Prescription Drug Coverage

Medicare Part D Plans

Medicare Part D helps with the cost of prescription drugs.

Individuals must be enrolled in Part B to be eligible for a Part D plan. They can get drug coverage with a standalone Part D plan or as part of a Medicare Advantage plan (Part C). Part D plans are offered by private insurance companies approved by Medicare. Choices vary depending on location. Coverage and costs beyond the standards set by Medicare vary from plan to plan. Some plans have pharmacy networks and mail order pharmacies that offer discounted prices.

Medicare Part D Plans Cover:

Types of drugs most commonly prescribed for Medicare beneficiaries as determined by federal standards

Specific brand name and generic drugs on the plan formulary, or list of drugs

Stages of Part D Coverage

Part D coverage is broken into four stages. Individuals pay a share of the cost for their drugs in each stage. The stages progress based on how much they and their plan pay, up to set limits. The cycle restarts at the beginning of each year.

Annual Deductible

Insured pays 100% of the cost up to the plan deductible amount.

Initial Coverage

Insured pays copay or coinsurance up to a set limit.

Coverage Gap (Donut Hole)

Insured pays percentage of cost up to an out-of-pocket limit.

Catastrophic Coverage

Insured pays reduced copay for the rest of the year.

Options for Part D Coverage

Medicare isn’t one-size-fits-all. Parts and plans can be combined to customize coverage. There are 7 possible combinations.


Original Medicare (Parts A & B) plus a standalone Part D plan


A Medicare Advantage (Part C) plan without drug coverage plus a standalone Part D plan; only works with certain Medicare Advantage plan types


Original Medicare (Parts A & B) plus a standalone Part D plan plus a Medicare supplement plan

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Medicare: Prescription Coverage