Medicare Part D Drug Coverage: Benefits Overview and Plan Options

People with asthma, allergies, eczema and related conditions often require expensive medications. Health insurance coverage can help ease these financial costs and make it easier to afford your medications.

Medicare is a health insurance option offered by the federal government for people ages 65 and older. You may be eligible for Medicare earlier if you have a disability or certain medical condition. Medicare Part D addresses coverage for prescription medications.

If you are about to turn 65, you are eligible to enroll in Medicare, including Medicare Part D. If you are already enrolled in Medicare Part D, you can make changes to your current coverage through the annual Open Enrollment Period from Oct. 15 to Dec. 7. This is the only time you can make changes to your Part D coverage for the following year. Any changes you make take effect on Jan. 1.

Even if you liked your Medicare Part D coverage last year, you should review your plan’s coverage for the following year. It can change from year to year. Your plan may have made changes. These changes could increase or decrease your out-of-pocket costs.

When you enroll in the Medicare program, make sure your plan offers the best medication coverage for you. For information, visit Medicare.gov or call 1-800-MEDICARE.

What does Medicare Part D cover?

Medicaid Part D covers medications prescribed by your doctors. The plan includes coverage for vital drugs that treat cancer and HIV/AIDS. It also covers medications that treat asthma, allergies, COPD and eczema.

Each Medicare Part D plan has its own list of covered drugs. This is called a drug formulary.

Medicare drug coverage helps pay for both brand name and generic medications. But the coverage for those medications often is based off a tier system. What exactly does that mean? Most plans use four tiers. It might look something like this:

• Tier 1. Most generic medications. You will have the lowest copayment.
• Tier 2. Brand-name medications preferred by your plan. You will have a medium copay.
• Tier 3. Brand-name medications not preferred by you plan. You will have a higher copay.
• Tier 4 (“Specialty Tier”). High-cost specialty medications. You will have the highest copayment.

If you are on more expensive brand name medications, discuss options with your doctor. You can also ask your healthcare plan for a copy of their drug formulary.

What drugs are included in Medicare Part D?

Medicare Part D plans cover medications for a variety of conditions, including cancer, diabetes, HIV/AIDS, and depression.

Medicare Part D also covers medications for asthma, allergies, COPD and skin conditions, among other respiratory and allergic conditions. These medications include:

• quick-relief (albuterol) inhalers for asthma
• long-acting beta2-agonists (LABA) inhalers
• inhaled corticosteroids
• leukotriene modifiers, such as montelukast, for asthma
• prescription antihistamines and nasal sprays
• epinephrine (for a severe allergic reaction, or anaphylaxis)
• topical corticosteroid ointments and creams for eczema

• certain biologics, especially if you take them at home

Allergy immunotherapy is typically covered under Medicare Part B since it is given in a doctor’s office.

What prescription drugs are not covered by Medicare Part D?

Medicare Part D does not cover over-the-counter (nonprescription) drugs. Prescription drugs that are not covered by Medicare Part D include:

• drugs aimed to relieve cough and cold symptoms
• drugs used to treat weight loss or weight gain
• fertility drugs
• drugs used for cosmetic purposes or hair growth
• erectile dysfunction drugs

What is the average monthly cost of Medicare Part D?

The average monthly cost for Medicare Part D is $55.90 (as of 2024). The cost of your Medicare Part D plan depends on your household income. People eligible for a low-income subsidy or “Extra Help” will pay nothing. Those in the highest income brackets will pay more.

People on Medicare Part D also pay an annual deductible that can be as much as $545.

What is the maximum out-of-pocket costs for Medicare Part D?

Starting in 2025, Medicare Part D has a yearly cap of $2,000 for maximum out-of-pocket prescription drug costs. You can choose to distribute that cost monthly.

Is Medicare Part D worth it?

Prescription drugs are generally very expensive. That’s why Medicare requires you to have prescription drug coverage — and if you don’t, you pay a penalty.

You can only enroll in Medicare at certain times of the year or for special circumstances. That may not be a big deal if you don’t currently take any medicine. But what if you get a new diagnosis that requires expensive treatment? You may be forced to choose between paying out of pocket for the medication or waiting to begin treatment until your prescription coverage kicks in.

So for many people, Medicare Part D is certainly worth it.

Are people automatically enrolled in Medicare Part D?

It depends. Most people must enroll themselves, either during an initial enrollment period or a special enrollment period.

You may be automatically enrolled in Medicare Part D if you…

• are part of the government Low-Income Subsidy program because you qualify for both Medicare and Medicaid;

• receive Supplemental Security Income.

How do I enroll in Medicare Part D for the first time?

You can enroll in Medicare Part D online once you are signed up for Part A and/or B. You can also enroll by calling 1-800-MEDICARE. A counselor can help you choose the plan right for your medical needs.

You need to be enrolled in Medicare Part A and B to enroll in Part D.

People who are turning 65 years of age have a 7-month window to sign up for Medicare Part A. This is called the Initial Enrollment Period. The window begins three months before your birthday. Then it continues the month of your birthday and ends three months later. If you enroll before your birthday, coverage begins the month of your 65th birthday. If you enroll the month of your birthday or later, coverage begins the following month.

If you do not enroll during the 7-month enrollment window and you do not have “creditable drug coverage,” you may have to pay a late enrollment penalty when you do sign up.

Can you add Medicare Part D at any time?

You can enroll in a Medicare Part D plan during your Initial Enrollment Period (age 65). The annual Open Enrollment Period for Medicare Part D and Medicare Advantage plans is Oct. 15 through Dec. 7 each year. This is when you can choose your plan for next year or make changes to your existing plan. Coverage begins January 1.

What is the penalty for not enrolling in Medicare Part D?

If you do not enroll in Medicare Part D in the 7-month window after turning 65, and you do not have other insurance, you may have to pay a late enrollment penalty.

The penalty is 1% of the national base premium for each month that you were eligible but did not enroll. It is added to your monthly premium and rounded to the nearest 10 cents. Currently the national base premium is $34.70. So if you lacked coverage for 24 months, 24% is multiplied with 34.70 to arrive at $8.33. Rounded to the nearest 10 cents, the penalty comes to $8.30.

Some people may qualify for a Special Enrollment Period (SEP) and not have to pay a penalty. Examples of situations that may qualify for a SEP include moving to a different area or losing employer-based insurance coverage.

Can you change Medicare Part D any time of the year?

No. You can only change your Medicare Part D plan at certain times of the year. These times are during the Initial Enrollment Period, the Open Enrollment Period of Oct. 15 to Dec. 7, or if there are special circumstances.

Do I need Medicare Part D if I have Medicare Advantage?

Many Medicare Advantage Plans include Part D coverage. However, always check your insurance plan for specifics. Some non-Medicare plans may offer separate drug coverage.

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