Learn about Medicare Part D
What is a standalone Medicare Part D plan?
Get help covering the cost of your prescription drugs. A standalone Medicare Part D prescription drug plan can help pay for your medication. You can also get prescription drug coverage as part of a Medicare Advantage plan.
You must live in the service area of the Part D plan to enroll, and some plans will have a network of pharmacies they work with. With prescription drug coverage, in addition to costs varying by plan and provider, your costs may be different based on if a pharmacy is considered in-network or out-of-network, as well as if your drugs are separated into different cost levels, or tiers.
Note for Veterans:
People who have benefits through the Veterans Affairs may be able to get prescription drug coverage through the VA and may not need Medicare drug coverage. Talk with your VA benefits administrator before making any decisions.
What do Medicare Part D plans cover?
Medicare Part D prescription drug plans cover the following:
- Types of drugs most commonly prescribed for Medicare beneficiaries as determined by federal standards
- Specific brand-name drugs and generic drugs included in the plan's formulary (list of covered drugs)
- Commercially available vaccines not covered by Part B
It is important to note that while Medicare Part D plans are required to cover certain common types of drugs, the specific generic and brand-name drugs they include on their formulary varies by plan. You will need to review a plan's formulary to see if the drugs you need are covered.
What is not covered by Medicare Part D plans?
The drugs you take may not be covered by every Part D plan. You need to review each plan’s drug list, or formulary, to see if your drugs are covered. The following will not be covered:
- Drugs not listed on a plan's formulary
- Drugs prescribed for anorexia, weight loss or weight gain
- Drugs prescribed for fertility, erectile dysfunction, cosmetic purposes or hair growth
- Prescription vitamins and minerals
- Non-prescription drugs (e.g., over-the-counter medications)
- Drugs that are already covered by Medicare Part A and Part B
View prescription drug plans available in your area
What should I know about a plan's drug list?
Medicare Part D and Medicare Advantage plans have a drug list (also called a formulary) that tells you what drugs are covered by a plan. Medicare sets standards for the types of drugs Part D plans must cover, but each plan chooses the specific brand-name and generic drugs to include on its formulary. Here are some important things to know:
- A plan's drug list can change from year to year.
- Plans can choose to add or remove drugs from their drug list each year. The list can also change for other reasons. For example, if a drug is taken off the market. Your plan will let you know if there's a coverage change to a drug you're taking.
- Many Part D plans have a tiered formulary.
How does a tiered formulary work?
Many plans have a tiered formulary where the plan's list of drugs are divided into groups (tiers) based on cost. In general, drugs in low tiers cost less than drugs in high tiers. Additionally, plans may charge a deductible for certain drug tiers and not for others, or the deductible amount may differ based on the tier.
Formulary tiers:
| Tier | Cost |
|---|---|
Tier 1 | $ |
Tier 2 | $$ |
Tier 3 | $$$ |
Tier 4 | $$$$ |
Tier 5 | $$$$$ |
What does it mean if my prescription drug has a requirement or limit?
Plans have rules that limit how and when they cover certain drugs. These rules are called requirements or limits. You need to follow the rules to avoid paying the full cost of the drug out-of-pocket. If you do not get approval from the plan for a drug with a requirement or limit before using it, you may be responsible for paying the full cost of the drug. If needed, you and your doctor can also ask the plan for an exception.
Here are the requirements and limits you may see on a drug list:
PA – Prior authorization
If a plan requires you or your doctor to get prior approval for a drug, it means the plan needs more information from your doctor to make sure the drug is being used and covered correctly by Medicare for your medical condition. Certain drugs may be covered by either Medicare Part B (doctor and outpatient health care) or Medicare Part D (prescription drugs) depending on how they are used. If you don't get prior approval, the plan may not cover the drug.
QL – Quantity limits
The plan will cover only a certain amount of a drug for one copay or over a certain number of days.
ST – Step therapy
The plan wants you to try one or more lower-cost alternative drugs before it will cover the drug that costs more.
B/D – Medicare Part B or Medicare Part D coverage determination
Depending on how they're used, some drugs may be covered by either Medicare Part B (doctor and outpatient health care) or Medicare Part D (prescription drugs). The plan needs more information about how a drug will be used to make sure it's correctly covered by Medicare.
LA – Limited access
If a drug is considered "limited access," the FDA has said the drug can be given out only by certain facilities or doctors, not at a network pharmacy.
MME – Morphine milligram equivalent
Additional quantity limits (see above) may apply across all drugs in the opioid class used for the treatment of pain. The MME is designed to monitor safe dosing levels of opioids, especially for individuals who may be taking more than one opioid drug for pain management.
7D – 7-day limit
An opioid drug used for the treatment of acute pain may be limited to a 7-day supply to minimize long-term opioid use.
DL – Dispensing limit
Drugs with dispensing limits are limited to a one-month supply per prescription.
Covered insulin costs
For Chronic Special Needs plans in 2025, you will pay a maximum of $25 for each 1-month supply of Part D covered insulin drug through all coverage stages until the Catastrophic Coverage stage, when you will pay nothing.
For all other plans in 2025, you will pay a maximum of $35 for each 1-month supply of Part D covered insulin drug through all coverage stages until the Catastrophic Coverage stage, when you will pay nothing.
