Medicare Part D Prescription Drug Coverage: What Is & Isn't Covered
Reviewed by: Brett Braithwaite, Licensed Insurance Agent
Medicare Part D is private insurance that covers genericA generic drug is an approved prescription drug that has the same active-ingredient formula as a brand name drug and is usually offered at a lower cost. and brand-nameBrand name drugs are prescription drugs sold under a specific name or trademark. They have the same active ingredients as generic drugs but usually cost more. drugs
Your Medicare Part D coverage depends on your policy and how your insurer classifies the drugs you need, among other things
Part D coverage has rules to ensure medication is safe and necessary
While Medicare Prescription Drug Plan (Part D) is drug coverage for all Medicare beneficiaries, not all prescription drugs are covered equally. On this page, we’ll help answer some vital Part D questions. What is Medicare Part D coverage? What drugs are covered by Medicare Part D? What are drug tiers?
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Medicare Part D offers prescription drug plans that cover both generic and brand-name drugs. Each policy has a standard level of coverage and its formulary lists. Prescription drug costs and availability may vary based on your Part D plan, insurer and location. All plans must offer the same drug categories, but drug brand names vary based on the formularies.
You can get Medicare Part D coverage by:
- Adding standalone Medicare Part D coverage to your Original Medicare (Part A and B) benefits
- Enrolling in a Medicare Advantage plan that includes Part A, B and D
The Rules: What does Medicare Part D coverage mean for you?
Some Medicare Part D plans have specific coverage rules to ensure safety with your prescriptions. [i] For this reason, there are some guidelines around Medicare Part D coverage you’ll want to know about:
Drug use and safety rules for some medications require prior approval and documentation before Part D will cover it. You can apply for an exception if your healthcare provider believes you must be on that medication.
Some Part D plans require you to try a generic or less expensive drug on their formulary before going up a “step” to brand-name or more costly drugs.
You can request an exception through your plan if your healthcare provider believes:
- You need the more expensive drug for medical reasons
- You may experience adverse side effects from the less expensive drug
- The less costly drug could be less effective for your condition
There may be a limit on the number of drugs covered over a period of time for some Part D plans. This could mean you can only get a 30-day supply for certain prescriptions. However, your healthcare provider can request an exception if you need a higher dosage.
There are standard drug types that all Part D prescription coverage plans must offer. By law, there must be at least two Medicare Part D drugs covered in most categories.
Medicare Part D coverage also must cover nearly all types of medication in the six most essential categories:
- Anticonvulsants (for seizure disorders)
- Cancer drugs
- HIV/AIDS drugs
Part D coverage must include all commercially available vaccines unless covered under Medicare Part B. You can find the full list of vaccines covered by Part D in your plan’s drug list. There may be additional costs based on the type of vaccine and where you receive it.
Are you eligible for cost-saving Medicare subsidies?
Like Part A and B benefits, Medicare Part D covers medications that your doctor and insurance company deem medically necessary. That means Part D prescription coverage plans generally do not cover medications for:
- Weight loss or weight gain
- Cosmetic purposes (including hair growth)
- Fertility purposes
- Over-the-counter drugs
- Drugs for erectile dysfunction
- Drugs covered by Original Medicare (Part A and B)
Medicare Part D organizes different prescription drug lists by “tiers.” The tiers generally represent different costs, ranging from the lowest copays to the highest.
Tier 1 has the lowest copay for generic drugs.To receive approval from the Food and Drug Administration, generic drug makers must prove that their product performs the same way as the corresponding brand name drug. Generic drugs use the same active ingredients as brand name drugs to achieve desired results.
Tier 2 has a medium copay for preferred brand name drugs. Preferred brand name drugs are medications manufactured by one manufacturer that are typically lower-cost among all brand name drugs. This is partly because these medications have been in the market for some time and are widely accepted.
Tier 3 has a higher copay for non-preferred brand name drugs that are new to the market. Non-preferred brand name drugs tend to cost more. You may have heard the term “designer drugs.” These high-cost drugs fall into the same category.
Specialty Tier has the highest copay for the very highest-cost drugs.
What would Medicare cover if I didn’t have Medicare Part D?
Part A and Part B offer minimal prescription drug coverage. Part B covers drugs administered in an outpatient or medical setting. These can include different injectable drugs and medications used with durable medical equipment. [i] Drugs you can take yourself, with a few exceptions, tend to fall under the standard Part D guidelines spelled out above.
You have a choice when selecting your prescription drug plan. Gather all the information you need, including your medications and doses, before you start comparing plans.
Ask yourself the following questions:
- Which plans cover the prescription drugs I need?
- How much will my monthly premiums, annual deductible, and coinsurance or copayments be?
- Which plan offers the best price for all of my medications?
- Which pharmacies are in-network?
- Will there be a late enrollment penalty because I waited to join?
What extra benefits and savings do you qualify for?
Few things can gum up your Medicare Part D coverage like not understanding how to pay for your prescriptions. Part D has a unique deductible structure that includes an Annual Deductible, Initial Coverage, Coverage Gap (donut hole), and Catastrophic Coverage. Knowing what they are and how they work will let you know what to expect from your Part D payments.
You can request an exception if your doctor prescribes a medication that is not on your Part D plan’s list if you don’t have any other drug coverage.
Yes, your plan’s formulary can change. This usually happens if drug therapies change or new drugs become available. Drugs may be immediately removed if the Food and Drug Administration (FDA) finds them unsafe. Your plan will notify you of any changes to its drug list. Your plan must give you written notice at least 30 days before the change happens, or you request a refill.
Yes. If you have Part D, Medicare-approved vaccines are covered when given by a pharmacist. In fact, it may even be easier than getting a vaccine from your doctor; you may have to pay upfront for a vaccine given by your doctor and file a claim with your Part D insurer for reimbursement.