Medicare Part D prescription drug plans are administered by private insurers. Most Medicare Advantage (Part C) plans also provide medication coverage. The covered medications and costs can vary.

Part D plans provide the most comprehensive take-home prescription drug coverage. It covers the medications you may get at your local pharmacy, by mail order, or at other pharmacies.

Individual Part D plans offer different levels of coverage, and the plan you choose will determine your monthly payment.

Fees such as copayments, coinsurance, and deductibles are based on where you live, your income, and the medications you take.

Medication coverage differs from plan to plan. All Part D plans have a list of covered drugs called a formulary, which is a grouping of all the medications the plan covers.

When selecting a plan, be sure to list the medications you take or review the formulary to ensure your medications are included.

Medicare’s specific drug coverage rules

Medicare requires all plans to cover certain specific types of medications.

The first requirement is that plans cover at least two medications from the most commonly prescribed drug categories.

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

Medicare’s excluded drugs

Medicare does not cover certain medications like:

  • weight loss or weight gain medications
  • hair loss treatments
  • fertility medications
  • over-the-counter (OTC) medications, although some Medicare Advantage plans may include OTC benefits
  • dietary supplements

Medicare drug costs have been steadily increasing over the past decade. In the past few years, some of the most popular medications had price increases above the rate of inflation.

This matters because your coinsurance is a percentage of the list price of the drug you are purchasing, so if you take certain medications, your costs may be higher year to year as drug prices increase.

Also, if you live in different locations during the year, it’s important to choose a plan that allows you to fill your medications at any pharmacy. Some plans may restrict you to one pharmacy.

Medicare has a tool to help you choose a Part D plan based on your location and the medications you take. The tool helps you compare the coverage and costs of different plans in your area.

You’ll be asked several questions, including your ZIP code, the type of coverage you are researching, and the prescription medications you take.

Every Part D plan formulary has a tier system. Think of it as a pyramid. The medications at the bottom of the pyramid are less expensive, and the ones at the very top are the most expensive. Most plans have four to six tiers.

For example:

Medications on the tiers can differ for each plan, so it’s good to know where your medications fall within the tier system of the specific plan you are considering. Copays and coinsurance can also vary based on tier level.

Plans can change the medications they offer in their tiers. It’s important to check every year during annual open enrollment before you sign up for a Part D plan to be sure your plan still covers the medications you take.

In some cases, if your medication isn’t covered or if coverage is dropped for your medication, you can appeal to the plan for an exception.

You can either call the number on your card for your plan or use Medicare’s list of contacts who may help you.

Your prescribing physician may have to write a letter explaining the need for you to take the medication. There are five levels of appeal.

Each time you file an appeal, be sure to keep records for yourself. Add any additional information the plan may find helpful in making the decision to cover the medication.

Decisions about covering medications that aren’t on a plan’s formulary are made on an individual basis.

You can save costs with Original Medicare if you have a Medigap plan to help pay some of your out-of-pocket costs.

Depending on the medications you take, it’s a good idea to compare stand-alone Part D costs with Original Medicare and Medigap, and a Medicare Advantage plan that includes prescription drug coverage.

Note: Medigap plans only work alongside Original Medicare. You cannot have both Medigap and Medicare Advantage.

Medicare also has a program called Extra Help for people with limited income and resources or who need help paying their Part D costs. You may qualify if you meet income requirements, are on Medicaid, or meet other eligibility standards.

Some pharmaceutical companies offer medications at a reduced cost for people who qualify. If you’re having trouble paying for your prescription medication, try contacting the manufacturer to see if they have an assistance program.

Part D plans vary by location, and your costs will depend on the type of plan you choose, its formulary tiers, other out-of-pocket costs, and premiums.