What is Medicare Part D?

Medicare Part D is the prescription drug benefit that is available to those on Medicare. It is available either as a standalone plan or is part of some Medicare health plans, such as Medicare Advantage. It’s designed to lower the cost of buying medication. Each Medicare Part D plan includes a “formulary” or list of drugs it covers, and plans organize the different types of drugs into different tiers within this formulary based on cost and availability. All plans that cover prescription drug coverage–like a Medicare Advantage plan that includes drug costs—are required to cover at least the standard Medicare Part B benefit.

Am I automatically enrolled in Medicare Part D when I turn 65?

No, Medicare Part D is not included in the automatic Original Medicare plan, but it can be added on during the initial enrollment window three months before and three months after turning 65. When you turn 65 and start taking out social security checks you are automatically enrolled in Medicare Parts A and B. This means while things like hospital visits, office appointments and some equipment is covered, prescription drug costs are not covered until you enroll in Medicare Part D via a standalone plan or a health plan that includes it.

Is Medicare Part D part of basic Original Medicare?

No, Medicare Part D is not included as part of Original Medicare. The basic Original Medicare plan refers only to Parts A and B, which don’t include prescription drug costs as part of the plan. To have access to Medicare Part D it is necessary to enroll into it separately.

What are my options to cover my drugs?

When you are enrolled in Medicare you have the option to either enroll in a stand-alone prescription drug plan or can enroll in a Medicare health plan that includes Part D drug coverage, such as a Medicare Advantage Prescription Drug plan.

Do different Medicare Part D plans charge the same for drugs?

No, not all Medicare Part D plans charge for drugs in the same way. There are different “tiers” of drug coverage, and each one has a different copayment rate for the drugs you pick up. They vary based on what types of prescription drugs are covered and whether they are generic or name-brand drugs. Not all Medicare Part D plans use the same tier system, so be sure to check which drugs are covered under your plan. Medicare Advantage plans may also use a different system for deciding which drugs are covered and at what copayment cost. Medicare Part D tiers were changed as of 2020 to make some tiers a bit cheaper.

What is a Medicare Part D tier?

There are different “tiers” of drug coverage—typically four or five tiers—and each one has a different copayment rate for the drugs you pick up. The lowest tier—tier 1—covers mostly generic drugs and may have a lower copayment at the point of service. Tier 2 has a medium copayment and covers certain preferred name-brand drugs as well as generic drugs. Tier 3 has a higher copayment and covers non-preferred name-brand drugs. The highest tier is the Specialty Tier which covers very high-cost prescription drugs.