What is Medicare Part D?

Medicare Part D is a prescription drug plan offered by private companies that contract with Medicare. Medicare Part D is optional, but it is a good idea to consider enrolling if you take prescription drugs.

Medicare Part D plans have monthly premiums, which vary by plan. You may also have to pay copayments or coinsurance for covered drugs.

Medicare Part D plans have coverage gaps, called “donut holes.” The donut hole is a period of time when you have to pay more for your prescription drugs. The donut hole starts after you and your plan have spent a certain amount of money on covered drugs. In 2023, the donut hole starts after you and your plan have spent $4,435 on covered drugs.

Once you reach the donut hole, you will pay 25% of the cost of covered drugs until you reach the catastrophic coverage phase. In 2023, the catastrophic coverage phase starts after you and your plan have spent $7,050 on covered drugs. In the catastrophic coverage phase, you will pay only 5% of the cost of covered drugs.

If you have a low income, you may qualify for Extra Help, which can help you pay for your Medicare Part D costs. To qualify for Extra Help, you must have an income below certain limits and have limited assets.

You can enroll in a Medicare Part D plan during your Initial Enrollment Period, which is the 7-month period that starts 3 months before you turn 65 and ends 3 months after you turn 65. If you miss your Initial Enrollment Period, you may be able to enroll during a Special Enrollment Period if you have certain life events, such as moving to a new area, losing your job, or getting married.

It is important to compare Medicare Part D plans carefully before you enroll. You can compare plans on the Medicare website or by talking to a Medicare counselor.

Here are some things to consider when comparing Medicare Part D plans:

  • Cost: Medicare Part D plans have monthly premiums, which vary by plan. You may also have to pay copayments or coinsurance for covered drugs.
  • Coverage: Medicare Part D plans have different coverage levels. Some plans have broader coverage than others.
  • Formulary: Medicare Part D plans have different formularies, which are lists of covered drugs. Some plans have more drugs on their formulary than others.
  • Prescription drug costs: Medicare Part D plans have different prescription drug costs. Some plans have lower costs than others.
  • Extra Help: If you have a low income, you may qualify for Extra Help, which can help you pay for your Medicare Part D costs.

Once you have compared plans and chosen a plan, you will need to enroll in the plan. You can enroll in a Medicare Part D plan online, by phone, or by mail.

If you’re not sure which Medicare Part D plan is right for you, you can talk to a Medicare counselor. Medicare counselors can help you compare plans and choose a plan that meets your needs.

Medicare Part D is a good option for many people with Medicare. Medicare Part D plans offer prescription drug coverage, and they can often be less expensive than paying for prescription drugs out of pocket. If you take prescription drugs, be sure to compare Medicare Part D plans carefully and choose a plan that meets your needs.