Medicare Part D is one of the four different Parts of Medicare. It provides prescription drug coverage and is sold through private insurance companies. Each Part D plan will also vary in coverage and cost.

How Does Part D Work?

Part D has a list of medications it covers, and offers lists for each category of medication types. Your plan’s list of covered medications is known as a formulary. While plans differ in what they cover, all plans must cover two medications within protected classes. They must also cover all prescriptions in specific categories: immunosuppressants, anticonvulsants, antipsychotics, antidepressants, anticancer, and HIV/AIDS drugs.

Your plan has two goals in mind – get you the best medications, and enable you to purchase those medications at the lowest possible cost. Medicare Part D arranges medication costs according to the tiers they fall under. Tiers reflect cost according to whether the medication is a brand name, if it’s preferred, or if it’s a specialty drug. They are numbered 1-4, and get increasingly more expensive the higher the tier is.

Tier 1 consists of generic and preferred medications. Tier 2 consists of brand names, but they’re also considered preferred. Tier 3 is made up of non-preferred brand name medications, and Tier 4 consists of specialty drugs (making it the most expensive of all).

What Are The Costs?

Because of it being sold exclusively through private insurers, not every policy’s costs are the same.

Regardless of the plan, you will have these expenses:

• Coinsurance
• Copayments
• Premiums
• Deductibles

Your plan determines all of these costs. While monthly premiums vary, you can expect to pay an amount close to the national base beneficiary premium, which is $33.06 as of 2021. Yearly deductibles are also different, but you will not have to pay any more than $445 in any Part D plan.

If you qualify for Extra Help, you’ll pay no more than $3.70 per generic medication and $9.20 for each brand name drug covered in the formulary.

You can get Extra Help if:
You are single and have less than $19,140 in yearly income with resources under $14,610
You are married with less than $25,860 in annual income, with resources being less than $29,160

When Can I Get Part D?

You can join Medicare Part D during one of the following times:

Initial Enrollment, which begins three months before the month you turn 65 and ends three months following the month you turn 65
Annual Enrollment, which is from October 15 to December 7
Special Enrollment. This is when you lose creditable prescription drug coverage. When this happens, you have two months to join without incurring a late enrollment penalty