Medicare is a federal health insurance program covering an estimated 65 million Americans.

Read on to learn how Medicare may cover your prescription drugs.

The four major Medicare parts (A, B, C, D) all offer some prescription drug coverage. Medicare Part D offers the most extensive outpatient prescription drug coverage.

Costs vary depending on your chosen plan and your work and income history. If you’re eligible for Medicare, you qualify for prescription coverage under the various parts.

You’re eligible for Medicare if you’re a U.S. citizen or legal resident and:

You automatically become eligible for prescription coverage if you meet Medicare eligibility requirements. Currently, around 50 million Americans have prescription drug coverage through Medicare Part D.

Most states have hundreds of Medicare health plans, and figuring out the best option can be hard. Even though finding the right coverage can save you a lot of money, only about a third of Americans shop around to find plans with the coverage and cost that’s right for them.

The right plan for you depends on:

  • which medications you take
  • what you want to pay for out-of-pocket costs, including copays and deductibles
  • what plans are available in your area

Medicare Part D plans cover most prescription drugs. You may purchase a Medicare Part D plan if you’re eligible for Medicare.

Am I required to have Medicare Part D?

Part D is an optional addition to Original Medicare (parts A and B). Some Medicare Advantage (Part C) plans also include drug coverage.

What kind of drug coverage is offered by Medicare Advantage?

Many Medicare Advantage plans also cover prescription costs through private plans, including:

  • Health Maintenance Organization (HMO) plans
  • Preferred Provider Organization (PPO) plans
  • Private Fee-For-Service (PFFS) plans
  • Special Needs Plans (SNPs)

If your plan doesn’t offer prescription drug coverage, you must have separate Part D drug coverage or pay a penalty.

Does Medicare Part A or B pay for any prescription drugs?

Original Medicare (parts A and B) offers some prescription coverage.

Part A covers inpatient hospital stays, including necessary inpatient medications. It may also cover some home health costs, including certain medications.

Part B covers doctor visits, certain vaccines, medications given at a health facility or doctor’s office (like injections), and oral cancer medications.

The list of medications covered by Medicare Part D is called a formulary. This formulary typically has levels, or tiers, for different classes of medications.

Medicare requires all plans to cover at least two drugs from the most prescribed medication classes. Most plans offer brand-name and generic options, with different copays for each type.

In addition, every plan must also cover all medications under these categories:

The lower the tier, the less expensive the medication. Tier 1 is usually low cost generic drugs.

Specialty or unique medications are in the highest tier and often require prior authorization and higher out-of-pocket costs.

If a medication isn’t covered under your plan and your doctor feels you need to take it, they can request an exception to cover it. They must provide supporting information. Each exception request is reviewed individually.

How do I know if I have Medicare Part D?

You can enroll in part D during the Medicare open enrollment period.

After enrolling in Medicare, you should receive a card in the mail before you turn 65 years old. If not, or if you want to check your enrollment status, you can contact the Social Security office.

Medicare has an online tool that lets you compare plans and costs. The tool lets you learn about available Part D plans, Part D with Medigap, and Medicare Advantage (Part C) plans.

You’ll need to input:

  • your ZIP code
  • your medications
  • how you prefer to fill your medications (retail, mail order, other)

The resource tool then lists plans in your area, along with costs. Remember that the first plan listed may not be the best option for you. It’s best to evaluate all the options before making your choice.

You can sort plans by:

  • lowest monthly premium (this is the default that will pop up)
  • lowest yearly deductible
  • lowest drug plus the premium cost

Learn more about how to compare Medicare Part D plans.

Part D out-of-pocket costs vary by plan. Criteria that might affect cost include:

  • where you live
  • the plan you choose
  • medications you take

In July of 2023, the Centers for Medicare and Medicaid Services (CMS) estimated that the projected average total Part D premium would decrease by 1.8% in 2024, from $56.49 in 2023 to $55.50 in 2024.

This premium is the set amount you pay monthly to your insurance provider. Depending on your plan, you may also have a copay, deductible, or coinsurance.

Insulin coverage

Thanks to a new insulin benefit, the maximum cost for a 1-month supply of any Part D-covered insulin is now $35. Plus, you won’t have to reach a deductible first.

If you opt for a 60- or 90-day supply, your costs will still be capped at $35 per month for each covered insulin.

Learn more about Medicare costs in 2024 and how to understand out-of-pocket costs and copays.

You can find help choosing and enrolling in a Medicare plan by:

Tips for choosing a Medicare prescription drug plan

When selecting a Medicare plan (Original Medicare or Medicare Advantage), consider these questions:

  • What medications do you take and are they covered?
  • What would your premiums and other out-of-pocket costs be?
  • Is your doctor and pharmacy on the plan?
  • If you live in more than one place during the year, does the plan have coverage?
  • Do you need referrals to see specialists?
  • Do you need extra coverage or help with out-of-pocket costs (Medigap)?
  • Do you want bonus services, such as dental or vision?

Medicare has several parts, and they all cover different categories of prescription drugs based on certain criteria. Part D has the broadest outpatient prescription coverage.

Depending on where you live, most states have many plans. Costs vary based on your specific coverage needs and individual factors, such as your income history.

It’s important to make sure the plan suits your healthcare needs because you can’t change plans for 1 year after you enroll.

Before making a final choice, visit Medicare.gov or call the plan’s provider for more details on drug coverage.