Medicare Part D Prescription Drug Coverage Explained
What is Medicare Part D?
Medicare Part D helps pay for the cost of prescription drugs. You can get Part D included in your Medicare Advantage plan or through a standalone Part D plan from a private insurance company.
What does Medicare Part D (prescription drug coverage) cover?
Part D covers brand-name, generic, and specialty medications. Each plan has a list of drugs it covers, known as a formulary.
How much does Medicare Part D cost?
Your costs when enrolled in a Part D plan include:
- Your Part D plan monthly premium, if applicable.
- Any out-of-pocket costs such as copays, coinsurance, and deductibles included with the prescription drug plan you choose.
- A late enrollment penalty (this applies only if you have a period of 63 days without Part D coverage).
Stages of prescription drug coverage
As your prescription medication spending increases throughout the year, you move from one stage to the next. You start at the initial coverage stage at the beginning of each year. All Part D drug plans have the same stages.
- Deductible stage
- UPMC for Life plans do not have a deductible for prescription drugs. If your plan does have a deductible, you will pay the full price for your drugs until you meet your Part D deductible.
- Initial coverage stage
- Your plan begins to pay for your covered prescriptions. You pay a copay or coinsurance, depending on the drug tier, until your total yearly costs reach $4,660. The total yearly drug costs are the drug costs paid by both you and your Part D plan. Most people will stay in this stage for the entire year.
- Coverage gap stage
- You pay up to 25% of the plan’s cost for brand-name and generic drugs plus a portion of the dispensing fee. You remain in this stage until your out-of-pocket costs, as well as any manufacturer’s discount payments provided for brand-name drugs, reach $7,400. After that, you move into the catastrophic coverage stage.
- Catastrophic coverage stage
- Once you reach this stage, you pay the greater of 5% or $4.15 for a generic drug (or a drug treated like a generic). For all other drugs, you pay the greater of 5% or $10.35.
Am I eligible for Medicare Part D?
You must have Original Medicare Parts A and B to join a Part D plan.
How do I get Medicare Part D?
- You can join a standalone Part D prescription drug plan. A standalone Part D plan would be in addition to Original Medicare or a Medicare Supplement plan.
- Most Medicare Advantage plans include Part D prescription drug coverage. If you have a Medicare Advantage plan, you cannot also join a separate standalone Part D plan.
Extra Help with prescription drug costs
If you have limited income and resources, you may qualify for extra help. Learn how you can get help with prescription drug costs.