Medicare Part D

Medicare Part D

Medicare Prescription Drug Coverage

Medicare Part D plans assist with covering the costs of prescription drugs. Having Medicare drug coverage can help you lower prescription drug costs.

Insurers offering Medicare prescription drug plans release a list of covered drugs each year called a formulary. Most of the prescription drug plans place drugs in different “tiers” on their formularies. Each tier denotes a different cost for the drugs within that tier.

Signing up for a Medicare Part D Plan

Once you have enrolled in Medicare Part A and Medicare Part B you are now eligible during Medicare’s Initial Enrollment Period (IEP) to sign-up for Medicare prescription drug coverage.

There is a 7-month window during Medicare’s Initial Enrollment Period (IEP) to sign up for Medicare prescription drug coverage however you must first be enrolled in Medicare Part A and Part B.

Medicare Part D Plan Costs

Medicare prescription drug costs will vary depending on the plan you choose and the cost of the medication you take. You may move through four different phases of costs each calendar year:

  • An annual deductible
  • An initial coverage period
  • A coverage gap (also referred to as the Donut Hole)
  • A catastrophic coverage

These phases will repeat each calendar year so for instance, if you are in the donut hole at the end of the calendar year, full coverage will begin again on January 1st of the following year.

Medicare Part D and Other Health Coverage

Medicare prescription drug coverage does work with other forms of health insurance. However, it is always best to consult with your insurance carrier to determine which coverage suits your needs best. You will not pay a penalty if you enroll in a private drug plan at a later time as long as you have not been without your “creditable” coverage for more than 63 days.

If you carry both Medicare Part D and other coverage, there are rules set in to determine which carrier will pick-up the coverage.

If you have the following insurance coverage you may consider enrolling in a Medicare prescription drug plan:

  • Employer or Union Health Coverage
  • Medicare supplemental policy (link to medicare supplement page)
  • Medicaid
  • Supplemental Security Income Benefits
  • State Pharmaceutical Assistance Program
  • Long-term Care Facility
  • HUD Housing Assistance
  • Food Stamps


What are formularies?

Medicare prescription drug formularies are a list of drugs your insurer covers. Each insurer releases its own list of covered drugs each year that are covered under the plan.

When can I switch or drop my current Medicare drug plan?

Medicare beneficiaries can change their Medicare prescription drug once a year during Medicare’s Annual Enrollment which is from October 15th thru December 7th.

Is there a late enrollment penalty for Medicare Part D?

Medicare prescription drug plan’s late enrollment penalties are slightly more difficult as a result of the fluctuation of the premiums. Individuals are fined anytime they go a period of 63 days or more without a Medicare Part D plan or a similar coverage approved by Medicare. The actual penalty is calculated by multiplying 1% of the national base beneficiary premium by the number of months you were eligible but did not enroll

Some Medicare advantage plans include prescription drug coverage