What Is Medicare Part D Prescription Drug Coverage?

Medicare Part D is optional prescription drug insurance for people with Medicare. It's included with most Medicare Advantage plans, but people with Original Medicare need to sign up for a stand-alone Part D plan for drug coverage.

Medicare Part D plans are sold by private health insurance companies. Different plans come with different coverage, premiums, out-of-pocket costs, pharmacy networks and more. You can find this information in each plan’s formulary. It’s important to shop around to find the best fit.

There are two ways to get Medicare Part D prescription drug insurance.

1. Add Medicare Part D to Original Medicare.

Original Medicare (Part A and/or Part B) typically doesn’t cover prescription drugs. Instead, you buy a stand-alone Medicare Part D plan if you want prescription drug coverage.

You can shop for your choice of stand-alone plans, which vary in terms of cost and coverage. You’ll pay a separate premium for the Part D plan.

2. Get Medicare Part D as part of Medicare Advantage.

Medicare Advantage, sometimes called Medicare Part C, is a bundled alternative to Original Medicare. It's sold by private health insurance companies. Medicare Advantage plans cover the same benefits as Part A and Part B, and most of them also include Part D benefits.

If you have Medicare Advantage, you generally can’t buy a Medicare Part D plan. (There are exceptions for certain Medicare Advantage plans that don’t include their own prescription drug coverage.)

» MORE: Medicare Part C vs. Part D: What’s the difference?

Medicare Part D plans must meet minimum coverage standards set by the federal government. Plans have to cover certain categories of drugs, such as drugs to treat asthma or high blood pressure. And within each category, they have to cover at least two distinct drugs^[0]

All Medicare Part D plans must cover a variety of prescription drugs, including most drugs within these six protected classes, according to Medicare.gov:

• HIV/AIDS drugs.

• Cancer drugs.

• Antidepressants.

• Antipsychotics.

• Anticonvulsants.

• Immunosuppressants for organ transplants.

Medicare Part D plans must also cover all drugs that have gone through Medicare prescription drug price negotiation.

But Medicare Part D plans don’t cover every drug. Each plan has a list of the drugs it covers, called a formulary. The formulary places drugs into tiers with different out-of-pocket costs. For example, Tier 1 and Tier 2 drugs may cost less and include generic and preferred brand-name drugs. Tier 3 and Tier 4 may come with higher copays and include non-preferred and specialty drugs.

If you or your health care provider believe that you need a specific drug that your Medicare Part D plan doesn’t cover, you can ask for an exception^[0]

What Medicare Part D doesn’t cover

Certain drugs are excluded from all Medicare Part D coverage by law. Some of these include:

• Over-the-counter drugs.

• Drugs used for anorexia, weight loss or weight gain.

• Drugs used for cosmetic purposes or hair growth.

• Drugs used for symptomatic relief of coughs and colds.

• Barbiturates.

• Benzodiazepines.

• Vitamins and minerals (except prenatal vitamins and fluoride preparations).

Most Medicare Part D plans have premiums and some combination of deductibles, copays and coinsurance. The average monthly premium for Medicare Part D plans is $38 in 2025, according to NerdWallet analysis of data from the Centers for Medicare & Medicaid Services^[0]

People with particularly high incomes pay an income-related monthly adjustment amount, or IRMAA, on top of their monthly premiums^[0]

» MORE: How much does Medicare Part D cost?

Medicare Part D copays and coinsurance

There are three phases of Medicare Part D coverage. The phase you’re in depends on how much you’ve spent out-of-pocket for covered prescription drugs over the course of the year.

Here are the three phases and their associated costs^[0]

Phase 1: Deductible

Your plan won’t start to pay for your covered drugs until you meet the annual deductible. Part D plan deductibles can range from $0 to $590 in 2025 ($0 to $615 in 2026), with most falling on the high end. You enter the next phase when you hit the deductible.

Phase 2: Initial coverage

During this phase, you pay copays or coinsurance for covered drugs. These depend on where the drug falls in your plan’s formulary.

Generic prescription drugs often come with a median copay of $0 to $5. Brand-name drugs usually come with a median coinsurance of 20% to 40% depending on whether they’re preferred or non-preferred ^[0]

You enter the next phase when out-of-pocket costs for covered prescription drugs reach a total of $2,000 in 2025 ($2,100 in 2026).

