Prescription Drug Coverage
Medicare Part D
Medicare Part D helps cover the cost of prescription drugs. Without it — or a Medicare Advantage plan that includes drug coverage — you pay full price at the pharmacy.
Plans vary widely in which drugs they cover and what you'll pay. A local specialist can compare every plan available in your area against your actual medications — at no cost to you.
63
Days Without Coverage
Miss 63+ days without creditable drug coverage and you'll owe a permanent late-enrollment penalty
How Medicare Part D Works
Medicare Part D is prescription drug coverage for people with Medicare. Like Part A and Part B, Part D is not provided directly by the government — it is offered through private insurance companies that are approved and regulated by Medicare.
If you have Original Medicare (Parts A and B), you need to enroll in a standalone Prescription Drug Plan (PDP) to get drug coverage. If you have a Medicare Advantage plan, check your plan documents — most Medicare Advantage plans already include Part D drug coverage (these are called MA-PD plans).
Part D plans have a formulary— the list of drugs the plan covers. Drugs are grouped into tiers, with lower tiers typically costing less. Before you choose a plan, it's critical to check that your specific medications are on the formulary and at what tier.
Key Part D Concepts
Formulary
The list of drugs covered by a plan. Drugs are placed in tiers — generics cost the least, specialty drugs cost the most. Always check your medications before enrolling.
Late-Enrollment Penalty
Go 63+ days without creditable drug coverage and you'll owe 1% of the national base premium per month — permanently added to your Part D premium.
Coverage Gap
After you and your plan spend a set amount on drugs, you enter the coverage gap. Under recent law, catastrophic coverage kicks in at $8,000 out-of-pocket (2025).
Deductible
Many Part D plans have an annual deductible you pay before coverage kicks in. Some plans waive the deductible for preferred generics.
Extra Help (LIS)
Low-Income Subsidy (Extra Help) is a federal program that reduces Part D premiums, deductibles, and copays for qualifying beneficiaries.
Creditable Coverage
If you have other prescription drug coverage (employer plan, TRICARE, VA), it may be "creditable" — meaning it meets Medicare's minimum standard and delays your penalty window.
Frequently Asked Questions
What is Medicare Part D?
Medicare Part D is prescription drug coverage for Medicare beneficiaries. Part D plans are offered by private insurance companies approved by Medicare. If you have Original Medicare (Parts A and B) without a Medicare Advantage plan that includes drug coverage, you need a standalone Part D Prescription Drug Plan (PDP) to get help paying for your medications.
Do I need a Part D plan if I have Medicare Advantage?
Most Medicare Advantage plans (sometimes called MA-PD plans) already include prescription drug coverage. If your Medicare Advantage plan includes Part D, you do not need a separate standalone Part D plan. However, if you have a Medicare Supplement (Medigap) plan paired with Original Medicare, you will need a standalone Part D plan for drug coverage.
What is the Part D late-enrollment penalty?
If you go without creditable prescription drug coverage for 63 or more consecutive days after your Initial Enrollment Period ends, you may owe a late-enrollment penalty. The penalty is 1% of the national base beneficiary premium for each full month you were without coverage — and it is added to your Part D premium for as long as you have Medicare. Enrolling on time avoids this permanent penalty.
What is a drug formulary?
A formulary is the list of prescription drugs covered by a specific Part D plan. Drugs are organized into tiers — lower tiers generally cost less. Before enrolling in a plan, you should check that your specific medications are on the formulary and review what tier they fall under to estimate your out-of-pocket costs.
What is the Medicare Part D coverage gap (donut hole)?
The coverage gap (historically called the "donut hole") is a temporary limit on what a Part D plan pays for drugs after you and your plan have spent a certain amount. Under current law, once you reach the out-of-pocket threshold ($8,000 in 2025), you enter catastrophic coverage and pay nothing for covered drugs for the rest of the year. The gap has narrowed significantly under the Inflation Reduction Act.
When can I enroll in a Part D plan?
You can enroll in Part D during your Initial Enrollment Period (the 7-month window around your 65th birthday), the Annual Election Period (October 15 – December 7 each year), or a Special Enrollment Period if you qualify due to a life event like losing employer drug coverage. Enrolling as soon as you are eligible avoids the late-enrollment penalty.
Medicare Part D Articles
A Guide to Managing Your 2026 Medicare Part D Plan
How to Maximize Your Medicare Part D Plan in 2025
New in 2025: Prescription Payment Plans
Major Changes Coming to Medicare Part D
5 Ways to Reduce Part D Costs in the Donut Hole
Does Original Medicare Cover Prescriptions?
Close the Gap: Top Strategies for Managing Your Medicare Prescription Costs
What Is Medicare TROOP?
What Is Step Therapy in Medicare?
8 Frequently Asked Questions: Medicare Part D
Do I Have to Have Medicare Part D?
How Much Does Medicare Part D Cost?
4 Steps to Choose a Medicare Part D Plan in Arizona
How Does the Medicare Donut Hole Work?
How to Save Money on Prescription Drugs in Arizona
Medicare Part D Explained
Need help comparing Part D drug plans?
A local licensed Medicare plan specialist can run a side-by-side comparison of every plan that covers your medications — free, no pressure.
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