What does Medicare Part D cost?
Like Medicare Advantage plans, Part D standalone plans will also vary in costs based on the plan you choose. Each plan negotiates prices with drug manufactures and pharmacies. Your copays and coinsurance rates are based on these prices and on guidelines set by Medicare. You can find explanations of specific drug costs in each Part D plan's Summary of Benefits or Evidence of Coverage materials.
Your total prescription drug costs will also be impacted by the number of prescriptions you take, how often you take them, if you get them from an in-network or out-of-network pharmacy, and what Part D coverage stage you are in. Your costs may also be less if you qualify for the Extra Help program.
First, let's look at what kinds of costs you could pay for Part D, then dive into the different coverage stages and how they work.
Costs you could pay with Medicare Part D
With standalone Part D plans, you will pay a monthly premium and may also pay an annual deductible, copays and coinsurance.
- Some plans charge deductibles, some do not, but Medicare sets a maximum deductible amount each year. In 2024, the annual deductible limit for Part D is $545. For 2025, that amount will change to $590.
- Copays are generally required each time you fill a prescription for a covered drug. Amounts can vary based on the plan’s formulary tiers as well as what pharmacy you use if the plan has network pharmacies.
- Some plans may also set coinsurance rates for certain drugs or tiers. In this case the plan charges a percentage of the cost each time you fill a prescription.
Understanding Part D coverage stages in 2025
During the year, you may go through different drug coverage stages. There are three stages, and each can affect your prescription drug costs. You may not go through all the stages. People who take few prescription drugs may remain in the Annual Deductible stage or move only to the Initial Coverage stage. People with many medications (or expensive ones) may move into the Catastrophic Coverage stage.
The coverage stage cycle starts over at the beginning of each plan year, usually January 1.
Annual Deductible
For Part D plans with a deductible, you pay the full cost for drugs until you reach the deductible amount. Then you move to the Initial Coverage stage.
For Part D plans without a deductible, this stage doesn’t apply. Your coverage starts in the Initial Coverage stage.
- $590 is the maximum deductible amount Part D plans can charge in 2025.
Initial Coverage
In this stage, you pay a copay or coinsurance for your prescription drug and the plan pays the rest.
Once you (and others on your behalf) have spent $2,000 in drug costs in 2025, you move into the Catastrophic Coverage stage.
Catastrophic Coverage
When your out-of-pocket costs reach $2,000 in 2025, you enter the Catastrophic Coverage stage.
- You stay in this stage for the rest of the plan year. You pay nothing for Medicare Part D covered drugs. For excluded drugs covered under any enhanced benefit, you pay a cost share.
- Total drug costs: the amount you (or others on your behalf) and your plan pay for your covered prescription drugs. Your plan premium payments are not included in this amount.
- Out-of-pocket costs: The amount you (or others on your behalf) pay for your covered prescription drugs. Your plan premiums are not included in this amount.
See how Medicare costs may work with these Medicare coverage examples
How the Inflation Reduction Act (IRA) affects Part D coverage
The federal Inflation Reduction Act includes support for people with Medicare coverage. Changes include:
- Insulin available at $35/month per covered prescription
- Access to vaccines covered by Part D and recommended by the Advisory Committee on Immunization practices (ACIP) without cost-sharing
- Expansion of the low-income subsidy program (LIS or “Extra Help”) under Medicare Part D to 150% of the federal poverty level starting in 2024
- A yearly cap ($2,000 in 2025) on out-of-pocket prescription drug costs in Medicare
- Fewer coverage stages: Deductible (if included in the plan), Initial Coverage and Catastrophic Coverage. No more Coverage Gap or "donut hole."
- Medicare members with Part D coverage can spread their prescription drug out-of-pocket costs into monthly payments over the course of the plan year
Learn more about Medicare Part D and the Inflation Reduction Act
Tips for saving on prescription drugs
- Know the plan's drug list (formulary). Make sure your medication is on a plan's drug list. If it's not, check with your provider to see if there's one on the drug list you can switch to.
- Ask if your plan provides a 1-month supply of covered insulin prescriptions for $35 or less.1
- Consider generics. Ask your provider about generic or low‑cost options to replace higher-tier or more expensive drugs.
- Show your member ID card. Be sure to show your member ID card when filling prescriptions to get any member cost savings.
- Use the mail order pharmacy. Convenient home delivery of your regular, maintenance medications can save time and money.
- Order 90-day supplies. You may be able to save on prescription drug costs by ordering 90-day supplies. Some plans may offer 100-day supplies.
- Use a preferred network pharmacy. Many plans offer cost savings if you fill your prescriptions at a pharmacy that's part of the plan's preferred network.
- Use a specialty pharmacy to help manage more chronic or complex conditions. Specialty pharmacies, like Optum Specialty Pharmacy, provide extra support through expert care and personalized connections.2
1You will pay a maximum of $35 for each 1-month supply of Part D covered insulin drug through all coverage stages.
2Optum Specialty Pharmacy is an affiliate of UnitedHealthcare Insurance Company. Other pharmacies are available in our network. You are not required to use Optum Specialty Pharmacy as your specialty pharmacy.
Read next: How to enroll
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