Medicare Part D Explained

Discover the best Medicare Part D plan for your needs with our expert agency’s personalized guidance. Our free consultation service meticulously evaluates your current medication requirements against all available Part D plans in your state, ensuring you make an informed decision. We excel in comparing copays, deductibles, and most importantly, your total annual out-of-pocket costs, to identify the plan that offers you the utmost advantage for your prescriptions. Unlike other agencies, we devote significant time to understanding your drug coverage needs because we know how vital Part D is for seniors and Medicare consumers.

What Is a Medicare Part D, and how does it work?

Medicare part D supplement plan is a federal program offered through private insurance carriers to provide drug coverage to consumers on Medicare.

2 ways to get drug coverage:

What Drug Plans Cover:

How does a Medicare Part D plan work?
Medicare part D is considered by many the most confusing part of Medicare. Since most people take a few prescriptions and we generally take prescriptions on a daily basis it is important to understand how it works.

Medicare sets a standard model for the insurance carriers to follow and that is why most plans look very similar. In the first phase most part D plans have a deductible phase. If you do not know what a deductible is? Basically it is the dollar amount set by the insurance company that you must pay before they start to pay. With most part D plans you will find that they cover drugs on tiers. Each tier represents a different cost sharing, so depending on which tier your drug falls on will decide how much each drug costs you. Typically plans have 4-5 tiers and the higher the tier the more expensive the drug. The majority of plans have some kind of drug deductible however the deductible will normally apply only to drugs labeled tier 3 or higher. Tier 1 and tier 2 drugs are generally common generic drugs and you should be able to get them without paying any deductible. Once you have met your plans deductible amount you will have copays or coinsurance to pay for all of your covered prescriptions.

Phase Two

This is considered the initial coverage phase; this is when your plan starts sharing prescription costs with you either in the form of a copayment or coinsurance. Usually the coverage phase extends to a point where retail cost of medication reaches 4,340.00 Once you meet this amount you start the next phase of coverage known as the coverage gap aka the Donut Hole.

Phase Three

During this phase you will receive a 75% discount on all covered drugs. This can be very expensive particularly for tier 3-5 drugs . This phase lasts until an individual has paid 7,050 at this point you enter the final stage of coverage. (There are some plans that cover generic drugs during the coverage gap)

Phase four

This phase is called catastrophic coverage phase and in this phase prescription cost comes down to around 5% of the retail cost. This phase lasts until the end of the calendar year.
Fortunately most people on Medicare never leave phase two, for those that do it can be quite expensive.

If you want to stay out of the coverage gap it is always a good idea to speak with your doctors about taking generic options when possible. Many drug manufacturers also offer prescription assistance for many of their expensive drugs and there are a few states that have off state pharmaceutical assistance programs that can help with costs.

When enrolling in Medicare Part D, the prescription drug coverage component of Medicare, there are several key points to consider to ensure you choose the most suitable plan for your healthcare needs and budget. Here’s what you need to know:

1. **Eligibility and Enrollment Periods:** You are eligible to enroll in a Medicare Part D plan if you are already enrolled in Medicare Part A and/or Part B. You can enroll in a Part D plan during the Initial Enrollment Period (IEP) when you first become eligible for Medicare. Additionally, there’s the Annual Enrollment Period (AEP), which typically runs from October 15 to December 7 each year, during which you can review and change your Part D plan.

2. **Types of Part D Plans:** Part D plans are offered by private insurance companies approved by Medicare. There are standalone Part D plans that work alongside Original Medicare (Parts A and B), and there are also Medicare Advantage plans that include Part D prescription drug coverage (MA-PD plans).

3. **Formulary and Drug Coverage:** Each Part D plan has a formulary, which is a list of covered prescription drugs. Formularies can vary significantly between plans, so it’s essential to check whether your specific medications are included and at what cost. Make sure your essential medications are covered and that there are no significant restrictions.

