What is Medicare Part D?
About Medicare Part D
Original Medicare (Part A and Part B) only covers prescription drugs you receive during a hospital stay or if you have outpatient surgery. Private insurers offer standalone Medicare Part D prescription drug plans so you can make sure your medications are covered. Anthem does not offer standalone Part D plans, but most of our Medicare Advantage plans include Part D prescription drug coverage.
How does Medicare Part D Coverage Work?
As of January 1, 2025, the Medicare Part D coverage gap (formerly known as the “donut hole”) has been eliminated. Whether you have a standalone Part D plan or a Medicare Advantage plan that includes prescription drug coverage, you now move through just three phases of coverage, making it easier to understand and anticipate your prescription drug costs.
Annual Deductible
Amount you pay before your plan starts to pay for covered prescription medications Your annual deductible can change based on the plan you chose.
Initial Coverage
After you meet your deductible, you will pay copayments or coinsurance for covered prescription medications, depending on your plan
Catastrophic Coverage
You will pay $0 for covered prescription drugs once you reach the $2,100* limit for out-of-pocket costs
*Maximum out of pocket cost reflects 2026 CMS pricing.
What Does Part D Cover?
Standalone Part D plans and Medicare Advantage plans that include Part D cover different medications. Most plans have a formulary, which is a list of drugs the plan covers. While there are many drugs Medicare requires Part D plans to cover, you still want a plan that fits your personal prescription needs.
Just remember, there are laws that do not allow Medicare Part D insurers to cover certain categories of drugs. These include:
- Non-prescription medications
- Medications for anorexia, weight loss, or weight gain
- Drugs used to promote fertility
- Drugs for cosmetic purposes or to promote hair growth
- Cough or cold medications
- Prescription vitamins and minerals
- Drugs for sexual or erectile dysfunction
That’s why it is important to make sure the prescription drugs you take are covered by the plan you chose.
Are Generic Prescription Drugs Covered By Medicare Part D?
You can save money if you take generic instead of brand-name drugs. Look for plans that have tiers comparing generic and brand-name drugs. Tier one and Tier two usually cover generic versions of medications that may cost you nothing or very little compared to brand medications.
What If I’m Not Taking Any Prescriptions Right Now?
Even if you don’t take any medications today, enrolling in a Medicare Part D when you’re first eligible is still important. A new illness or sudden diagnosis could require medications that are expensive without coverage. Part D helps protect you from high, unexpected drug costs. If you don’t have other creditable drug coverage and delay enrolling in Part D, Medicare may add a permanent penalty to your monthly premium when you sign up later.
Enrolling in a Part D plan or Medicare Advantage plan that includes prescription drug coverage is one of the simplest ways to safeguard both your health and your budget.
What Does Medicare Part D Cost?
Most standalone Part D plans or Medicare Advantage plans that include Part D have deductibles, premiums, and/or copays or coinsurance for which you are responsible. Keep in mind that a plan with a $0 deductible may mean you'll pay higher copays and/or monthly premiums.
You also can enroll in the Medicare Prescription Payment Plan designed for members with high out-of-pocket prescription drug costs. This will let you make monthly payments versus paying the entire amount upfront. Participation in this program is completely optional. You will receive enrollment instructions from your health plan or give us a call if you have questions.
Costs for Medicare Part D can vary, and for those who need help, there is assistance available. Extra Help is a federal program that helps with Medicare Part D costs. Depending on your financial situation, it can pay for some or all of your prescription drug coverage.
When Are You Eligible For Medicare Part D?
The best time to sign-up for Part D is during your Initial Enrollment Period (IEP). That’s the seven-month window that includes:
- Three months before you turn 65
- The month you turn 65
- Three months after you turn 65
You must have Medicare Part A and/or Part B before you can enroll in a Part D plan. If you do not have creditable prescription drug coverage from an employer or other health plan, it’s best to enroll in Part D as soon as you’re eligible to avoid late penalties. You can make changes to your plan, including adding coverage, during the Annual Enrollment Period from October 15 to December 7 each year.
Avoiding The Medicare Part D Penalty
If you don’t sign up for a Part D plan when you’re first eligible, or you’ve gone 63 days or more without creditable drug coverage after your Initial Enrollment Period (IEP), you’ll pay a monthly late enrollment Medicare Part D penalty for as long as you have Part D.
Standalone Medicare Part D Plans Vs. Medicare Advantage Plans
Another way to get prescription drug coverage is through a Medicare Advantage plan (Part C) that includes Part D prescription drug coverage (also called a Medicare Advantage prescription drug plan). Along with covering prescription drugs, many Medicare Advantage plans offer additional benefits like dental, vision, and hearing coverage.
Read Our Other Medicare Articles
What Is Original Medicare Part A And B?
Why Choose Anthem?
Plan availability, premiums, copays, deductibles, benefits, and benefit amounts may vary based on where you live, the plan you choose, and your eligibility.
Anthem Blue Cross, a Medicare Advantage organization with a Medicare Contract, offers HMO, HMO D-SNP, HMO C-SNP, and HMO I-SNP plans. Anthem Blue Cross Partnership Plan, a Medicare Advantage Organization with a Medicare Contract, offers HMO and HMO-CSNP plans. Anthem Life and Health Insurance Company, a Medicare Advantage Organization with a Medicare Contract, offers LPPO, LPPO D-SNP, and LPPO C-SNP plans. Anthem Blue Cross HMO D-SNP plans and Anthem Life and Health Insurance Company LPPO D-SNP plans additionally contract with state Medicaid programs. Anthem BC Health Insurance Company, a Medicare Advantage Organization with a Medicare Contract, offers LPPO plans. Enrollment in an Anthem Blue Cross, Anthem Blue Cross Partnership Plan, Anthem BC Health Insurance Company and Anthem Life and Health Insurance Company plans depend on contract renewal.