Medicare Part D prescription drug plans cannot be purchased as standalone coverage. To enroll in Medicare Part D, you must be enrolled in Medicare Part A and/or Part B. Medicare Part D provides prescription drug coverage that supplements Original Medicare, but it is not available independently without also having Part A or Part B.
What Is Medicare Part D?
Medicare Part D is the prescription drug coverage component of Medicare. It was enacted in 2003 under the Medicare Prescription Drug, Improvement, and Modernization Act to provide prescription drug benefits for Medicare beneficiaries. Medicare Part D helps cover the costs of prescription drugs for those enrolled in Original Medicare or Medicare Advantage plans.
Part D plans are offered by private insurance companies that have been approved by Medicare. These plans negotiate prices with drug manufacturers and pharmacies to offer prescription drug coverage to Medicare beneficiaries. Medicare Part D plans have a network of pharmacies that enrollees can use to get their prescriptions filled.
What Are the Benefits of Medicare Part D?
There are several key benefits to enrolling in Medicare Part D prescription drug coverage:
- It helps pay for prescription drug costs. This includes brand-name and generic prescription medications. Part D plans have a formulary that lists which drugs are covered.
- It provides protection from high drug costs. Medicare Part D has catastrophic coverage that kicks in once your out-of-pocket drug costs hit a certain threshold ($7,400 in 2023). After this point, you only pay a small coinsurance or copayment on covered drugs.
- It offers coverage when traveling. Medicare Part D plans provide nationwide coverage, meaning your prescriptions will still be covered when traveling within the United States.
- It helps coordinate benefits. If you have other insurance that covers prescription drugs, enrolling in Medicare Part D can help coordinate those benefits.
- There are no income limits. All Medicare beneficiaries who want drug coverage can enroll in Part D regardless of income level.
Having prescription drug coverage provides important financial protection and improves access to medications for Medicare beneficiaries.
What Are the Eligibility Requirements for Medicare Part D?
To enroll in a Medicare Part D prescription drug plan, you must first meet the basic Medicare eligibility requirements:
- You are 65 years or older.
- You are under 65 but have a qualifying disability.
- You have end-stage renal disease (ESRD).
In addition, to enroll in Medicare Part D, you must be enrolled in Medicare Part A and/or Part B. This means you must have either Original Medicare or a Medicare Advantage plan to add drug coverage under Part D.
If you have Medicare but have not yet enrolled in Part D, you may add it during your Initial Enrollment Period when first eligible for Medicare. You can also make changes and add Part D during the annual Open Enrollment Period from October 15 to December 7 each year. Changes start on January 1 of the next year.
There may also be opportunities to enroll in Part D if you qualify for a Special Enrollment Period due to certain life events like moving or losing other creditable prescription drug coverage.
Can I Have Just Medicare Part D Without Medicare Parts A and B?
No, you cannot enroll in standalone Medicare Part D coverage without also being enrolled in Medicare Part A and/or Part B. The prescription drug plans under Medicare Part D are designed to provide coverage in conjunction with the medical benefits provided by Part A and Part B.
Part D supplements the coverage gaps in Part A and Part B by adding prescription medication expenses. It coordinates with and cannot be purchased separately from the Original Medicare program.
If you do not want to enroll in Original Medicare, you still must have either Part A or Part B to gain eligibility for Part D coverage. Another option is to enroll in a Medicare Advantage Prescription Drug plan, which bundles all Medicare benefits (Parts A, B, and D) into one plan offered by private insurers.
But Medicare Part D on its own, without also having Part A and/or Part B, is not available. The parts of Medicare work together to provide comprehensive coverage.
What Are the Costs of Medicare Part D?
Although having prescription drug coverage under Medicare Part D provides significant financial protection, there are still costs involved:
- Monthly premiums – The Part D base premium in 2023 is $34.50 on average, but plan premiums can vary. Higher income beneficiaries pay more.
- Deductible – This is the amount you pay out-of-pocket before coverage kicks in. The standard Part D deductible is $505 in 2023.
- Copayments or coinsurance – These are the amounts you pay at the pharmacy counter for your covered prescriptions after you meet the deductible. Copays are usually a set amount while coinsurance is a percentage.
- Coverage gap – Most Medicare Part D plans have a coverage gap phase after you and your plan have paid a certain amount ($4,660 in total drug costs in 2023). In the coverage gap, you pay 25% of costs for brand-name and generic drugs.
- Catastrophic coverage – Once your true out-of-pocket costs hit $7,400 for the year in 2023, you enter the catastrophic coverage phase where you only pay a small coinsurance or copay for covered drugs for the rest of the year.
Are There Any Alternatives to Medicare Part D?
If you have Medicare but want to get prescription drug coverage outside of Part D, you have a few options:
- Employer or union coverage – If you have drug benefits through an employer or retiree group health plan, you may be able to waive Part D enrollment. Make sure this coverage is “creditable” or similarly comprehensive.
- Veterans benefits – Those who receive prescription medications through the VA health system can opt out of Medicare Part D in most cases.
- TRICARE – Military retirees with TRICARE may not need supplemental Part D since TRICARE has pharmacy coverage.
You cannot enroll in individual marketplace health plans instead of Medicare Part D. But if you have drug coverage through current employment, COBRA, Tricare, or VA benefits, you may be able to waive Part D without penalty.
