What Is Medicare Part D?

If you want Medicare prescription drug coverage, you typically have two options:

• Enroll in a Medicare Advantage plan that includes prescription drug coverage
• Enroll in a Medicare Part D standalone prescription drug plan (PDP)

Medicare Part D provides prescription drug coverage for Medicare enrollees. Part D plans are offered by private insurers, not the federal government.

Part D is optional coverage that works with many other forms of insurance, including Original Medicare, Medicaid, employer health plans and in some cases, Medicare Advantage plans.

Each Part D prescription drug plan may have varying benefits, costs and rules.

To compare plans where you live, you can call to speak with a licensed insurance agent. You can also compare plans online for free.

You can also compare Part D plans and enroll in a Medicare prescription drug plan online in as little as 10 minutes when you visit MyRxPlans.com.¹

Who is eligible for Part D plans?

About 24 million people are enrolled in stand-alone Medicare Part D plans.²

In order to qualify for Medicare Part D coverage, you first must be enrolled in Medicare Part A and/or Part B.

Once you are eligible, you need to apply during a Part D enrollment period. If you do not sign up for a Part D plan when you are first eligible and you do not have creditable coverage, you may be required to pay a monthly late enrollment penalty once you do enroll.

Drug coverage (such as a prescription drug plan offered by your employer) is creditable if it pays at least as much as the standard Medicare prescription drug coverage.

If you have a Medicare Advantage plan with drug coverage, you can't add a standalone prescription drug plan.

When can I enroll in a Part D plan?

Medicare Part D enrollment periods

Enrollment period	Dates	What you can do during this period
Initial Enrollment Period (IEP)	Starts 3 months before the month you turn 65 Ends 3 months after the month you turn 65	- Sign up for a Medicare Part D plan
Medicare Open Enrollment Period (aka the Annual Enrollment Period, or AEP)	Starts October 15 Ends December 7	- Sign up for a Medicare Part D plan - Switch Medicare Part D plans - Leave a Medicare Part D plan
Special Enrollment Period (SEP)	Depends on your personal situation	- Depends on your personal situation

You must wait for an enrollment period to sign up for, make changes to, or leave a Medicare Part D plan.

Find your personal situation below to determine when you can enroll in, leave, or make changes to a Part D prescription drug plan.

If none of these situations apply to you, you may be able to qualify for a special enrollment period, depending on your personal situation.

First-time Medicare Part D plan enrollees

You are 65 (or turning 65) and signing up for Medicare Parts A and B

You can join a Medicare prescription drug plan during your Initial Enrollment Period (IEP).

Your IEP is 7 months long. It starts 3 full months before the month you turn 65. It continues through the month of your 65th birthday, and then for another 3 full months.

Example: You turn 65 on June 5. Your IEP starts on March 1 (3 full months before June) and ends September 30 (3 full months after June).

If you are enrolling during your IEP, your coverage will start at the following times:

• If you are 65: the first day of the month after you ask to join a plan
• If you are under 65: the first day of the month you turn 65

You have Medicare Part A and are signing up for Part B during General Enrollment

You can enroll in a Medicare prescription drug plan between April 1 and June 30.

You are disabled and under 65

You can enroll in a Medicare prescription drug plan after you have been getting Social Security or Railroad Retirement Board benefits for 21 full months. After that point, you have 7 full months to enroll in a Medicare prescription drug plan.

Current Medicare Part D plan enrollees

You want to switch, make changes to, or drop your plan

You can make changes to your current Part D plan, switch plans, or drop your prescription drug coverage entirely during the annual fall Medicare Open Enrollment Period for Medicare Advantage and prescription drug coverage, which runs from October 15 to December 7 each year.

Also called the Annual Enrollment Period (AEP) or the Annual Election Period, this period takes place every year between October 15 and December 7.

