Medicare Part D: Prescription Drug Plans

Benefits by Design Inc can help you understand the complexities of prescription drug plans, and ensure you have a solid plan for the short-term and long-term.

What is Medicare Part D?

Medicare Part D is prescription drug coverage offered by private insurers and regulated by Medicare. You should enroll in a Part D plan when you first become eligible for Medicare if you have:


  • Original Medicare Part A (hospital) and/or Part B (medical)

  • A Medicare Advantage (Part C) plan that doesn’t include drug coverage

Important Note: Part D plans are not legally required, but unless you have other creditable drug coverage, it’s financially risky to skip Part D. Even if you don’t take many prescriptions now, it’s smart to enroll in a low-cost plan when you become eligible to avoid lifetime penalties and limited access.

Choosing a Prescription Drug Plan

Selecting the right Part D plan involves these key factors:


  • Costs: Compare plans’ monthly premiums, annual deductibles, and coinsurance.

  • Drug Coverage (Formulary): Review each plan's list of covered drugs, which are generally organized into tiers that will determine your out-of-pocket cost. Make sure your medications are covered at a level you can afford, and check for any restrictions like prior authorization or quantity limits.

  • Pharmacy Network: Verify that the pharmacies you use are included in the plan’s network. Some plans offer discounts if you use their preferred pharmacies or mail-order platforms.

Note: Medicare’s rules for out-of-pocket limits and drug tiers are updated annually, so check with us to make sure you have the latest information.

Enrolling in Part D Plans

There are a few times throughout the year when you can enroll in Medicare Part D coverage:


  • Annual Enrollment Period (AEP): October 15 to December 7 every year; change, switch, or leave Part D plans. It is crucial to review and adjust coverage every year based on changing needs and formularies.

  • Initial Enrollment Period (IEP): The seven-month window when you first become eligible for Medicare (starts three months before your 65th birthday month and ends three months after).

  • Medicare Advantage Open Enrollment (OEP): January 1 to March 31 every year; switch Advantage plans or return to Original Medicare and join a standalone Part D plan.

  • Special Enrollment Periods (SEPs): Certain life events, such as moving to a new state or losing creditable drug coverage, may qualify you to change enrollment.

The Late Enrollment Penalty

The Social Security Administration applies this penalty to your Part D plan premium if you enroll in a Part D plan and one of the following is true:


  • It has been more than 63 days since you became eligible for Medicare and you don’t have creditable coverage
  • It has been more than 63 days since your creditable coverage lapsed or ended

The penalty is calculated based on the number of months you went without drug coverage once you were eligible. This increases your premium permanently. So the longer you wait, the more you will pay for the duration of your plan.

Two people reviewing documents at a table, one pointing while the other writes, in a bright office setting.

What is Creditable Drug Coverage?


This refers to prescription coverage through another source that’s considered equal to or better than Part D. Examples include VA benefits, TRICARE, and some employer or union plans. If you have one of these, you should get a Notice of Creditable Coverage from your plan each year.


If you skip drug coverage when you’re first eligible for Medicare, and if you don’t have creditable coverage, you’ll pay more on your Part D premium permanently if you decide to sign up for a plan later. Similarly, if you lose your creditable coverage, you must switch to a Part D plan within 63 days to avoid the late enrollment penalty.

Why Isn't My Medication Covered by Medicare Part D?

One of the most common questions people ask when enrolling in Medicare is, "My doctor prescribed this medication. Why doesn't my Medicare drug plan cover it?"


While Medicare Part D covers thousands of prescription medications, there are certain categories of drugs that are excluded by law or may be restricted by a specific plan's formulary.


Understanding how Medicare Part D works can help you avoid unexpected costs and identify options for obtaining coverage.


Common Medications and Categories That May Not Be Covered


Weight Loss Medications

Many popular weight-loss medications have historically been excluded from Medicare Part D coverage when prescribed solely for weight loss.

Examples may include:

  • Zepbound
  • Wegovy
  • Other medications prescribed exclusively for weight reduction


Coverage rules continue to evolve, particularly when these medications are prescribed for other medical conditions. Always verify coverage with your specific Part D plan.


Over-the-Counter Medications


Medicare Part D generally does not cover medications that can be purchased without a prescription, including:


  • Allergy medications
  • Cold and flu remedies
  • Vitamins and supplements
  • Pain relievers available over the counter


Vitamins and Nutritional Supplements


Most vitamins and supplements are not covered by Medicare Part D, even when recommended by a healthcare provider. Examples include:


Fertility Medications


Drugs prescribed for fertility treatment are generally excluded from Medicare Part D coverage.


Cosmetic Medications


Medications used primarily for cosmetic purposes are generally not covered.


Erectile Dysfunction Medications


Many medications prescribed solely for erectile dysfunction may have limited or no Part D coverage depending on the plan.


Medications Not Included on a Plan's Formulary


Even if a drug is not excluded by Medicare, it may not be included on your specific plan's formulary (approved drug list). This is one of the most common reasons beneficiaries encounter unexpected prescription costs.


What If My Medication Is Not Covered?

The good news is that a denial does not always mean you have no options.


Request a Formulary Exception


Your physician may be able to submit documentation explaining why a non-covered medication is medically necessary. If approved, the plan may make an exception and provide coverage.


Request Prior Authorization


Some medications require additional clinical information before coverage is approved. Your doctor can often help submit the necessary documentation.


Ask About Alternatives


Many plans cover therapeutic alternatives that may provide similar clinical benefits at a lower cost.


Review Other Medicare Drug Plans


Not all Part D plans cover medications the same way. A medication that is not covered by one plan may be covered by another plan. This is one reason why reviewing your drug coverage annually during the Medicare Annual Enrollment Period is so important.


Manufacturer Assistance Programs


Some pharmaceutical manufacturers offer discount programs or patient assistance programs that may help reduce costs for certain medications.

The Importance of an Annual Drug Review

Because Medicare prescription drug plans can change their formularies every year, it's important to review your medications annually to make sure your plan still meets your needs and helps keep your costs as low as possible. A drug that was covered this year may move to a different tier, require prior authorization, or no longer be covered next year.


Before enrolling in or renewing a Part D plan, review your current prescriptions, dosages, preferred pharmacy, and any medications such as ophthalmic eye drops or hormone therapies, which are often subject to formulary restrictions, prior authorization, or higher cost-sharing rather than being excluded from coverage altogether.

Part D Frequently Asked Questions

  • Do I need Part D if I don’t take many medications?

    It’s a good idea to enroll when you're first eligible, to avoid future penalties. Even if you don’t take many medications now, a plan with a low premium will offer basic protection in case there’s an unexpected change in your health status.

  • Can I switch Part D plans every year?

    Yes, you can change prescription plans during the Annual Enrollment Period. It’s smart to review your plan annually because drug formularies and costs can change.

  • Where can I find details about my prescription drug plan?

    Create an account on the Medicare website to sign in and securely access your prescription drug plan details.