How Medicare Part D Covers Prescription Drugs

 

Medicare Part D is prescription drug coverage offered through Medicare-approved private insurance companies.

If you have Original Medicare, you can get drug coverage through a stand-alone Medicare Prescription Drug Plan that works alongside your Part A and Part B coverage. You can also get this coverage through a Medicare Advantage Prescription Drug plan. Medicare plans that cover prescription drugs may vary when it comes to costs and covered medications. Taking the time to learn how Medicare Part D works and to compare Medicare plan options can help you save money by finding coverage that covers your prescription drugs at the lowest cost.

How Medicare Part D works

As mentioned, beneficiaries enrolled in Original Medicare, Part A and Part B, have the option of getting prescription drug benefits through a Medicare Prescription Drug Plan. Original Medicare does offer limited prescription drug coverage: You’re covered for medications you get during covered inpatient hospital and skilled nursing facility stays or prescription drugs you get in an outpatient setting (for example, an outpatient clinic). However, these tend to be the types of medications that you can’t give yourself, such as infusion or chemotherapy drugs. For most other prescription drug coverage of medications that you’d take on your own (also known as “self-administered” medications), you’ll need to enroll in a Medicare Prescription Drug Plan.

Another option is to get your prescription drug coverage included in your Medicare Advantage plan. Also known as Medicare Part C, the Medicare Advantage program offers an alternative way to get your Original Medicare benefits. All Medicare Advantage plans must cover at least the same level of benefits as Medicare Part A and Part B (with the exception of hospice care, which is still covered under Part A of Original Medicare). Unlike Original Medicare, however, many Medicare Advantage plans also include prescription drug coverage, giving you the convenience of having all of your Medicare benefits covered through a single plan.

One important thing to keep in mind is that you generally shouldn’t enroll in a Medicare Prescription Drug Plan and a Medicare Advantage plan at the same time. Instead, you should get your prescription drug benefits through a Medicare Advantage Prescription Drug plan if there’s one available in your location. In fact, if you enroll in a Medicare Prescription Drug Plan and are already enrolled in a Medicare Advantage Prescription Drug plan, you’ll be automatically disenrolled from your Medicare Advantage plan and returned to Original Medicare. The exception to this is if you’re enrolled in a type of Medicare Advantage plan that doesn’t cover prescription drugs (such as a Medical Savings Account plan or certain Private Fee-for-Service plans); in this case, you’re allowed to enroll in a stand-alone Medicare Prescription Drug plan for your Part D coverage.

Every Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug plan has a drug formulary, which is a list of the prescription drugs covered by the plan and the costs associated with each medication. Keep in mind that formularies may change at any time; your Medicare plan will notify you if necessary.

Here’s how it works. A Medicare plan that includes prescription drug coverage will typically place covered drugs in its formulary into tiers, with different costs for each tier. Medications on higher tiers usually have higher copayments and coinsurance than drugs placed on lower tiers. For instance, a Medicare Prescription Drug Plan might cover generic drugs with a $10 copayment, certain brand-name drugs with a $25 copayment, and other brand-name drugs with a $35 copayment. Medications not listed in the formulary are usually not covered by the plan, meaning you might be responsible for the full cost for these prescription drugs. Check with your plan if you have questions. In some cases, you can request an exception, as explained below.

When considering enrollment in a Medicare Prescription Drug Plan or a Medicare Advantage Prescription Drug plan, it’s extremely important to make sure all the medications you take are included in the drug formulary before you sign up.

Your Medicare plan should send an Evidence of Coverage notice every fall, specifying how much you’ll pay for prescription drugs at different levels of your plan’s formulary. The plan should also send an Annual Notice of Change document, which lists cost and coverage changes that will go into effect the following year. You should read both documents carefully when deciding whether to stay with your current plan, taking into consideration how your plan meets your current health and prescription drug needs.

Every Medicare plan that includes prescription drug coverage make its drug formulary available. For more information, you can contact your Medicare plan or visit the plan’s website to get a copy of its current drug formulary.

Medicare Part D formulary changes

As mentioned above, Medicare plans that cover prescription drugs can make changes to their formularies during the year in certain situations. However, these changes are limited to protect members who may have joined a plan specifically because of the prescription drugs listed in the formulary.

A Medicare plan that covers prescription drugs must notify its members in writing at least 60 days before any mid-year changes to its formulary become effective or provide you a written notice of the change and a 60-day supply of your medication at the time that you refill your prescription.