During AEP, you may:

• Enroll in a Medicare Part D plan
• Switch from one Part D plan to another
• Disenroll in a Part D plan
• Enroll in a Medicare Advantage plan
• Switch from one Medicare Advantage plan to another
• Disenroll from a Medicare Advantage plan

If you make changes during this time, your new coverage will begin on January 1 of the following year.

Special Enrollment Period

A Special Enrollment Period (SEP) may be granted at anytime throughout the year for people who have specific qualifying circumstances.

These qualifying situations include, but are not limited to:

• Losing creditable drug coverage through no fault of your own
• Moving outside of your drug plan’s service area
• Experiencing contract or enrollment errors or violations
• Moving into or out of a skilled nursing facility or nursing home
• Gaining or losing eligibility for a Special Needs Plan

A licensed insurance agent can help you find out if you qualify for a Special Enrollment Period. Depending on your qualifying circumstance, you may or may not be eligible to enroll in a Part D plan during a certain Special Enrollment Period.

Five-Star Special Enrollment Period

Each year, the Centers for Medicare and Medicaid Services (CMS) rates all Medicare Part D and Medicare Advantage plans on a set of criteria and assigns a rating between one and five stars, with five being the highest rating.³

The Five-Star Enrollment Period runs each year from December 8 to November 30 of the following year.

Any beneficiary who is a member of a Part D or Medicare Advantage plan that does not hold a five-star rating may use this enrollment period to enroll in a plan that has a five-star rating.

You can only enroll in a five-star plan if one is available where you live.

Apply for a Medicare Part D prescription drug plan

Are you looking to enroll in a Medicare Part D prescription drug plan?

To compare plans where you live, you can call to speak with a licensed insurance agent. You can also compare plans online for free when you visit MyRxPlans.com.

What does Medicare Part D cover?

Part D plans have different formularies, tiers, coverage rules, and pharmacy networks.

Coverage rules such as quantity limits, prior authorization, and step therapy may limit how and when you receive your prescription drugs.

Part D plans also may have pharmacy networks, which may impact the cost of your prescription drugs.

More info: Part D benefits

How much do Part D plans cost?

Medicare Part D prescription drug plans don't pay for everything.

If you have a Part D plan, you may have to pay premiums, "donut hole" drug costs, and other out-of-pocket costs like deductibles and copayments.

Medicare Part D plan beneficiaries pay 25 percent of their brand name and generic drug costs while they’re in the Part D donut hole coverage gap.

More info: Part D costs - Premiums, deductibles, and the donut hole

How do I compare Medicare prescription drug plans?

There are many Part D plans to choose from. In 2022, there are 766 plans offered nationwide.²

You should make sure to compare the following 3 factors when choosing your Part D plan:

• Benefits
• Costs
• Star ratings³

This online plan comparison tool can help you easily evaluate all of these factors for available plans in your area offered through this website.

Medicare Part D plans by state

Medicare Advantage plans and Medicare Part D plans are both offered by private insurance companies, and plan availability varies from state to state. Learn more about Medicare Part D plan enrollment nationwide and in your state.

You can also find more Medicare prescription drug coverage information and resources for your state.

More info: Medicare Part D plans by state

What is a Medicare formulary?

A Medicare formulary is the list of prescription drugs that are covered by a particular Medicare Part D or Medicare Advantage plan.

Each plan includes its own formulary that determines which drugs are covered by the plan and how much the drugs cost based on which tier the drug is classified into.

Drugs on a Medicare formulary are divided into tiers that determine the cost paid by beneficiaries.

For example, a tier 1 drug might consist of low-cost, generic drugs and require only a small copayment in order to fill a prescription. A tier 4 drug, however, might be a more expensive name brand drug that requires a higher copayment.

The number of drug tiers and the cost breakdown will vary according to each plan.

Drugs may be added or removed from the market at any time, and therefore drugs may be added or removed from a plan’s formulary. Drugs may also remain for sale on the market but be removed from a plan’s formulary for a variety of reasons.

Beneficiaries reserve the right to request that a Medicare plan cover a particular drug. You can also request to pay a lower amount for a covered drug.

