Medicare Part D is an optional United States federal-government program that helps Medicare beneficiaries pay for self-administered prescription drugs. It was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006. Under the program, drug benefits are provided by private insurance plans that receive premiums from both enrollees and the government. Part D plans typically pay most of the cost for prescriptions filled by their enrollees, and plans are later reimbursed for much of this cost through rebates paid by manufacturers and pharmacies.

Each Part D plan has its own formulary, which is a list of covered drugs. Medicare drug coverage typically places drugs into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost, with a drug in a lower tier generally costing less than a drug in a higher tier. All Medicare drug plans generally must cover at least two drugs per drug category, but plans can choose which drugs covered by Part D they will offer. If a plans formulary does not include a specific drug, a similar drug should be available. If a beneficiary or their prescriber believes none of the drugs on their plan’s formulary will work for their condition, they can ask for an exception.

To get prescription drug coverage, beneficiaries can join a Medicare drug plan, a Medicare Advantage Plan, or another Medicare health plan with drug coverage. If a beneficiary has other types of drug coverage, they should read all the materials they receive from their insurer or plan provider and talk to their benefits administrator, insurer, or plan provider before making any changes to their current coverage. Joining a Medicare drug plan may affect a beneficiarys Medicare Advantage Plan. If a beneficiary joins a Medicare Advantage Plan, they will usually get drug coverage through that plan. If a beneficiary is in a Health Maintenance Organization, HMO Point-of-Service plan, or Preferred Provider Organization, and they join a separate drug plan, they will be disenrolled from their Medicare Advantage Plan and returned to Original Medicare.

The cost of Part D varies depending on the plan and the beneficiarys income. Most people only pay their Part D premium, but if a beneficiarys income is above a certain limit, they will pay an extra amount in addition to their plan premium (sometimes called “Part D-IRMAA”). The extra amount costs by income are listed on the Medicare website. If a beneficiary has to pay a higher amount ...