What Does Medicare Part D Cover?
Key Takeaways
- Medicare Part D is private insurance that covers genericA generic drug is an approved prescription drug that has the same active-ingredient formula as a brand name drug and is usually offered at a lower cost. and brand-nameBrand name drugs are prescription drugs sold under a specific name or trademark. They have the same active ingredients as generic drugs but usually cost more. drugs
- Your Medicare Part D coverage depends on your policy and how your insurer classifies the drugs you need, among other things
- Part D coverage has rules to ensure medication is safe and necessary
Medicare Part D is prescription drug coverage for people on Medicare that’s offered through private insurance companies. Medicare Part D plans cover a wide range of outpatient prescription drugs, including brand-name drugs, which are sold under a trademarked name, and generic drugs, which are less expensive alternatives.
Each Part D plan has its own formulary, which is a list of covered medications. These formularies are divided into tiers that affect how much you pay. Tier 1 contains lowest cost generic medications while the highest tier contains expensive specialty medications.
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How Medicare Part D Works
Medicare Part D plans provide prescription drug coverage to help pay for the costs of medications. In 2024, 53 million of the 67 million Medicare beneficiaries were enrolled in Medicare Part D plans. There are two ways to access Medicare Part D benefits:
- Standalone Part D plan: The federally administered Original Medicare program consists of two parts: Part A, which is hospital insurance, and Part B, which is medical insurance. Original Medicare does not cover most prescription drugs, but if you’re enrolled in Part A, Part B, or both, you can choose to enroll in a standalone Medicare Part D plan. If you have limited income and resources, you may be eligible for Extra Help that makes a Part D plan more affordable.
- Medicare Advantage Prescription Drug Plan: After you’ve enrolled in both Medicare Part A and Part B, you can choose to switch to a Medicare Advantage plan from a private insurance carrier. These plans substitute for Original Medicare, and most include Part D coverage, plus additional benefits.
What Every Part D Plan Must Cover
Every Medicare Part D plan is required by law to cover a wide range of prescription drugs and to meet certain guidelines. These are the medications and vaccines that every standalone Medicare Part D plan and Medicare Advantage Prescription Drug plan must cover.
Required Medications
All Medicare Part D plans cover nearly every medication in the following protected classes:
- Cancer
- HIV/AIDS
- Antidepressants
- Antipsychotics
- Anticonvulsants
- Immunosuppressants
Required Vaccines
Medicare Part D plans are required to cover vaccines that are considered medically necessary to prevent illness and not already covered under Medicare Part B. Examples of vaccines covered under Medicare Part D are:
- Shingrix (shingles)
- RSV (respiratory syncytial virus)
- Boostrix (tetanus-diphtheria-whooping cough)
Patients with Medicare Part D plans pay nothing out of pocket for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).
Excluded From Coverage
Certain medications are not covered under Medicare Part D plans, including:
- Drugs prescribed specifically for weight loss or gain (but certain drugs used for weight loss may be prescribed to treat related conditions)
- Drugs for erectile dysfunction (e.g., Viagra)
- Fertility drugs
- Cosmetic or lifestyle drugs (e.g., hair growth products)
- Over-the-counter (OTC) medications
If you need a medication that’s excluded from Medicare Part D coverage, then you should expect to pay out of pocket. Pharmaceutical companies may offer discount cards or coupons that can lower the costs of medications that aren’t covered.
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Medicare Part D Coverage Details
Medicare Part D and Medicare Advantage Prescription Drug plans each have their own formulary (list of covered drugs). Beyond the required medications, Part D plans vary in what’s covered and how much you pay.
The formulary for every plan must:
- Be approved by Medicare.
- Include at least two drugs in each of the most commonly prescribed categories and classes.
Medicare Drug Tiers
Medicare Part D plans are divided into tiers based on cost. The portion that you pay may be in the form of a copayment (a set amount you’re charged every time you pick up certain prescriptions) or coinsurance (a percentage of the total cost of the specific medication). A drug in a lower tier will cost you less than one in a higher tier.
Plans may organize tiers in different ways, but here is one example:
- Tier 1 (most generic prescription drugs): lowest copay
- Tier 2 (preferred, brand-name prescription drugs): medium copay or coinsurance
- Tier 3 (non-preferred, brand-name prescription drugs): higher copay or coinsurance:
- Tier 4 or Specialty Tier (very high cost prescription drugs such as infusions and injectables): highest copay or coinsurance
Generic vs. Brand-Name Medications
Medicare Part D plans cover both generic and brand-name medications, either of which are viable options for treating medical conditions. Generic medications are often preferred as a cost-effective alternative. However, there may be no generic version available of newer drugs, and, in some cases, brand-name versions may be the better choice for a patient’s individual needs.
Key Similarities
- Both generic and brand-name medications contain the same active ingredient.
- Generic medications are required by the FDA to be bioequivalent, which means the active ingredient is released into the body in the same way as its brand-name counterpart.
- Generic drugs must be equal in safety and efficacy to the brand-name alternative.
Key Differences
- Cost: Brand-name drugs are more expensive, partly due to costs of researching a new medication and bringing it to market. Generic drugs are almost always less expensive than brand-name medications.
- Appearance: Brand-name medications often have a specific size, shape, and color as part of their marketing. Generic drugs have to look different from the brand-name equivalent.
Pharmacy Network
A pharmacy network is a group of pharmacies approved by a health insurance carrier to offer prescription medications at negotiated rates. You can visit these locations to get your prescription drugs at reduced costs compared to out-of-network pharmacies. You may also be able to mail order up to a three-month supply through an online pharmacy.
Each Medicare Part D or Medicare Advantage Prescription Drug plan has its own network. Check which pharmacies are in your network to avoid unexpected costs.
What to Do If Your Part D Plan Does Not Cover Your Medication
If you are denied coverage for a prescribed medication, there are steps you can take:
- Verify coverage. Confirm that the prescription is not part of the formulary. You can visit the plan’s website or call customer service.
- Request an exception. You can ask for a formulary exception if the medication is medically necessary. Your physician will need to provide supporting documentation.
- Appeal a denial. If the insurance plan denies coverage, you can appeal the decision. Contact your insurance plan directly to start the appeal process.
- Switch to a different Medicare Part D plan that covers your desired medication. If you are unhappy with your Part D plan you can switch to a different Part D plan or a Medicare Advantage plan during certain enrollment periods. Changes can be made during:
- Medicare Advantage Open Enrollment Period (January 1 – March 31)
- Annual Enrollment Period (October 15 – December 7)
- Special Enrollment Periods: Certain life events such as moving to a new state or losing your existing coverage can trigger a special enrollment period
Medicare Part D Out-of-Pocket Limit
As of 2025, the out-of-pocket costs for drugs covered by Medicare Part D are capped at $2,000. This limit will be adjusted annually. The spending cap replaces the previous system, in which high drug costs could reach a coverage gap (known as the Part D donut hole) before catastrophic coverage kicked in.
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Putting It All Together
Medicare Part D is prescription drug coverage offered through private insurance carriers. Each Part D plan has its own formulary and pharmacy network. Medicare Part D plans cover a wide range of prescription drugs, including generic and brand name medications. Consider consulting a licensed health insurance agent to learn more about your Medicare Part D options.
Sources
- Your Guide to Medicare Prescription Drug Coverage. Medicare.gov.
- Prescription drugs (outpatient). Medicare.gov.
- A Current Snapshot of the Medicare Part D Prescription Drug Benefit. KFF.
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