Medicare Part D are plans designed to help those on Medicare cover their prescription medication cost. While Part D was not part of Original Medicare, it is not required to have either a Part D plan or have creditable coverage from another source to avoid a monthly penalty.
What does Part D cover? #
All Part D plans must include coverage from most commercially available vaccines. Additionally, all plans have what is called a formulary, which is a list of medication that are offered through that plan. Both generic and brand-name drugs are included, but you will generally have higher out-of-pocket cost for brand-name medications.
Formularies vary from plan to plan, but federal law requires that all Medicare Part D plans include at least two drugs in the most commonly prescribed categories and all medications in the following categories:
- Anticancer drugs except where covered by Part B
- Anticonvulsant treatments for seizure disorders
- Antidepressants
- Antipsychotic medications
- HIV/AIDs drugs
- Immunosuppressant drugs
Does Part D cover all medications? #
Your specific formulary will probably not cover every drug, but all major illnesses, ailments, and diseases are covered in one way or another.
Over the counter medications, such as antacids and cold medicines, are not covered. Nor are drugs for erectile dysfunction, hair loss, or weight control, even if a doctor prescribes them. You can use money that you had earlier contributed to a HSA to pay for these medications though.
How much do Part D plans cost? #
Medicare Part D requires an additional premium beyond what you pay for Original Medicare, and the premiums vary by plan. Additionally, if you earn more than a certain amount, you’re subject to a surcharge that you will pay on top of your premiums each month. While you pay your premium to the insurance company, the surcharge is paid to Medicare.
You may also have to pay a deductible and copayments for your medications, which vary by plan. You can switch plans every year during open enrollment, which runs Oct. 15 to Dec. 7 for coverage starting Jan. 1. During this time you are able to view the cost of each medication that you are taking to gain an understanding of where your cost will be spent over the year.
In 2025, your yearly deductible is capped at $590 and your yearly maximum-out-of-pocket is capped at $2,000. These cost do not include your premiums or any out-of-network charges you may need to pay.
Part D Penalties #
f you don’t have other drug coverage considered to be at least as good as Part D (what the government calls creditable coverage), you may have to pay a late enrollment penalty when you sign up. The penalty is 1 percent of the national base beneficiary premium that CMS calculates annually for Part D — in 2025 that’s $36.78, which is slightly different from the average premium — multiplied by the number of months you went without creditable coverage.
It doesn’t sound like much, but it can add up quickly if you’ve gone years without Part D. And you usually have to pay the monthly penalty for as long as you have Part D coverage. If you go for 12 months without coverage, you will pay an additional $4.41 per month for the rest of the time you have Medicare.