Does Medicare Pay for Prescription Drugs?

Depending on what medications you’ve needed, you may already know that certain prescription drugs can be quite expensive. But, even if the medications you use are generic, if you have a chronic condition or need the medications for a long period, the costs can add up over time. Even though Medicare Part A and Part B don’t include prescription drug coverage, you may have the chance to lower your prescription drug costs through Part D.

What is Medicare Part D?

Medicare Part D is prescription drug coverage. You have the option of enrolling in a stand-alone Prescription Drug Plan (PDP) if you have Original Medicare. Or, as an alternative, you may choose to enroll in a Medicare Advantage plan that provides you with Part A, Part B, and Part D coverage. All Medicare Advantage plans are required to include the same benefits as Original Medicare, Parts A and B, but many plans offer extra benefits for little to no additional cost. 

How to choose prescription drug coverage

Medicare Part D plans are offered by private insurance companies, so costs and coverage can vary. Most Part D plans will have a monthly premium which may be based on your income. 

Each plan also determines its own tiers of pricing based on the category a drug falls into. Tier 1 includes generic drugs, while Tier 2 will usually include brand-name medications. The costs may be higher for non-preferred brand name drugs and specialty medications. 

Each PDP or Medicare Advantage plan with prescription drug coverage will have its own formulary, or list of covered medications. Even though drug plans are required to include a range of medications most commonly needed by Medicare recipients, they may vary. Before searching for prescription drug plans in your area, take an inventory of the medications  you currently require. Make a list of your medications and dosages and make sure any plans you’re considering will include those drugs. Compare plans with the help of an online plan comparison tool, and if you have questions or need help narrowing down your options, speak to a licensed sales agent. 

When can you sign up for Medicare Part D?

If you are new to Medicare, you’ll want to think about enrolling in Part D coverage during your Initial Enrollment Period. When you qualify at 65 for Medicare, you’ll have a 7-month enrollment period that begins three months before your 65^th birthday, continues during your birthday month, and ends three months later. If you wait until this period ends, and you don’t have other creditable drug coverage, you may have to pay late enrollment penalties. If you have creditable drug coverage through an employer or group when you’re first eligible for Medicare and want to delay enrollment in Part D, you may qualify for a Special Enrollment Period when you lose that coverage later on.