Phase 3: Catastrophic coverage

You pay nothing out of pocket during this phase. Once you’ve reached the annual cap on out-of-pocket costs — $2,000 in 2025 ($2,100 in 2026) — you won’t owe additional copays, coinsurance and/or deductibles for covered drugs for the rest of the year.

If you have limited income, you may qualify for a Medicare program called Extra Help. This program can help you pay for Medicare Part D premiums and drug costs. With Extra Help, you’ll pay a $0 premium and a $0 deductible as well as reduced copays and coinsurance.

You’ll be enrolled in Extra Help automatically if you have full Medicaid coverage, receive Supplemental Security Income (SSI) or get state government help paying for Part B premiums. You can also qualify if you’re below certain income and resource limits, but you’ll have to apply.

Starting in 2025, there’s a new way to pay for out-of-pocket costs for Medicare Part D: the Medicare Prescription Payment Plan. With this option, instead of paying out-of-pocket at the pharmacy, you split your out-of-pocket costs up and pay them over time as monthly bills^[0]

All Medicare Part D plans must offer the Medicare Prescription Payment Plan as an option, and there’s no cost to participate. You won’t save money, either — it only changes how you pay, not what you owe.

If you’re interested, contact your Medicare Part D plan by phone or visit its website to sign up.

If you take costly medications, Medicare Part D coverage is almost certainly worth it. Without Part D coverage, you have to pay full price for prescription drugs, which can be prohibitively high.

Even if you don’t take prescriptions now, you may need to in the future. If you wait until you need it to sign up for Medicare Part D, you may face permanent late enrollment penalties. You can always sign up for the cheapest plan during your initial enrollment period and switch plans during fall open enrollment if you need better coverage later on. In many states, you can get a $0-premium plan.

If you have a Medicare Advantage plan with prescription drug coverage, that coverage is included in the plan’s premium, so you don’t need to get a separate Part D plan.

Initial enrollment period

You can enroll in a stand-alone prescription drug plan (Medicare Part D) or a Medicare Advantage plan that includes Part D prescription drug coverage during the initial enrollment period. This is the seven-month period starting three months before the month you turn 65, including your birthday month and ending three months after your birthday month^[0]

Note: If your birthday is the first day of any month, your seven-month initial enrollment period begins earlier, starting four months before you turn 65 and ending two months after your birthday month. So a July 1 birthday has an initial enrollment period of March to September.

» MORE: Medicare eligibility calculator

Special enrollment period (if you qualify)

A special enrollment period is your chance to sign up for Medicare coverage even though it’s not your initial enrollment period or an open enrollment period. If you lose current coverage, such as creditable prescription drug coverage from an employer, you might qualify for a special enrollment period^[0]

Special enrollment periods generally last for two months. For example, a two-month special enrollment period would start the month after your employment ends or the month after losing your qualifying employer insurance, whichever happens first.

If you sign up during the special enrollment period, you can avoid owing late enrollment penalties.

Medicare Part D late enrollment penalty

If you don’t enroll during the initial enrollment period and you don’t have “creditable prescription drug coverage,” you'll likely pay a late enrollment penalty. Creditable prescription drug coverage is coverage from your or a spouse’s employer or union that pays on average at least the same amount as Medicare standard drug coverage^[0]

» MORE: Medicare late enrollment penalty calculators

Open enrollment period

You can join or switch to a different Medicare Part D or Medicare Advantage plan during the fall open enrollment period for Medicare and Medicare Advantage, which runs from Oct. 15 through Dec. 7 every year.

If you have a Medicare Advantage plan, there’s another opportunity during Medicare Advantage open enrollment, which runs from Jan. 1 to March 31 each year. During Medicare Advantage open enrollment, you can switch plans or switch to Original Medicare with the option to buy a stand-alone Medicare Part D plan.

Start by using the Medicare plan finder tool to estimate costs and find a Medicare Part D plan that covers your prescriptions. Consider medications you might need in the future.

Compare monthly premiums and estimated out-of-pocket costs across plans in your area. You can also use the plan finder tool to compare Medicare Part D and Medicare Advantage plans available to you.

Talk to your health care providers about brand-name and generic medications to look for, and ask about alternatives if your medications aren't covered.

Plans can change often, so you might want to shop around each year. Your insurer should send you a Notice of Plan Change when the formulary changes. If plan changes affect the prescription drugs you need, you can switch plans during Medicare's open enrollment period, Oct. 15 to Dec. 7. Changes go into effect on the following Jan. 1.