4. **Pharmacy Network:** Part D plans may have preferred pharmacy networks where you can get your medications at lower costs. Verify that your preferred pharmacy is in the plan’s network to ensure you can access your medications conveniently.

5. **Premiums, Deductibles, and Copayments:** Part D plans come with premiums, deductibles, and copayments or coinsurance. Compare the costs of different plans to understand your out-of-pocket expenses for premiums and medications.

6. **Coverage Gap (Donut Hole):** Part D plans have a coverage gap, also known as the “donut hole.” This means that after reaching a certain spending limit on medications, you’ll be responsible for a higher portion of the drug costs until you reach the catastrophic coverage threshold. Take this into account when evaluating the overall cost of a plan.

7. **Late Enrollment Penalty:** If you don’t enroll in a Part D plan when you are first eligible and don’t have other creditable prescription drug coverage (e.g., from an employer or union), you may face a late enrollment penalty if you decide to enroll later. The penalty is added to your premium and can last as long as you have Part D coverage.

8. **Medication Changes:** Formularies can change annually, so it’s a good idea to review your plan’s Annual Notice of Change (ANOC) each fall to see if there are any changes that may affect your coverage or costs for the upcoming year.

9. **Plan Ratings and Reviews:** Medicare provides star ratings for Part D plans based on their quality and performance. Consider looking into these ratings and read reviews of different plans to get an idea of how well they serve their beneficiaries.

10. ** Resources:** The official Medicare website ( is an excellent resource for comparing Part D plans in your area, understanding costs, and finding helpful information on prescription drug coverage.

Before enrolling in a Medicare Part D plan, take the time to research and compare different options to find the plan that best meets your specific medication needs and budget. If you need assistance, consider reaching out to a Medicare agent or counselor who can provide personalized guidance based on your circumstances. Or if you want some expert help right away you can click the link and schedule a free consultation to discuss your personal Medicare situation. 

Medicare Part D Page Q & A

Does Original Medicare cover my prescriptions?

No original Medicare Part A & B do  not cover daily prescriptions that you get at the pharmacy.  Original Medicare will cover your medications taken while in the hospital, some vaccinations and infusions but not your daily medications.

How much will my Part D plan cost?

That really depends on a few things, most states will have twenty or so choices for Part D Plans and each one will have different premiums and out of pocket cost associated with them.

Currently in NY state there are 19 plans offered ranging between $10.90- $116.80

Will Medicare Part D cover all of my prescriptions?

Part D plans follow a formulary model from CMS (Center of Medicare & Medicaid Services) No plan will cover all drugs but each plan has to cover the minimum of two drugs in each therapeutic category. So you should be able to find a drug plan that covers the prescription you need. If you no one covers the necessary drugs you can file an appeal to have it covered by your plan.

Do I have to pay a deductible?

Many Part D plans will have a deductible in 2023 they can be as high as $505.00, but ot all plans have a deductible and many popular prescriptions can be purchased without having to meet a plan deductible.

What happens if I get a new drug prescribed in the middle of the year and my plan does not cover it.

If this happens you can do a few things, ask your doctor for a substitute that is covered. You can request a formulary exception. If they deny your exception you can file an appeal. Lastly you can change your plan if you have an enrollment period to do so.

What is the Medicare Part D penalty?

The Medicare Part D penalty occurs when someone who could have enrolled in Medicare Part D coverage but chooses not to enroll in a plan later. Those who enroll late will be assessed a life time penalty of 1% of the cost of the national average for a Part D drug plan for each month they were not enrolled.

What are drug tiers?

Drug tiers are simply the way that a Part D plan decides to classify their prescriptions. It is fairly typical for plans to have up to 5 tiers. Most plans Tier 1= preferred generic drugs tier 2 = non preferred generic drugs tier 3 = preferred brand names tier 4 non preferred brand name drugs and tier 5 = specialty drugs.

My doctor told me I should take vitamins to help with some conditions I have will my Part D plan help cover my vitamins?

NO most likely most Part D plans do not cover vitamins. The only one I see covered regularly if Vitamin D.