What Are the Penalties for Not Enrolling in Medicare Part D?
If you do not sign up for Medicare Part D when first eligible and you don’t have other creditable drug coverage, you may face a late enrollment penalty if you enroll later. Here’s how it works:
- Premium penalty – Your monthly premium will be increased by 1% for every month you delayed Part D enrollment after initial eligibility. This penalty stays on your record as long as you have Part D.
- Longer wait to enroll – If you want to sign up after your Initial Enrollment Period, you may have to wait until the next Open Enrollment Period to join which starts in October. Coverage begins the following January.
- Risk of no coverage – Without Part D or other creditable coverage, you may be forced to pay 100% of drug costs out-of-pocket. This could be very expensive.
Unless you have qualifying employer or military coverage, it is generally recommended to enroll in Medicare Part D when first eligible to avoid future penalties. Make sure to compare plans annually during Open Enrollment to ensure you have proper coverage.
What Are the Best Medicare Prescription Drug Plans?
The best Medicare Part D prescription drug plan for you depends on your specific medications and preferred pharmacy. Every year, plans can change their premiums, covered drug lists, and pharmacy networks. Here are some tips for picking top plans:
- Use the Medicare Plan Finder – This tool lets you enter your medications and compare estimated annual costs across plans in your area.
- Consider national providers – Large national insurers like Aetna, Humana, and UnitedHealthcare offer consistent coverage across the country.
- Compare formulary coverage – Make sure your prescription drugs are all covered on the plan’s formulary and check any restrictions.
- Check preferred pharmacies – Does the Part D plan include your local pharmacy in-network to minimize copays?
- Evaluate added benefits – Some plans provide additional perks like transportation services and gym memberships for no extra cost.
- Focus on total yearly costs – Consider your expected prescription refills for the year and total estimated spending, not just monthly premiums.
How Can You Compare Medicare Part D Plans?
The Medicare Plan Finder tool on Medicare.gov is the best way to compare Part D prescription drug plans in your state. Follow these steps:
- Enter your zip code and Medicare number to pull up available plans in your location.
- Select the prescription drugs you take including dosage and quantity.
- Choose preferred pharmacies like local drugstores or national chains.
- Compare the estimated annual drug costs for each plan. This factors in monthly premiums, deductibles, copays and total spending.
- Filter and sort plans by lowest yearly cost, highest customer rating, lowest deductible and other attributes important to you.
- Verify formulary coverage and restrictions for each medication under the preferred plans.
- Confirm the pharmacy network and which tier each of your drugs falls under using the plan details.
- Enroll in the Part D plan with the lowest total estimated costs and best coverage for your prescriptions before the deadline.
Using the Medicare Plan Finder ensures you select the optimal Part D plan based on your total drug costs and pharmacy preferences. Do comparisons annually during Open Enrollment.
What Are the Coverage Options for Medicare Part D?
The standard Medicare Part D benefit structure offers different levels of prescription coverage:
- Deductible – You pay 100% of drug costs until reaching the $505 deductible in 2023.
- Initial coverage – After meeting the deductible, you pay 25% of costs while the plan covers the other 75% until $4,660 in total drug spending for the year.
- Coverage gap – In this stage, you pay 25% of prescription costs with the plan covering the remaining 75% until you reach $7,400 in true out-of-pocket costs.
- Catastrophic coverage – Once your spending hits the $7,400 threshold, you enter this final phase and pay only 5% of drug costs or a small copay for the remainder of the plan year.
However, many Medicare Part D plans offer enhanced coverage with lower deductibles, flat copays for tiered medications rather than coinsurance, coverage in the gap, and other additional benefits.
When comparing plans in your area, look closely at the coverage specifics and total estimated costs with your prescription drug needs in mind.
What Is the Difference Between Medicare Part D and Medicare Advantage?
Medicare Part D refers specifically to stand-alone prescription drug plans that work alongside Original Medicare. Medicare Advantage plans (Part C) are offered by private insurers as an alternative to Original Medicare. Here are some key differences:
- Prescription drug coverage – Both Medicare Part D plans and most Medicare Advantage plans include prescription drug benefits. But Part D can only be added to Original Medicare while drug coverage is bundled into Medicare Advantage.
- Costs – Medicare Advantage plans have maximum out-of-pocket limits while Part D coverage under Original Medicare does not cap costs. But Medicare Advantage may have higher premiums.
- Providers – Part D just covers medications while Medicare Advantage plans include medical benefits and have provider networks. Original Medicare has no network restrictions.
- Enrollment – You can enroll in Part D during your Initial Enrollment Period and the Open Enrollment Period. Medicare Advantage has more limited enrollment periods.
- Travel coverage – Part D coverage applies nationwide while Medicare Advantage is regional.
When choosing coverage, consider your budget, drug needs, preferred doctors, and health status. Medicare Part D and Medicare Advantage offer different approaches to obtain prescription drug benefits.
In summary, Medicare Part D provides important prescription drug coverage to Medicare beneficiaries as a supplement to Original Medicare plans. While you cannot enroll in standalone Part D, having this coverage in conjunction with Medicare Parts A and B allows for comprehensive medical and pharmacy benefits. Comparing plans annually can help Medicare enrollees find affordable drug coverage that suits individual health needs and medications.