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What Does Medicare Part D Cover?

Medicare Part D is a program that provides protection against the high cost of prescription drugs, and it was designed to help Medicare beneficiaries with their outpatient out-of-pocket costs for prescription drugs.

A Medicare Prescription Drug Plan provides Medicare beneficiaries with drug coverage through government-approved insurers, and enrolling in it is entirely voluntary, as laid out in the Medicare and You Handbook (the official U.S. government Medicare Handbook)

While legally only enacted in 2006, the drug benefit itself, like all Medicare additions, actually dates back to 1965, when the program was created by President Johnson. It was later expanded upon, though not without considerable criticism from Republicans who argued that it is fiscally irresponsible for the government to cover prescriptions for a segment of the population that historically has been self-reliant (the elderly) and whose numbers are inevitably going up as time moves on.

Before the Part D coverage was implemented, some of the hospital and doctor's office prescription drugs were covered with the Part A and Part B Medicare plans. On 1/1/2006, after the passing of the MMA act of 2003, which introduced the MAPD plan, the Part D plan coverage was initiated.

What are the Benefits of Medicare Part D?

Part D helps people supplement their traditional Medicare coverage with extra assistance in the form of "pharmaceutical savings" or regular discounts on medications when they fill their prescriptions at participating pharmacies through two main sources: stand-alone prescription drug plans (PDPs) and Medicare Advantage Plans (MAPDs).

The benefits of Medicare Part D include coverage for:

  • A wide range of prescription drugs in each plan formulary, including most prescription drugs in certain protected classes (HIV/AIDS, Cancer) and preferred, non-preferred brand-name, generic, and very high-cost medication through typically 5 Tiers. However, Part D does not cover all prescriptions

  • Covering a percentage of the retail cost a person pays of expensive brand name prescription drugs in the coverage gap or donut hole is 25%. For example, people who take insulin or asthma inhalers can pay substantially more for their prescriptions than they would in the initial coverage phase.

The covered drugs must be prescribed, FDA approved, and a medical necessity.

What does Medicare Part D NOT Cover?

Some examples of drugs that are not covered by Part D include:

  • Drugs for cosmetic purposes, appetite stimulants, and sleep aids.

  • Over-the-counter medications (even if they are prescribed by a physician).

  • Drugs used for the treatment of obesity or weight gain.

  • Drugs used for fertility purposes.

  • Cough and cold medications that are only prescribed to relieve symptoms without a medical indication.

  • Drugs that are not available in the U.S. market or have limited availability on the U.S. market at the time of Part D contract bidding.

  • Drugs that are covered by the beneficiary's Medicare Part A or Part B insurance.

When Can You Enroll in Medicare Part D?

You can enroll in Medicare plans during your IEP or during AEP ( annual election period Oct 15th to Dec 7th each year.

The annual election period for Part D coverage occurs from October 15 to December 7. Medicare beneficiaries may apply for a change in their plan anytime during this period, but coverage doesn't start until January 1 of the following year.

Enrollment is also extended when certain life events take place, such as loss of health care coverage, moving out of the coverage area, having a change in income to become eligible for assistance programs, also known as SEP or Special Enrollment Period.

Medicare Part D remains one of the most widely used prescription drug programs in the United States. It's also a significant program for people who qualify for it. To see if you qualify for it, you'll need to meet certain factors:

  • Being a citizen of the United States or being a permanent resident

  • It is available to anyone who is enrolled in Medicare Part A or Medicare Part B.

What is the difference between Medicare Part C and Part D?

Medicare Part D is a program that helps cover prescription medications. It exists alongside Medicare's other parts, like the Original Medicare and the Medicaid state program.

On the other hand, Medicare Part C is an option that you can take instead of the original Medicare Part A and B which is administered through the government. When you enroll in Part C you combine part A, B, and usually part D into one plan (Part C) which is then administered through a private insurance company instead of the federal government. You get cost assistance by possibly lowering or avoiding deductibles, copays, and coinsurance when visiting doctors for medical services like yearly checkups, dental care, and other medical needs. *

The difference between these two types of coverage is what they are actually covering. With Medicare Part D, you are just getting your drug coverage through an insurance company, but with Medicare Part C, both drug coverage and health coverage through an insurance company.

What is the Coverage Gap or Donut Hole?

Medicare Prescription drug coverage has 4 phases and works the same whether you receive it through a Part C or a Part D plan. There are 4 phases to this coverage:

  • Phase 1 - Deductible Phase (Maximum in 2022 is $480/ year)

  • Phase 2 - Initial Coverage Phase (You pay Copay/Coinsurance until retail cost of prescriptions filled reaches $4,430)

  • Phase 3 - Coverage Gap

  • Phase 4 - Catastrophic Phase

After surpassing the initial coverage phase, beneficiaries enter a period known as the coverage gap, or 'the donut hole.' In the coverage gap phase, you'll pay 25% of the retail cost for your prescriptions until you reach the next threshold, called the “Catastrophic Coverage” limit.

For 2022 plans, people will pay 25% of the retail cost in the donut hole until their total out of pocket cost reaches $7,050. After this amount has been reached, this is when the catastrophic phase begins, during this phase a person pays no more than 5% of the retail cost of prescriptions.


Medicare Part D is a valuable resource and a widely used prescription drug program in the United States that helps to cover the costs of prescription medications for those who qualify. Finding the most cost effective drug plan is very confusing. We use software that compares all available drug plans based on your own unique prescriptions. It gives us a detailed cost summary of what you can expect to pay for monthly premiums, deductibles, and copays so that you can determine the most inexpensive option available. Please contact us for help in finding the best Medicare Plan option for your own unique needs.

Thank you for visiting our website to learn more about Medicare Part D. If you need more information about how to make sure you are getting the best plan for your needs, we are here for you. Our Certified Medicare Guides will help you with everything from understanding your coverage to choosing the best plan for your needs. Thanks for reading, and we hope this article has been useful to you!

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