Medicare Part D

Medicare Part D, also known as the prescription drug coverage plan, can be administered through a standalone plan or a Medicare Advantage Plan. With Part D, you have the opportunity not to pay full price, or pay at all, for your medication.

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What is covered by Medicare Part D?

Every plan that offers coverage through Part D must provide a standard level of coverage listed in a formulary list. The formulary is expected to have at least two drugs per drug category. It’s important to note that the formulary may not provide coverage for the exact prescription you need, but there should be a similar drug. 

If you feel the formulary list does not provide you with the drug coverage you need, you can ask for an exception. A formulary exception is a decision made by the plan to determine if coverage should be given for a drug that is not on the formulary list. Your doctor must provide a statement supporting the request for coverage and explain the medical reasoning behind the exception.

Medicare Part D costs

Premium costs depend on the plan you choose and where you live, but the nationwide premium in 2020 is $30. If you select a plan that has a deductible, your prescriptions will not be paid until you pay the full deductible amount. The highest deductible that can be charged by any plan in 2020 is $435, but it is possible to find a plan that does not charge a deductible. 

You also may be responsible for paying a copayment or coinsurance. There are copay tiers within each plan, which places each drug at a different level, with each level having a copayment or coinsurance amount. The copay tiers are listed in order from the lowest-cost drug to the highest:

  • Tier 1: Generic 
  • Tier 2: Preferred 
  • Tier 3: Non-preferred
  • Tier 4: Specialty 

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Do I need to enroll in Part D?

Enrolling in Part D is optional, but for some, it may be necessary to cover drug costs. If you don’t enroll in Part D when you first become eligible but want to sign up later, you will face a permanent penalty charge. The penalty will be added to your monthly Medicare premium for as long as you have prescription drug coverage through Medicare.

You will be automatically enrolled in Medicare Part A and Part B the month you turn 65. If you do not receive Social Security benefits, then you will need to sign up for Medicare. You can do so online at, by calling them at 1-800-772-1213, or in person at your local Social Security Office.