All Medicare formularies generally must include coverage for at least two different drugs within most drug categories, and they must include all available drugs for the following categories:

• HIV/AIDS treatments
• Antidepressants
• Antipsychotic medications
• Anticonvulsive medications to treat seizure disorders
• Immunosuppressants
• Anticancer drugs not covered by Medicare Part B

A Medicare formulary won’t include over-the-counter drugs or weight-loss drugs.

Some drugs on a Medicare formulary come with certain types of restrictions, such as:

• Prior authorization
  Beneficiaries may be required to show that they meet certain criteria for consuming the particular drug.
  
  
• Step therapy
  Beneficiaries must first try a less-expensive form of a drug that has been proven effective before being covered for the more expensive version.
  
  
• Quantity limits
  There may be a restriction on the dosage amount of a drug or the frequency that the prescription may be filled.
  
  
• Opioid safety limits
  Opioids often contain restrictions for coverage, and doctors will usually work with a beneficiary and a pharmacist to determine a safe level of opioid prescription for each patient.

How do I determine the best type of plan for me?

Of course, your current list of prescription medications is a great place to start in understanding how extensive you need your Part D plan to be.

Make a list of every prescription drug you currently take and make note of whether or not the prescription is a brand name or generic option.

Check this list against the covered drug lists of the Part D plans you are evaluating. 

It’s important to take a look at all the copays and costs for drugs that you are currently taking so that you get a sense of what the plan AND the costs of your regular medications will cost each year.

It is also important to note that no plan covers every single drug and copays may vary. You may be able to find lower out-of-pocket costs at specific pharmacies, depending on the plan.

Can Part D plans can change from year to year?

If this is your first time enrolling in Part D, you may be surprised by some of the variability in plans that you may experience each year.

There are a few major things that can change from year to year:

• The formulary (the list of prescription drugs that the plan covers)
• The costs assessed by the plan including premiums, deductibles and copays

This is why it’s important to check your Part D plan coverage every year.

Make sure you compare your current list of brand and generic prescription drugs against your plan’s new formulary and cost breakdown to see if you are still appropriately covered.

Medicare Part D late enrollment penalties

If you need prescription drug coverage, it is important to enroll in a Part D plan during your Initial Enrollment Period or when you are first eligible. If not, you may face a late penalty.

If your IEP ends and there is a period of 63 days or more in a row when you do not have creditable prescription drug coverage, you may have a late enrollment penalty added to your monthly premium for as long as you have Medicare prescription drug coverage.

Part D Late Enrollment Penalty: You will have to pay a Part D late enrollment penalty if you go 63 consecutive days without "creditable drug coverage" after your Medicare Initial Enrollment Period is over. Creditable coverage includes a Medicare Part D plan, a Medicare Advantage plan or a Medicare health plan that offers drug coverage, or other drug coverage that pays at least as much as Medicare's standard prescription drug coverage. The amount you pay for the Part D late enrollment penalty depends on how long you went without creditable drug coverage.

Drug coverage is creditable if it pays – on average – at least as much as the standard Medicare prescription drug coverage.

Find a Medicare plan that offers the prescription drugs you need

You may be able to find Medicare plan options in your area that feature a drug formulary that fits your prescription drug coverage needs.

To compare plans where you live, call to speak with a licensed insurance agent.

¹ 10-minute claim is based solely on the time to complete the e-application if you have your Medicare card and other pertinent information available when you apply. The time to shop for plans, compare rates, and estimate drug costs is not factored into the claim. Application time could be longer. Actual time to enroll will depend on the consumer and their plan comparison needs.

² Cubanski J, Damico A. (Nov. 2, 2021). Medicare Part D: A First Look at Prescription Drug Plans in 2022.  Kaiser Family Foundation. Retrieved from www.kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-medicare-prescription-drug-plans-in-2022.

³ Every year, Medicare evaluates plans based on a 5-star rating system.