If you are enrolled only in Original Medicare (Parts A and/or B), you do not have coverage for majority of prescription drugs. Therefore, it is important to consider enrolling in a Medicare Prescription Drug Plan (Part D) to help cover the cost of your prescription drugs. You can get this coverage in one of two ways:
- Enroll in a stand-alone Medicare Prescription Drug Plan (PDP) offered by a private insurance company with a contract with Medicare.
- Enroll in a Medicare Advantage Prescription Drug Plan (MAPD), also known as Part C.
Things to Know About Prescription Drug Plans
Both PDPs and MAPDs are offered by private insurance companies contracted with Medicare. They must cover certain commonly prescribed drugs, but each plan decides which specific medications it will cover. When choosing a plan, be sure to check that your medications are included in the plan’s formulary, which is a list of drugs the plan covers. You can usually find this information on the plan’s website or by speaking with an insurance agent. You can also use our plan finder tool website to search for plans that cover your medications. Prescription medications are divided into tiers based on the cost of the drugs and usually there are four or five tiers. Plans decide which tier to assign each drug. Generic drugs are often in the lower tiers, while brand-name drugs are in higher tiers. Keep in mind that the list of covered drugs can change each year. If you need a drug that is not covered by your plan and you cannot switch to another plan, the plan may make an exception and cover the cost of the drug.
Limitations on Prescription Drug Coverage
There are some limitations on coverage that you should be aware of:
- Prior authorization: The plan may require your doctor to provide information about the medical necessity of a drug before it is covered.
- Step therapy: The plan may require you to try a lower-cost alternative drug before covering a more expensive drug.
- Coverage gap: This is also known as the “donut hole.” Once you and your plan have spent a certain amount on covered drugs, you may have to pay more for your prescriptions until you reach the annual out-of-pocket spending limit.