Medicare Part D prescription drug plans cover many take-home medications. Stand-alone Part D plans work with Original Medicare, but most Medicare Advantage plans also include Part D coverage.

Choosing the right Medicare plan is important. With different coverage options, copayments, premiums, and deductibles, figuring out your best option can take time.

Medicare is the government-funded health insurance plan for people ages 65 years and older in the United States. It has several parts that cover different types of health and medical costs. Part D is Medicare’s take-home prescription drug coverage.

Medicare Part D prescription drug plans help pay for medications not covered under Original Medicare’s Part A or Part B.

The federal government pays 75% of medication costs under Part D. But not all plans cover all medications, and you still have to pay premiums, copays, and deductibles.

Coverage and rates can vary based on the plan you choose. It’s important to check all the options before choosing a Medicare Part D plan.

Fast facts about Medicare Part D

  • It’s a prescription medication benefits plan for people who are eligible for Medicare.
  • You must be enrolled in either Medicare Part A or Part B to be eligible.
  • Medicare Part D coverage is optional and is administered by private insurance companies.
  • You must enroll in Part D between October 15 and December 7.
  • Part D coverage is not automatic, and late enrollment penalties may apply.
  • Medications covered are plan-specific and based on its formulary (list of covered drugs).

Medicare requires all plans to cover certain specific medication types.

Medicare drug coverage requirements

The first requirement is that plans must cover at least two medications from the most commonly prescribed drug categories. Examples of these could be medications for high blood pressure (hypertension) or high cholesterol (hypercholesterolemia).

The second requirement is that all Part D drug plans must cover most of the following six drug classes:

Most plans also cover the majority of vaccines with no copay.

A Part D plan can change the medications or pricing on its coverage list at any time for several reasons.

For example, if a generic version of a brand-name drug becomes available, a plan might add this medication to its formulary. The price of the brand-name medication may also change if a generic becomes available.

A Part D plan might also update its formulary if a new medication has become available or new data arises about this treatment or medication.

As of January 1, 2021, if you take insulin, your insulin could cost $35 or less for a 30-day supply. Use Medicare’s plan finder tool to compare Medicare Part D plans and insulin costs in your state. You can enroll in a Part D plan during open enrollment (October 15 through December 7).

What isn’t covered by Medicare Part D?

Stand-alone part D plans generally don’t cover over-the-counter (OTC) medications. This includes:

  • vitamins
  • supplements
  • cosmetic and weight loss medications

Some Medicare Advantage (Part C) plans may include benefits for OTC medications. Part C is an alternative to Original Medicare that bundles the offerings of parts A and B.

Prescription drugs not covered by Medicare Part D include:

  • fertility drugs
  • medications used to treat anorexia or other weight loss or gain when these conditions aren’t part of another diagnosis
  • medications prescribed solely for cosmetic purposes or hair growth
  • medications prescribed for the relief of cold or cough symptoms when these symptoms aren’t a part of another diagnosis
  • medications used to treat erectile dysfunction

If you’re eligible for Medicare, you’re eligible for a Part D prescription drug plan. To be eligible for Medicare, you must:

  • be age 65 years or above
  • be under age 65 years and have received a diagnosis of end stage renal disease (ESRD) or kidney failure and need to have dialysis or a kidney transplant
  • have received Social Security disability payments for at least 2 years, although this waiting period is waived if you receive a diagnosis of amyotrophic lateral sclerosis (ALS) (in which case, you will be eligible the first month you receive a disability payment)
  • be under age 20 years with ESRD and have at least one parent eligible for Social Security benefits

You can enroll in a Medicare Part D plan during initial enrollment for Medicare parts A and B. If your prescription drug plan doesn’t meet your needs, you can change your plan option during open enrollment periods, which occur twice throughout the year.

You can enroll:

  • if you’re eligible before you’re 65 years old, due to a disability or specific health condition
  • during initial enrollment, which runs for 7 months, starting 3 months before your birth month, continuing throughout your birth month, and ending 3 months after
  • during the open enrollment period, which runs annually between October 15 and December 7
  • during the general enrollment period, which also runs annually between January 1 and March 31

Special enrollment periods allow you to join, leave, or switch plans in specific circumstances. You could be eligible if you:

You can also change plans during open enrollment each year.

