Jane Dotson
Medicare Part D is prescription drug insurance that is sold by private insurance companies. To purchase Medicare Part D, you must have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance). There are two ways to get this prescription drug coverage. If you have Original Medicare (Part A and/or Part B), you can buy a stand-alone Medicare Part D plan from a private health insurance company. You can shop for a plan that varies in cost and coverage, and you'll pay a separate premium for the Part D plan. Alternatively, you can get your Part A, Part B, and Medicare drug coverage (Part D) through a single plan, known as a Medicare Advantage Plan (Part C) or other Medicare health plan with drug coverage. It's important to note that you must have Part A and Part B to join a Medicare Advantage Plan, and you usually get your drug coverage through that plan.
| Characteristics | Values |
|---|---|
| What is Medicare Part D? | Prescription drug insurance |
| Who is it for? | People with Original Medicare (Part A and/or Part B) |
| How to buy? | Buy a stand-alone Medicare Part D plan from a private health insurance company |
| Cost | Average premiums of $46.50 in 2025, plus copays, coinsurance and/or deductibles |
| Coverage | Specific drug coverage and pharmacy networks vary by plan |
| How to choose a plan? | Check the formulary, look for plan changes, check the pharmacy network |
| Enrollment | You can only join, switch, or drop a plan during certain times, called enrollment periods. Special enrollment periods generally last for two months. |
| Extra Help | People with limited income and resources can apply for the Extra Help program to lower or cut Part D costs |
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Eligibility requirements
To be eligible to purchase Medicare Part D insurance, you must meet the following requirements:
- You must have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance). This is a prerequisite to joining a separate Medicare drug plan (Part D).
- You must live in the service area of the plan you want to join.
- You must be a U.S. citizen or lawfully present in the U.S.
- You must have your Medicare Number and your Part A and/or Part B coverage start dates. This information can be found on your Medicare card.
- You can only join, switch, or drop a Medicare Advantage Plan (Part C) or other Medicare health plan, or Medicare drug plan (Part D) at certain times, called enrollment periods.
- If you joined a Medicare Advantage Plan during your Initial Enrollment Period, you have a three-month window to change to another Medicare Advantage Plan (with or without drug coverage) or switch back to Original Medicare (with or without a drug plan). This period begins when you first obtain Medicare Part A & Part B.
- If you have other health insurance or drug coverage, consult your benefits administrator or insurance provider before making changes to your current coverage. This is to ensure that you do not lose your current health coverage.
Additionally, if you have limited income and resources, you may be eligible for the Extra Help program, which assists with the cost of prescription drugs, deductibles, and copays. Your eligibility for this program depends on your financial situation, and you can apply for it at any time before or after enrolling in Part D.
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How to apply
To apply for Medicare Part D, you must be either a US citizen or be lawfully present in the US. You must also have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance).
There are two ways to get Medicare Part D prescription drug coverage. If you have Original Medicare (Part A and/or Part B), you can buy a stand-alone Medicare Part D plan from a private health insurance company. You can shop for stand-alone plans, which vary in terms of cost and coverage. You will pay a separate premium for the Part D plan.
If you have a Medicare Advantage Plan (Part C) or other Medicare health plan, you will usually get your drug coverage through that plan. You can only join a separate Medicare drug plan without losing your current health coverage if you are in a Private Fee-for-Service Plan that does not include Part D.
To apply for a Medicare drug plan, you must live in the service area of the plan you want to join. You will need your Medicare Number and your Part A and/or Part B coverage start dates, which can be found on your Medicare card. You can apply during your Initial Enrollment Period, or you can avoid late enrollment penalties by signing up during a special enrollment period, which generally lasts for two months after your employment ends or after losing your qualifying employer insurance.
Once you have chosen a plan, you can select "Enroll" for the plan you want to join at Medicare.gov/plan-compare. You can also contact the plan to join by calling or visiting their website, or you can ask for a paper form to fill out and mail back to the plan.
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Costs and coverage
Medicare Part D is optional insurance that helps cover the costs of prescription drugs. The cost of a Part D plan will be different for each person. Private insurance companies set their own prices, and the cost will vary based on which plan you join. Out-of-pocket costs include premiums, deductibles, and coinsurance.
