Medicare Part D Coverage: An Expert Guide (2023)

Medicare Part D is one of the four main parts of Medicare (Medicare Part A, Medicare Part B, Medicare Part C, and Medicare Part D). It provides coverage for prescription drugs, but each plan provider will vary on the drugs that are covered and how much your annual out-of-pocket maximum for health care will be.

If you’re wondering, “What is Medicare Part D?” read our article below to learn what the plan covers, how much it costs, and how you may be able to get help with your out-of-pocket costs.

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What is Medicare Part D?

Medicare Part D is one of the four main parts of Medicare. It provides coverage for prescription drugs. You can sign up for a Medicare Part D plan if you have Original Medicare (Medicare Parts A and B). You can also sign up if you have a Medicare Advantage plan that doesn’t include Part D.

Each Medicare Part D plan has a list of drugs it will cover, known as a formulary. The formularies typically place medications on different coverage levels, called tiers. Drugs in lower tiers will generally have lower out-of-pocket costs than drugs in higher tiers.

To meet the Medicare Part D eligibility requirements, you must already have Medicare Part A and Part B or Medicare Advantage (Part C).

What does Medicare Part D cover?

What drugs are covered by Medicare Part D? Each plan’s formulary will list the medications that the plan covers. In general, the formulary will include at least two drugs in the most commonly prescribed categories and classes to make sure that people can get the proper medications.

If you cannot find a drug you are taking or a suitable replacement on your plan’s formulary, you can work with your healthcare provider to ask for an exception.

A plan’s formulary can change throughout the year. In some cases, your plan has the right to remove drugs from its list.

If you are taking a drug that is removed, the company must inform you in writing at least 30 days before the change or provide written notice plus a 30-day supply when you get a refill.

Each formulary will list both brand name and generic drugs. Generic drugs are the same as brand name regarding dosage form, safety, strength, method of administration, quality, performance characteristics, and intended use.

Medicare Part D plans must cover the brand name, generic drugs, and insulin preparations that most Medicare enrollees use.

The plan must also cover anticancer drugs, antidepressants, antipsychotics, anticonvulsive medications, HIV/AIDS treatment, immunosuppressants, and opioid treatment programs (OTPs).

How much does Medicare Part D cost?

When you sign up for a Medicare Part D plan, your plan provider will set your premium so that it will vary by plan. For example, if you have prescription coverage from a Medicare Advantage plan that includes prescription projects, you may not have to pay an additional premium.

If you have a higher income, you will be required to pay an income-related monthly adjustment amount (IRMAA) that ranges between $12.40 and $77.90 per month in 2022 on top of your Part D premium.

Your health insurance deductible will also vary based on your plan. However, Medicare has set the maximum deductible at $480 per year in 2022.

The amount you have to pay for coinsurance or copayments will depend on your plan, the formulary, and which tier your medication is placed in. The cost of your medication can fluctuate throughout the year.

Your plan provider has the right to increase your copayment or coinsurance for a medication if the manufacturer raises the price or if you choose to take a brand-name drug instead of a generic drug.

When you and your plan provider have spent $4,430 in 2022 on medications, the maximum you will pay is 25% of the medication cost until you reach $7,050 in out-of-pocket spending.

Can I get help with out-of-pocket costs?

A program called Extra Help can provide aid in paying your Medicare Part D premiums, coinsurance, and copayments. You may need to provide your plan provider with some documentation, such as the following:

• A purple notice from Medicare that notifies you of automatic qualification for Extra Help
• A yellow notice from Medicare that informs you of automatic enrollment in Extra Help
• A notice of award from Social Security for Extra Help
• An orange notice from Medicare that notifies you of changes to your copayment
• Your award letter from Social Security to prove that you receive SSI
• Proof that you receive Medicaid and live in an institution or get home-based help
• Other documents that prove you receive Medicaid

After you provide the necessary documents to your plan provider, your plan must ensure you pay no more than the LIS drug cost limit, which is $3.95 for generic drugs or $9.85 for brand name in 2022. Your plan provider must also contact Medicare to confirm your Extra Help qualification.

If you need help getting the right health insurance or finding the best-rated Medicare Part D plans, enter your ZIP code into our free quote comparison tool below.