What Is Medicare Part D?

Medicare Part D is a part of Medicare that helps people pay for prescription drugs. It’s available to anyone with Medicare. Private insurance companies offer Part D plans. You pay a monthly fee, called a premium, for coverage, and the amount can vary. There may also be some out-of-pocket costs, like co-pays or deductibles, depending on the plan you choose and the drugs you need. Part D will undergo significant changes in 2025, including a new payment plan option and a $2,000 out-of-pocket maximum cap.

How Medicare Part D Works

Medicare Part D is available to Medicare beneficiaries enrolled in Part A or Part B. It works similarly to standard insurance plans. You pay 澳洲幸运5官方开奖结果体彩网:monthly premiums, annual 𓆉deductibles, and other out-of-pocket costs for the plan. In exchange, you get Part D coverage for prescription drugs. 

Medicare enrollees can choose between two ways to get prescription drug coverage. Private insurance companies sell stand-alone Part D plans, which work with original Medicare (Part A and B). You ca♎n add, change, or drop enrollment in Part D plans in the future. 

According to the U.S. Centers for Medicare and Medicaid Services (CMS), Medicare enrollees will have access to an average of 15 stand-alone Part D plans per region in 2025. 

You can also get 澳洲幸运5官方开奖结果体彩网:Medicare Advantage from a private insurance company. These plans typically include Medicare Part D, Part A (hospital coverage), and Part B (physician coverage). Medicare Advantage plans may include other benefits like vision, hearing, and 澳洲幸运5官方开奖结果体彩网:dental care. 

With either Medicare Advantage or stand-alone Part D, yo💦u’ll have a list of in-network pharmacies where you can fill your prescriptions for the lowest prices. 

You can sign up for Medicare Part D during the initial enrollment period for Medicare, which lasts a few months before and after you turn 65. You can delay signing up if you have some other eligible drug coverage. If you don’t sign up for Medicare drug coverage on time and don’t have other drug coverage, you could pay 澳洲幸运5官方开奖结果体彩网:a late enrollment penalty for the remainder of your enrollment 🥀when you do sign up. This penalty is added to your premium as long as you have Med🤡icare.

What Part D Covers: Formulary or Drug List

Part D covers brand-name and generic medications. You’ll find the covered drug on your Part D plan’s formulary, or list of drugs it covers. If you take a drug that isn’t on the formulary, your plan may not reimburse you or cover any portion of tꦇhe drug cost. 

The plan’s formulary must include at least two drugs in 🍨commonly prescribed categories and cl🦄asses, but the plan can choose which drugs those are. As a result, plan formularies can differ by plan, and some plans may not cover the drugs you take.

Plans can have specific rules you must follow to get a medication covered. For example, you might need to try another medication first (a process known as step therapy), get approval from the plan beforehand (known as prior authorization), or be diagnosed with a specific 𒁃condition. These requirements can vary between plans. 

Some Part D or Medicare Advantage🍷 plans offer pharmacy discounts on over-the-counter and prescription medications. At participating pharmacies, you can show your member ID card to get discounts on these items. These might include store-branded health products, allergy medicines, skin treatments, multivitamins, and more. The discounts and items can vary depending on your plan.

What Part D Doesn’t Cover

Part D covers most drugs you’ll take at ho🐭me. However, if there are drugs you get at a doctor’s office or in a hospital outpatient setting, such as injected or transfused drugs, Medicare Part B covers 80% of the cost of these drugs, and you pay the other 20%. More than a dozen categories of drugs are covered by Part B instead of Part D, including:

• New Alzheimer’s medications
• HIV prevention drugs
• Intravenous and tube feeding
• Drugs used with an item of durable medical equipment (like an infusion pump or nebulizer)
• Transplant or immunosuppressive drugs 
• Oral cancer drugs 

You’ll also pay a separate deductible for some Part B drugs, and the new 2025 limits and benefits of Part D don’t apply to Part B drugs. 

Part D Premiums

You can deduct your Part D premiums from your Social Security check, like your Part B premiums. According to CMS, the average national stand-alone Medicare Part D premium will decrease from $53.95 per month in 2024 to $46.50 in 2025. 

However, a review of CMS data by the nonprofit health policy research organization KFF shows that this average obscures the fact that many insurers are increasing premiums.

If ✱you make more than $103,000 (individually) or $206,000 (married) based on your tax return from two years prior, you may need to pay an additional premium. This amount ranges from $12.90 to $81. If you do have to pay extra, Social Security will contact you. 

You probably won’t pay a separate premium if you have Part D through a 澳洲幸运5官方开奖结果体彩网:Medicare Advantage Plan. Instead, th🐎e premium is bundled into your Medicar❀e Advantage premiums.

