Medicare Part D helps pay for the prescription drugs you use. Medicare Part D coverage is not automatic. You must enroll in a Medicare Part D plan if you want coverage.
Medicare Part D is prescription drug coverage. You get it through an insurance plan you buy from a private insurance company. You can buy a separate plan just for drugs, called a prescription drug plan (PDP), or you can buy a Medicare Advantage (Part C) plan that includes drug coverage, depending on where you live and what's available in your area.
The federal government has created guidelines for the types of drugs that must be covered by drug plans and has set minimum standards of benefits. Insurance companies that offer Medicare Part D plans must meet these standards. But all plans are not the same. Costs and drugs coverage vary by plan.
What pharmacies can you use with a Medicare Part D plan?
Each drug plan decides which pharmacies plan members may use. Plans may limit your choice of pharmacies by geographic area, such as a state, or offer nationwide coverage. If you travel often, you may want to consider a plan that allows you to access pharmacies wherever you go.
Some plans also offer mail-order services, so you can have drugs mailed to your home.
Each Medicare Part D plan has a service area—the area where it operates. You must live in a plan's service area to enroll.
Medicare Part D costs
Medicare Part D premium
The insurance companies that offer Medicare Part D drug plans (and Medicare Advantage plans with drug coverage) set their own prices. Monthly premiums for drug plans can vary widely, even for similar coverage.
Each year in October, the insurance companies announce premiums and other details of their plans for the coming year.
Important: If you don't sign up for Medicare Part D coverage as soon as you are eligible, you may pay a penalty on your premium , unless you qualify for an exception. This penalty is set by Medicare. For each month you delay, you may pay an additional 1% (of the average premium) per month. You will pay that penalty for as long as you're enrolled in Medicare Part D.
Medicare Part D cost sharing
Medicare Part D deductible
Some plans charge an annual deductible and some don't.
Medicare Part D copay
You could pay a copay each time you fill a prescription.
Medicare Part D coinsurance
You could pay a percentage of the cost (called "coinsurance") each time you refill a prescription.
Medicare Part D coverage gap
In 2012, you will pay 86% of the price for generic drugs and about 50% of the price (plus the dispensing fee) for brand-name drugs when you reach the coverage gap. In future years, you will receive additional savings until the coverage gap is closed in 2020.
Important: If you choose Medicare Part D coverage, always fill prescriptions at a participating network pharmacy and show your member plan ID card. You'll have an accurate record of your total spending for drugs, and you'll get the plan's price for your drugs. That is especially important if you enter the coverage gap.