap threshold — you enter the "donut hole," where you pay a higher percentage of drug costs. This gap exists in all Part D plans but varies in size and cost. Once your total out-of-pocket spending reaches a yearly limit (around $7,000 in 2024, though this changes annually), catastrophic coverage kicks in and you pay only a small copay for the rest of the year.

What happens when your drug is not covered or costs too much

Every Part D plan publishes a formulary — a list of drugs the plan covers. If your drug is not on the formulary, the plan will not pay for it, though you can still buy it yourself at full price. If a drug is on the formulary but costs more than you can afford, you have several options.

You can ask your plan for a formulary exception, which means asking them to cover a drug that is not on their list or to lower your copay. To request an exception, contact your plan and ask your doctor to submit a letter explaining why this specific drug is medically necessary. The plan must respond within 72 hours for urgent requests and 7 calendar days for standard requests.

You can also ask your doctor to prescribe a different drug that is on the formulary and costs less. Many drugs in the same class work similarly, and your doctor may be willing to switch if the alternative is covered. If neither option works, check whether the drug manufacturer offers a patient assistance program — these are free or low-cost programs run by pharmaceutical companies for people who cannot afford their medications. You can search for these programs on the manufacturer's website or through NeedyMeds.org.

Extra Help: coverage for people with low income

Extra Help is a federal program that pays Part D premiums, deductibles, and copays for people whose income and resources fall below certain limits. In 2024, you may be may be able to access if your monthly income is below roughly $2,200 (for an individual) or $2,970 (for a couple), though these amounts change yearly and vary by state. Your resources — savings, investments, and property other than your home — must be below roughly $8,100 (individual) or $12,150 (couple).

To apply for Extra Help, go to SSA.gov, call Social Security at 1-800-772-1213, or visit your local Social Security office. You can also apply through your state Medicaid office. If you are approved, Extra Help covers most or all of your Part D costs, depending on your income. You do not have to reapply every year — Social Security will tell you if your circumstances change and you are no longer may be able to access.

If you think you might may have access to, apply even if you are not sure. The worst that happens is Social Security says no. If you are already enrolled in a Part D plan and later become may be able to access for Extra Help, you can switch plans at any time, not just during open enrollment.

Reviewing and changing your coverage each year

Drug prices change, formularies change, and new drugs become available. A plan that was the cheapest option last year may not be this year. Medicare recommends reviewing your coverage every October, before open enrollment starts on October 15.

Use the Plan Finder tool again and enter your current drugs and pharmacy. Look at the total estimated cost for the year — premium plus deductible plus copays — not just the premium. If a different plan would cost less or cover your drugs better, you can switch during open enrollment. Your new coverage starts January 1.

If you are happy with your current plan, you do not have to do anything. Your coverage continues into the next year. But if your plan sends you a notice that a drug you take is no longer covered or that your copay is increasing, read it carefully. You may have the right to request an exception or to switch plans outside the normal enrollment window.

What to do if you cannot afford your medications

If your copay is too high even with Part D coverage, start by talking to your doctor or pharmacist. They may know of a cheaper alternative drug, a generic version, or a way to get the medication in a larger quantity at a lower per-dose cost. Some pharmacies also offer discount programs — ask whether yours does.

Check whether the drug manufacturer offers a coupon or patient assistance program. Many manufacturers provide free or reduced-cost medications directly to patients who meet income requirements. You can find these programs through the manufacturer's website, through NeedyMeds.org, or by calling the manufacturer's customer service line (usually on the drug's packaging).

If you are struggling to pay for multiple medications, contact your local Area Agency on Aging or a senior center. Many communities have programs that help seniors pay for drugs, and staff there can tell you what is available in your area. You can find your local agency through the Eldercare Locator at 1-800-677-1116.

Frequently Asked Questions

What happens if I do not enroll in Part D when I first become may be able to access?

You can still enroll later, but you will pay a permanent penalty on your monthly premium for as long as you have Medicare. The penalty is roughly 1% of the national average Part D premium for each month you were may be able to access but not enrolled. If you go without Part D coverage for more than 63 days in a row, you lose the right to enroll outside of open enrollment.

Can I use my Part D plan at any pharmacy?

No. Each Part D plan has a network of pharmacies where you pay the copay listed in your plan. If you use an out-of-network pharmacy, you will pay more or the plan may not cover the drug at all. Check your plan's pharmacy network before you enroll, especially if you have a pharmacy you prefer.

What if I move to a different state?

Your current Part D plan may not be available in your new state. When you move, you have a special enrollment period (usually 2 months) to switch to a plan that works in your new location. Contact Medicare or your current plan to find out what plans are available where you are moving.

Do I need Part D if I have other insurance?

It depends on what coverage you have. If your other insurance covers drugs as well as or better than Part D, you may not need it — but you should check with that plan first. If you decline Part D and later lose that coverage, you may have to pay a permanent penalty. Ask your current insurer whether your coverage is considered "creditable" (as good as Part D) before you decide.

Can I appeal if my plan denies a formulary exception?

Yes. If your plan denies your exception request, you can appeal. Your doctor can help you file the appeal, which must happen within 60 days of the denial. The plan must respond within 7 days for expedited appeals and 30 days for standard appeals. If the plan still says no, you can file a complaint with Medicare.