Medicare Part D Prescription Drug Coverage Explained

What is Medicare Part D?

Medicare Part D helps pay for the cost of prescription drugs. You can get Part D included in your Medicare Advantage plan or through a standalone Part D plan from a private insurance company.

What does Medicare Part D (prescription drug coverage) cover?

Part D covers brand-name, generic, and specialty medications. Each plan has a list of drugs it covers, known as a formulary.

How much does Medicare Part D cost?

Your costs when enrolled in a Part D plan include:

• Your Part D plan monthly premium, if applicable.
• Any out-of-pocket costs such as copays, coinsurance, and deductibles included with the prescription drug plan you choose.
• A late enrollment penalty (this applies only if you have a period of 63 days without Part D or other creditable prescription drug coverage).

Stages of prescription drug coverage

As your prescription medication spending increases throughout the year, you move from one stage to the next. You start at the deductible stage at the beginning of each year. All Part D drug plans have the same stages.

Deductible stage

UPMC for Life plans do not have a deductible for Tier 1 and Tier 2  prescription drugs. If your plan does have a deductible, you will pay the full price for your drugs until you meet your Part D deductible.

Most UPMC for Life plans have a combined deductible for Tiers 3, 4, and 5. For drugs on these tiers, you will pay the full cost of each prescription until you reach your plan’s deductible amount. Once you have reached your deductible, you will move into the initial coverage stage.

Initial coverage stage

Your plan begins to pay for your covered prescriptions. You pay a copay or coinsurance, depending on the drug tier, until your total yearly costs reach $2,000. The total yearly drug costs are the drug costs paid by both you and your Part D plan. 

Catastrophic coverage stage

There will no longer be a coverage gap (donut hole) in 2025. Once your total yearly out-of-pocket drug costs reach $2,000, you will not pay anything for your drugs. You will stay in this stage until the end of the year. 

Am I eligible for Medicare Part D?

You must have Medicare Parts A and B to join a Part D plan.

How do I get Medicare Part D?

• You can join a standalone Part D prescription drug plan. A standalone Part D plan would be in addition to Original Medicare or a Medicare Supplement plan.
• Most Medicare Advantage plans include Part D prescription drug coverage. If you have a Medicare Advantage plan, you cannot also join a separate standalone Part D plan.

Extra Help with prescription drug costs

If you have limited income and resources, you may qualify for extra help. Learn how you can get help with prescription drug costs.