The CMS projects the average premium in Medicare Advantage plans, including Medicare Advantage-Prescription Drug (MAPD) plans, to be $17 in 2025, reduced from an average of $18.23 in 2024. But an 澳洲幸运5官方🎶开奖结果体彩网:Investopedia an൲alysis of Part D changes found that average annual deductibles for MAPD deductibles are expected to more than double.

Three Phases of Part D Coverage

Starting in 2025, your Part D coverage experience will move through the three phases outlined below. These phases simplify and streamline the drug coverage process while capping out-of-pocket costs.

Deductible Phase

The deductible is the amount you pay before Medicare starts paying its portion. Deductibles vary in each Part D and Medicare Advantage plan, but the maximum deductible, set by the government, is $590 in 2025. Investopedia’s analysis of 2025 Part D plans shows the 💟average deductible is $466.49.

Some plans don’t have a deductible, and Investopedia’s research of 2025 Medicare Advantage with drug coverage found a lower average deductible at $306.10.

Initial Coverage Phase

After reaching your plan’s deductible, you are responsible for paying either a 澳洲幸运5官方开奖结果体彩网:copayment (a flat amount, such as $5 per prescription) or coinsurance (a percentage of the medication’s cost, such as 20%). You𒈔r Medicare plan pays the rest.

Your share of costs can depend on the🌸 medication’s price and the tier level assigned to your drug. These tiers can change throughout the year with notice.

Catastrophic Phase

Starting in 2025, you won’t pay more than $2,000 annually out of pocket for your covered medications once you’ve hit the out-of-pocket limit, including your copays and payments made on your behalf, such as through the Extra Help program.

After you reach the $2,000 limit, you pay nothing else for the year. However, your premiums (monthly payments for Part D plan or Medicare Advantage insurance) do not go toward the cap.

Requirements for Part D

To enroll in Part D, you must meet 澳洲幸运5官方开奖结果体彩网:Medicare eligibility requirements, including:  

• Have Medicare Part A (hospital Insurance) or Part B (medical Insurance)
• Live in the service area of the Medicare Advantage or Part D plan you want to join
• Be a U.S. citizen or lawfully present in the U.S.
• Complete an enrollment request during an enrollment period

Some people can postpone enrollment. If you have 澳洲幸运5官方开奖结果体彩网:creditable prescript♔ion drug 🧔coverage, you don’t have to enroll in Part D or pay late enrollment penalties in the future when it’s time to enroll. 

The government categorizes "creditable prescription drug coverage" as a plan paying at least as much as Medicare's standard prescription drug coverage. So, people covered by creditable plans (typically through an employer or 澳洲幸运5官方开奖结果体彩网:TRICARE/military health benefits) may choose not to enroll in Medicare Part D at that time.

Medicare Prescription Payment Plan

In 2025, Part D offers a new payment option for prescriptions. Instead of paying for medications when you pick them up at the pharmacy, you get a monthly bill from your Part D or Medicare Advantage pla꧋n. 

While you aren’t paying less overall, the plan ensures consistent monthly medication costs. The new payment plan is optional and free. If you wish to enroll, contact your Part D coverage provider for details. 

Enrolling in and Switching Part D Plans

To shop for and enroll i💦n prescription d🌊rug coverage, you can:

• Use the Medicare Plan Finder website to compare Part D and Medicare Advantage plans and medication coverage
• Enroll in a plan on the Part D or Medicare Advantage plan’s website or call the plan
• Call 1-800-MEDICARE (1-800-633-4227)

Most p𒉰eople enroll during the Initial Enrollment Period, which starts three months before you get Medicare and ends three months after you get Medicare.

If you don’t like your Part D plan and want to switch or drop the plan, you can do so during the 澳洲幸运5官方开奖结果体彩网:Open Enrollment Period between Oct. 15–Dec. 7. Your requested Part D change is effective on Jan. 1 of the following year.

How to Choose a Part D Plan

The 澳洲幸运5官方开奖结果体彩网:best Part D plan for you will depend on your needs. Use the Medicare Plan Finder Sit🔥e to compare Part D and Medicare Advantage plans with medication coverage. Don’t just consider whether a plan has a low (or even $0) premium. Also review: 

• The deductible you need to pay before coverage starts.
• Whether your drugs are included in the plan’s formulary, particularly if you take specialized medicines. 
• The monthly cost of your prescriptions, including generics. 
• Whether your preferred pharmacy is in the plan’s network.
• If you can fill prescriptions while traveling out of state. 
• If the plan requires prior authorization or other steps to get your medication.
  

Frequently Asked Questions (FAQs)

The Bottom Line

Medicare Part D helps pay for necessary and often life-saving medications, including drugs for chronic diseases and unexpected illnesses. New Part D changes in 2025 may make month-to-month costs more affordable and consistent. Research your Part D and Medicare Advantage with Part D options before and during open enrollment, when you can switch plans.