Medicare Part D is Medicare’s optional prescription drug coverage, sold through private insurance companies.
Medicare Part D was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006.
Part D has helped to reduce out-of-pocket drug spending for enrollees, which is especially important due to the modest or lower incomes that beneficiaries have. However, pressures to reduce spending may come into conflict with patient access due to the access restrictions that Part D insurers impose.
Medicare Part D helps pay for medications not covered under parts A or B. All Part D plans must cover at least two and often many more medications from the most prescribed medication classes and categories. These include: HIV medications, antidepressants, cancer treatment medications, immunosuppressants, anticonvulsants and antipsychotics. Most plans also cover the majority of vaccines with no copay. Part D plans are not required to pay for all covered Part D drugs, only drugs on their list of covered drugs for which they will make payment (formulary). This is contingent upon the formulary and coverage not discouraging enrollment for certain Medicare beneficiaries. A Part D plan can change the medications or pricing on their coverage list at any time. These changes usually occur when a generic version of a brand name drug becomes available, a new medication has become available or there’s newly published data about this treatment or medication.1
Medicare Part D does not cover over-the-counter medications (i.e. vitamins, supplements, or cosmetic and weight loss medications). Medicare Part D also do not cover certain prescription medications: fertility drugs, medications to treat anorexia or other weight loss or gain, if it is not a comorbidity, cosmetic or hair growth drugs, cold or cough drugs, if they aren’t a part of a larger diagnosis, and medications used to treat erectile dysfunction. If a patient is eligible for Medicare, they’re eligible for Part D. Patients can enroll in a Medicare Part D plan during initial enrollment for Medicare parts A and B. Costs depend on plan choice, coverage, out-of-pocket costs and other factors (e.g locale, income, etc.). Costs also depend on medications and plan levels or tiers.1
In 2020, 46.5 million Medicare beneficiaries were enrolled in Medicare Part D plans, including employer-only group plans; of the total, just over half (53%) are enrolled in stand-alone prescription drug plans and nearly half (47%) are enrolled in Medicare Advantage drug plans.2
After a patient passes the initial coverage limit of their Part D plan, there is a coverage gap referred to as the “donut hole.” In 2021, the initial coverage limit is $4,130. Deductibles and copayments count toward the coverage limit, as does what Medicare pays. During the coverage gap, you’ll only pay 25 percent of the cost of covered medications.There’s also a 70 percent discount on brand-name medications while you’re in the donut hole to help offset costs.1
Biggers A. What Is Medicare Part D? | Healthline.com. Healthline. https://www.healthline.com/health/medicare/medicare-part-d#donut-hole. Published 2021.
An Overview of the Medicare Part D Prescription Drug Benefit. KFF. https://www.kff.org/medicare/fact-sheet/an-overview-of-the-medicare-part-d-prescription-drug-benefit/. Published 2020.