The notification must include:

  • The name of the affected prescription drug
  • The type of change (for example, whether the Medicare plan is removing the medication from its formulary or changing its tier status)
  • The reason for the change
  • Alternatives to the affected medication that are in the same drug class or cost-sharing tier
  • The new cost-sharing requirements for the affected medications
  • Information on how members can request a coverage determination or exception

A Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan is allowed to add new prescription drugs to its formulary, place medications on a lower tier (thereby reducing the copayment or coinsurance cost), or remove medication management requirements at any time of the year. Medication management requirements may include coverage rules like prior authorization, step therapy, and quantity limits:

  • Prior authorization requires that you and/or your prescribing doctor must first request approval from the Medicare plan before it will cover the medication. Your doctor must demonstrate that the prescription drug is medically necessary for the Medicare plan to cover it.
  • Quantity limits restrict the maximum dosage or amount of a medication that you’re allowed when filling a prescription.
  • Step therapy requires that you must try first take one or more similar, lower-cost alternative medications before the Medicare plan will cover the prescription drug that your doctor prescribed.

Medicare has strict rules limiting when a Medicare plan can remove a medication from its formulary or move it to a higher tier; these rules are meant to protect beneficiaries who may be affected by midyear changes to medications that they take. The plan can make “maintenance” changes to its formulary after March 1, such as replacing a brand-name medication with a generic drug, or removing a medication for safety reasons or because of its effectiveness.

Requesting a coverage determination or exception

You have the right to request the following from your Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan:

  • A coverage determination, which is a written notice from your plan stating whether it will cover a specific prescription drug, whether you’ve met eligibility rules for coverage, and your costs for the medication. It may also include any requirements (such as prior authorization) for getting coverage of the drug and any exceptions to those rules.
  • An exception to cover a drug that is not on the formulary
  • An exception to waive coverage rules, such as prior authorization, quantity limits, or step therapy
  • An exception to pay a lower copayment for a medication on a more costly tier

When a medication you need isn’t covered by the Medicare plan or is covered at a higher tier, you can first request a coverage determination from your plan. If your condition warrants adding the medication to the formulary or altering the cost, the plan will notify you in its coverage determination of this exception to its plan rules. The Medicare plan may require a process called step therapy, where you must first try a similar, less expensive medication that’s been proven effective for your condition before it will cover the more expensive drug.

However, if your doctor believes it’s medically necessary for you to take a prescription drug that isn’t covered by your plan, you can request an exception to have the plan’s original coverage decision waived.

Either you, your doctor or prescriber can submit the exception, stating why it’s medically necessary for you to take a different medication that isn’t covered or is covered at a higher tier. This request can be submitted in writing or by phone. Your Medicare plan is required to notify you of its decision within 72 hours. If you need a medication faster than that because waiting for a standard decision could be dangerous to your life or health, you can file an expedited request to receive a decision within 24 hours. If you still don’t agree with the plan’s decision, you can appeal. For more information on the Medicare appeals process, visit Medicare.gov.

Medicare Part D coverage of vaccines

Although Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans may cover different medications, all Medicare plans with prescription drug coverage must cover all commercially available vaccines that are medically necessary to prevent illness. Certain shots (such as the hepatitis B and pneumococcal vaccines) are covered under Part B as part of its preventive coverage; if Part B covers a vaccine, it’s not required to be covered under Part D.

What Medicare Part D doesn’t cover

Medicare excludes certain medications from Part D formularies. Excluded medications may include, but are not limited to, those in the following drug classes:

  • Weight loss, weight gain, or anorexia drugs
  • Fertility drugs
  • Cosmetic or hair growth drugs
  • Non-prescription, over-the-counter drugs
  • Medications that treat cold or cough symptoms
  • Medications that treat sexual or erectile dysfunction
  • Prescription vitamins or nutritional supplements (except for prenatal vitamins and fluoride preparations)

Finding a Medicare plan that covers your prescription drugs

Would you like help finding Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans in your area? You can do so in a few ways. If you’re ready to browse plans now, use the plan finder tool on this page to start comparing plan options; you can even enter your current list of prescriptions to view plan options that cover your specific medications. Would you prefer to get on-the-phone assistance? Simply pick up the phone and dial the number on this page to discuss your Medicare prescription drug needs with a licensed insurance agent.
This website and its contents are for informational purposes only. Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.

To learn about Medicare plans you may be eligible for, you can:

  • Contact the Medicare plan directly.
  • Call 1-800-MEDICARE (1-800-633-4227), TTY users 1-877-486-2048; 24 hours a day, 7 days a week.
  • Contact a licensed insurance agency such as Medicare Consumer Guide’s parent company, eHealth.
    • Call eHealth's licensed insurance agents at 888-391-2659, TTY users 711. We are available Mon - Fri, 8am - 8pm ET. You may receive a messaging service on weekends and holidays from February 15 through September 30. Please leave a message and your call will be returned the next business day.
    • Or enter your zip code where requested on this page to see quote.

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