Costs depend on the plan you choose, coverage, and what you’ll have to pay out-of-pocket. Other factors that affect what you may pay include:

  • your location and plans available in your area
  • type of coverage you want
  • your income, which can determine your premium

New coverage cap replaces the donut hole

Previously, when a person with Medicare Part D coverage reached a certain amount of out-of-pocket costs, they would enter a coverage gap known as the donut hole.

While in the donut hole, the person was responsible for 100% of the costs of their prescription drugs until they reached the set limit and entered catastrophic coverage.

As of 2025, the donut hole has been replaced with an out-of-pocket spending cap. When someone with Part D reaches $2,000 of out-of-pocket expenses, they automatically enter catastrophic coverage. This means they pay nothing for their prescriptions for the rest of the year.

Costs also depend on covered medications and levels, or tiers, on a plan’s drug list. The cost of your medications will depend on which level your medications fall under. The lower the level, the lower the copay and cost. Generic medications also typically cost less.

Here are a few examples of estimated monthly premium costs for Medicare Part D coverage:

  • New York: $3.70 to $93.10
  • Atlanta: $0 to $100
  • Dallas: $0 to $89.20
  • Des Moines, IA: $0 to $97
  • Los Angeles: $1.80 to $124.80

In 2025, no Part D plan may have a deductible higher than $590.

What is the average cost of a Medicare Part D plan?

For stand-alone Part D plans, the Centers for Medicare & Medicaid Services (CMS) projected the average total Part D premium to decrease from $53.95 in 2024 to $46.50 in 2025.

That said, your specific costs will depend on where you live, the plan you choose, and the prescription medications you’re taking.

Is Medicare Part D deducted from Social Security?

You can deduct Part D from your Social Security benefits, but you’ll need to contact the company that administers your plan to set it up.

What is the Medicare Part D prescription drug plan late enrollment penalty?

The Part D late enrollment penalty is 1% for each month you could have enrolled in a Part D plan but chose not to or did not have other creditable coverage, multiplied by the national base beneficiary premium. In 2025, the national base beneficiary premium is $36.78.

So, if you did not have coverage for 10 months, your penalty would be $36.78 x 0.10 = $3.68. This is then rounded to the nearest 10 cents, making your penalty $3.70.

The penalty is then added to your monthly premium amount for the duration of your enrollment.

Here are a few points to remember when choosing a plan:

  • Rules for switching plans: You can switch drug plans only during certain times and under certain conditions.
  • Options for veterans: If you’re a veteran, TRICARE is the VA plan and is generally more cost-effective than a Medicare Part D plan.
  • Employer-based prescription plans: Check to see what’s covered by your employer’s healthcare plans to determine out-of-pocket costs compared with a Part D plan.
  • Medicare Advantage plans: Some Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) Medicare Advantage plans cover costs for parts A, B, and D. They may also pay for dental and vision care. Remember, you’ll still have to enroll in parts A and B.
  • Premiums and out-of-pocket costs can vary: You can compare plans to see which offers you the best coverage for your specific medication and healthcare needs. Medicare Advantage plans might have network doctors and pharmacies. Check to make sure your healthcare professionals are in the plan’s network.
  • Medigap plans: Medigap (Medicare supplemental insurance) plans help pay for out-of-pocket costs not covered by Original Medicare. If you bought your Medigap plan before January 1, 2006, you might have prescription medication coverage, too. Since this date, Medigap no longer offers medication coverage.
  • Medicaid: If you have Medicaid, when you become eligible for Medicare, you’ll be switched to a Part D plan to pay for your medications.

Questions to ask

When deciding on a Part D plan, keep these points in mind:

  • Are the medications I’m currently taking covered?
  • What is the monthly cost of my medications on the plan?
  • How much do medications that are not covered on the plan cost?
  • What are the out-of-pocket costs: copay, premium, and deductibles?
  • Does the plan offer extra coverage for any high cost drugs?
  • Are there any coverage limits that might affect me?
  • Do I have a choice of pharmacies?
  • What if I live in more than one place during the year?
  • Does the plan offer multistate coverage?
  • Is there a mail-order option?
  • What is the plan’s rating?
  • Is there customer service with the plan?

Medicare Part D is an important part of Medicare benefits. Choosing the right plan can help keep costs in check.

Once you choose a plan, you must stay in it until the next open enrollment period, which starts on October 15. It’s important to choose a good plan that works for your needs.

Review your costs and options carefully when choosing the best Part D plan for your medication needs. Organizations like the State Health Insurance Assistance Program (SHIP) can help you with this decision, even when deciding to switch between plans.