Medicare Part D

Medicare Part D, also known as the Medicare Prescription Drug Plan (PDP) is the voluntary drug program for Medicare beneficiaries where part of the cost of outpatient prescription drugs are paid for through a benefit plan with insurance premiums, deductibles, and tiered co-payments for covered medications.

These prescription drug plans are sold by private companies who contract with Medicare annually.  Each plan will have their own formulary, or list of covered drugs. No plan covers every drug, and every company organizes their formulary differently.

Medications are organized into tiers such as: preferred generic, non-preferred generic, preferred brand, non-preferred brand, and specialty. Some plans may have additional tiers, but this is the typical tier structure. Usually the lower the tier, the lower the co-pay.

If you decide not to join a Medicare Prescription Drug Plan (Part D) when you're first eligible, and you don't have other creditable prescription drug coverage, or you don't get Extra Help, you'll likely pay a late enrollment penalty.