What Does Part D Cover?

Medicare Part D is prescription drug coverage offered by private insurance companies approved by Medicare. It covers brand-name and generic medications based on the plan's formulary (drug list).

Part D is available as a standalone plan (for people on Original Medicare) or bundled into a Medicare Advantage plan (called MA-PD).

The 4 Coverage Stages

Part D plans have four cost-sharing stages. Where you are in these stages determines how much you pay for your prescriptions.

1

Deductible

You pay full price until you meet the plan's annual deductible (up to $590 in 2025).

2

Initial Coverage

You pay copays or coinsurance. The plan pays the rest. This is the standard coverage period.

3

Coverage Gap

Formerly the "donut hole." Under the Inflation Reduction Act, costs are significantly reduced in this phase.

4

Catastrophic

After reaching the out-of-pocket threshold, you pay little to nothing for covered drugs.

How to Choose a Part D Plan

  • Check the Formulary: Make sure your medications are on the plan's covered drug list — and check which tier they're on (lower tier = lower cost).
  • Pharmacy Network: Confirm your preferred pharmacy is in the plan's network. Using out-of-network pharmacies can cost significantly more.
  • Compare Total Costs: Don't just look at premiums. Factor in deductibles, copays, and your estimated annual drug costs for a true comparison.
  • Star Ratings: Medicare rates plans 1–5 stars. Higher-rated plans tend to offer better service and coverage reliability.

We run your medication list through every available plan to find the one with the lowest total annual cost — it's part of our free service.

💡 Extra Help / Low-Income Subsidy (LIS)

If you have limited income and resources, you may qualify for Extra Help — a Medicare program that pays part or all of your Part D premiums, deductibles, and copays. To see if you qualify, call Social Security at 1-800-772-1213 or contact us for help.

Part D with Medicare Advantage vs. Standalone

  • Medicare Advantage (MA-PD): Drug coverage bundled into your MA plan. Convenient, but you're limited to that plan's formulary and pharmacy network.
  • Standalone Part D: Pairs with Original Medicare + Medigap. More flexibility in choosing your drug plan independently from your medical coverage.

Frequently Asked Questions

If you go 63+ days without creditable drug coverage, you may face a permanent late enrollment penalty — 1% of the national base premium per month you were without coverage, added to your premium for life.

Yes, during the Annual Enrollment Period (Oct 15 – Dec 7). This is actually recommended — drug plan formularies and costs change every year, so what was best last year may not be best this year.

The coverage gap still exists structurally, but thanks to the Inflation Reduction Act, out-of-pocket costs in the gap have been significantly reduced. Starting in 2025, there's a $2,000 annual out-of-pocket cap on Part D spending.

Every Part D plan publishes a formulary. We'll run your complete medication list against all available plans to find the best coverage at the lowest cost — it's part of our free service.