Medicare Part D

Medicare Part D is the prescription drug coverage component of the Medicare health program. It is offered by private companies, but applicants must first qualify for Medicare benefits. In spite of this, you can purchase Part D as a standalone plan or as part of the Medicare Advantage Plan, which was previously known as Part C.
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What Is Medicare Part D?

Prescription drugs are often covered under other Medicare parts, including Part A and B. Part D helps pay for the prescription drugs that are not already covered. When you sign up for Part D insurance, you still need to pay deductibles, copays and premiums. In turn, the federal government subsidizes the cost of medications by 75%. Not all Part D plans are equal, so be sure to shop around to ensure you get a good deal that meets your needs.

Outside of the tiers your drugs might fall into, there are several other factors that can drive costs up or down. Knowing these ahead of time can help you plan carefully with your doctor:

  • Coverage gaps, which are also called the donut hole
  • The plans available in the area you live in
  • The types of coverage you want
  • Your income levels (affects premium costs)
  • Whether you choose generic drugs

There are four main drug tiers to look out for when shopping for Part D insurance coverage. Pay close attention to where yours falls on a formulary, so you can budget costs:

Specialty Tier: These cover very expensive drugs and have the highest copayments.

Tier 3: These cover brand-name and non-preferred prescription drugs and attract a high copayment.

Tier 2: These cover brand-name and non-preferred prescription drugs and attract an average copayment.

Tier 1: These cover the vast majority of generic prescription drugs and copayments are usually quite low.

Companies may change their drug lists throughout the year, based on new developments in drug therapies or changes in FDA approvals. It is also not uncommon for them to replace brand-name drugs with generic versions, which are usually less expensive. 

When this happens, you can work with your doctor to determine which new drug may best meet your needs. If you cannot find a covered replacement, you might be able to pursue an exception or file an appeal. If these attempts are not successful and you continue to use the original drug, you pay full price.

The insurance provider also has a legal obligation to notify affected persons at least 30 days ahead of the change taking effect. Additionally, when you request a refill, it should provide written notice of the upcoming change and pay for at least another month’s worth of the drug in question.


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Are There Any Alternatives Worth Looking Into?

Before enrolling in Part D, spend some time researching and considering your options. These may depend on your current work situation, previous affiliations and other insurance provisions.

What Kind of Medication Does Part D Cover?

Part D plans must provide coverage for the wide span of prescription drugs taken by people who qualify for Medicare. Each plan pays for its own list of drugs and provides a formulary to show which ones are included. Some plans might separate drugs into tiers and each tier tends to attract different cost levels. It is fairly common for all plans to include a minimum of two drugs it believes are commonly prescribed across the board.

These are some examples of the types of drugs covered by part D prescription drug coverage:

Who Is Eligible for Part D Insurance Coverage?

Qualifying for Part D is a lot simpler than many other government benefits. This is because it generally depends on demographic or health factors that are fairly easy to prove. Consequently, eligibility is sometimes automatic. Here are some important factors that determine eligibility:


People 65 years or older tend to qualify. People under 20 may qualify if they have ESRD and at least one parent is eligible for Social Security benefits.


People who have been diagnosed with end-stage renal disease or may need a kidney transplant are usually eligible. People diagnosed with amyotrophic lateral sclerosis may also become eligible during the first month of receiving disability payments.


People who have already received Social Security Disability benefits for two years or more usually qualify.

The best time to make changes to a plan is during the open enrollment, each year. However, there are some life events that could trigger the need for a change. Thankfully, these also make you eligible for plan changes:
  • You plan to upgrade to a plan that carried a higher star rating.
  • You moved into a skilled nursing facility or a nursing home.
  • You moved to a new area that’s outside your coverage area.
  • Your current plan offers no Plan D options.
  • You lose medication coverage.
If your insurance provider switches out brand-name drugs you take for generic alternatives, you may worry about your health. Will the new drug work the same as the old one? According to the Medicare website, the FDA describes generic drugs as copies of their original brand-name forms. Under this definition, the generic drugs must share these same characteristics with the brand-name version:
  • Performance characteristics
  • Route of administration
  • Dosage and strength
  • Intended use
  • Quality
  • Safety
Note that, in some cases, there might not be an exact generic copy of the drug you take. However, there might be generic copies of other alternatives on the market. You can work closely with your health care provider to re-tailor your medication list to meet the new formulary restrictions.

Before you become eligible for Medicare, it’s a good idea to do some budgeting and retirement planning. This will help you determine how much you can spend on health care and what the odds are of needing better insurance coverage. While you can delay enrolment in Part D, you may be penalized. This could permanently drive up the cost of Part D, compared to other people.

Some people experience automatic enrollment in Medicare. If this is not the case for you, these are some good times to enroll:

  • Three months before and after your 65th birthday, as well as the month of the birthday
  • During open enrollment, which lasts from mid-October to the first week of December
  • During general enrollment from January 1 to March 31st
  • When you become eligible based on disability or health conditions

How Do People Enrol in Part D Coverage?

You will need to do your shopping in the private insurance market. Always ensure you look at plans that are compatible with your coverage area. This is especially important if you are mobile, such as if you snowbird, RV or both. To ensure we match you with plans in the right area, our plan comparison strategy starts with you entering your zip code.