The average estimated premium in 2025 is $46.50. A plan with a deductible will not pay for your prescriptions until you pay the deductible amount out-of-pocket. The highest deductible a plan can charge in 2025 is $590. After you reach your full deductible, you’ll pay 25% of the cost as coinsurance for your generic and brand-name drugs until your out-of-pocket spending on covered Part D drugs reaches $2,000 in 2025. Then, you’ll automatically get “catastrophic coverage”.
If you don’t sign up for Part D when first eligible, a Part D late enrollment penalty will be added to your monthly premium. The Part D late enrollment penalty is calculated by multiplying 1% times the “national base beneficiary premium” ($36.78 in 2025) times the number of full, uncovered months you were eligible to join Medicare drug coverage but didn’t. That amount is rounded to the nearest $.10 and added to your monthly premium.
If you have a higher income, you might pay a higher premium for a Part D plan. If your income is above $106,000 and you file taxes individually, or $212,000 if you’re married and file jointly, you’ll pay an extra amount. If you have a lower income, you may qualify for the Part D Low-Income Subsidy (LIS), also known as “Extra Help”. This program helps people with limited income and resources lower or cut Part D costs. You can apply for Extra Help any time before or after you enrol in Part D.
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Deadlines
To purchase Medicare Part D insurance, you need to meet the following requirements: you must have Medicare Part A (Hospital Insurance) or Part B (Medical Insurance), live in the service area of the plan you want to join, be a U.S. citizen or lawfully present in the U.S., and have your Medicare Number and your Part A and/or Part B coverage start dates.
You can only join, switch, or drop a Medicare Advantage Plan (Part C) or Medicare drug plan (Part D) at certain times, called enrollment periods. The Initial Enrollment Period is a seven-month window that begins three months before you turn 65 and ends three months after your birthday month. If you miss this window, you may have to pay a monthly late enrollment penalty for as long as you have Part B coverage.
If you joined a Medicare Advantage Plan during your Initial Enrollment Period, you can change to another Medicare Advantage Plan (with or without drug coverage) or go back to Original Medicare (with or without a drug plan) within the first three months of having Medicare Part A and Part B.
Special Enrollment Periods are also available when certain life events occur, such as moving or losing your previous coverage. During these periods, you can make changes to your Medicare Advantage and Medicare drug coverage. Your chance to change plans lasts for three full months from either the date you're no longer eligible or the date you're notified, whichever is later.
Additionally, between December 8 of the year before the plan year and November 30 of the plan year, you can join a Medicare Advantage Plan, Medicare Cost Plan, or Medicare drug plan with an overall quality rating of five stars.
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Comparing plans
Location
Your plan options may vary by region or county. Enter your ZIP code to ensure you are viewing plans available in your region. If you live in another state for part of the year, check if the plan will cover you there.
Medication Coverage
Medicare Part D insurers have drug lists of medicines they cover. Review the formulary to ensure that your medications are included, and check for any restrictions or limitations. If a plan does not cover your medicine, see if it covers a different drug that also works for you. Your doctor may know of a substitute or generic option.
Costs
Compare the costs of the medicines covered by each plan. Consider the monthly premiums, deductibles, copays, and coinsurance. You may want the lowest annual cost not only for premiums but also for your estimated annual out-of-pocket costs.
Pharmacies
Part D plans have networks of pharmacies where you can fill your prescriptions. Check if your preferred pharmacies are in-network to maximize plan benefits. Some plans also offer mail-order options for convenient medication delivery.
Additional Benefits
Some plans may offer additional benefits such as vision, dental, and hearing care. Consider which benefits best meet your health needs and budget.
Tools and Resources
Various tools and resources can assist you in making an informed decision when comparing plans. The Medicare.gov Plan Finder tool is a valuable online resource that allows you to compare different Part D plans available in your area. Independent insurance brokers and counselors can also provide personalized guidance and assistance in selecting the most suitable plan for your specific needs.
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Frequently asked questions
Medicare Part D is prescription drug insurance. It is optional but can be purchased alongside Original Medicare (Part A and/or Part B) as a separate plan.
You can buy a stand-alone Medicare Part D plan from a private health insurance company. You can shop for plans that vary in cost and coverage.
The average premium is expected to be $46.50 in 2025, plus copays, coinsurance and/or deductibles, depending on the plan.
You must have Medicare Part A and/or Part B to enrol in Part D. You must also live in the service area of the plan and be a U.S. citizen or lawfully present in the U.S.
Yes, if you sign up late for Part D, there are permanent cost penalties. However, you can avoid these penalties by enrolling during a special enrolment period, which lasts for two months.
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