Medicare can be a bit confusing because it has multiple parts: Part A, Part B, Part C, and Part D. To add to the complexity, Parts C and D come with a variety of plan options that are each different. Oh, and there are also Medicare Supplement plans. While it can feel confusing, Medicare doesn’t actually have to be that complicated. We break things down simply in our Medicare Explained Decision-Making Guide

If you’re interested in all the details around Medicare Part D, then you’re in the right place. In this guide we’ll cover:

  • What Part D is

  • How it works

  • How much it costs

  • Who it’s for

  • How to enroll

  • How to compare plans

Rather talk to someone to learn about Medicare? Our licensed Medicare Advisors would be happy to chat with you to help you understand everything you need to know about Medicare. Give us a call at 855-900-2427 or schedule a time to get your Medicare questions answered.

What is Medicare Part D?

Medicare Part D is Medicare’s prescription drug coverage. Original Medicare (made up of Part A and Part B) doesn’t provide coverage for prescriptions, but you have the option to purchase a separate prescription drug plan to reduce your prescription costs. 

If you choose to leave Original Medicare to enroll in a Medicare Advantage plan, then Part D would likely be included with your Medicare Advantage plan. If you choose a Medicare Advantage plan that does not include prescription drug coverage, you have the option to enroll in a stand-alone Part D plan.

Benefits of having Medicare Part D coverage

Prescriptions can cost a lot! Medicare Part D coverage makes your prescriptions more affordable. Even if you don’t currently have prescriptions, getting coverage when you enroll in Medicare will help you avoid the Part D late enrollment penalty should you need coverage later (we’ll explain the penalty in more detail later on). 

How does Part D work?

As explained above, you can have Medicare Part D coverage through either a stand-alone Medicare prescription drug plan or through a Medicare Advantage plan that includes prescription coverage. Regardless of which option you choose, the coverage will work the same. That said, prescription coverage and costs vary from one Medicare plan to another. To understand how a specific plan works, you’ll need to look at its list of covered drugs (formulary), drug tiers, annual deductible, copays, and coinsurance amounts. Below you’ll find info on how formularies and drug tiers work. We go into deductibles, copays, and coinsurance in the cost section that comes after.

Part D formularies and tiers

A drug formulary is a list of drugs covered by a Medicare plan. The formulary will include covered generic and brand-name prescriptions divided into drug tiers. Lower-tier drugs are usually generic and cost less. Higher-tier drugs cost more. 

Formularies and tier structures vary based on the Medicare prescription drug coverage you choose. Formularies are important because they determine how much you’ll pay for your prescriptions.

How much does Medicare Part D cost?

In 2024, the average cost of prescription drug coverage is $34.70. That said, premiums vary based on where you live and which plans are available to you. When weighted by enrollment, the average premium paid varies across states from $28.92 in South Dakota to $50.15 in New York

Drug plans don’t have to be expensive! Many people are able to get Part D coverage with a $0 premium. When looking at these popular plans and your other options for drug coverage, make sure that your prescriptions are covered and the amount you’ll owe for your prescriptions is low.

Part D out-of-pocket costs

Premiums are your monthly cost to receive insurance coverage. You may also owe some money out of pocket when you fill your prescriptions. What you owe when you pick up your prescriptions will vary based on your Part D deductible, copays, and coinsurance. Your costs will also depend on your prescriptions and the tiers they’re on for your specific plan.

Predicting what you’ll owe in one year can be complicated when you’re comparing a number of different plans with different costs and tiers. We can help you compare your annual estimated costs across different Part D plans quickly and painlessly. Give us a call at 855-900-2427 or schedule a time to chat to ensure you’re saving the most on your prescriptions.

Get help paying for prescriptions with Extra Help

Also commonly called the Low Income Subsidy (or LIS), Medicare’s Extra Help program helps people with lower incomes and resources. Extra Help will cover Part D premiums, deductibles, and coinsurance. If you receive Extra Help, Part D penalties won’t apply to you. 

Some people get Extra Help automatically and others need to apply. Learn more about Medicare Extra Help, who’s eligible, and how to apply.

Who should get Medicare Part D?

About 78% of people on Medicare have Part D coverage. While it’s not required, most people should get Medicare Part D coverage so they can pay less for current and future prescription needs. Enrolling even when you don’t need coverage will also help you avoid a late enrollment penalty. 

Medicare Part D enrollment

Most people should enroll in Medicare Part D during their Initial Coverage Election Period, which begins three months before your Medicare Part B coverage begins. You can also choose to enroll in a Medicare Part D plan or a Medicare Advantage plan during the Medicare Open Enrollment Period, which lasts from October 15th to December 7th every year. 

How to avoid the Medicare Part D penalty

If you don’t sign up for Part D coverage during your Initial Coverage Election Period, you could risk paying a late enrollment penalty when you do eventually choose Part D coverage. There are two surefire ways to avoid the Part D late enrollment penalty:

  1. Never go more than 63 days without prescription drug coverage through Medicare or another credible insurer

  2. Choose to never enroll in Medicare Part D

Changing Part D coverage

I often tell people to “date their drug plan” rather than feel married to it. Medicare Advantage and prescription drug plans change every year. Sometimes new plans are added too! Your prescription needs may also change from one year to the next. For all of these reasons, I always suggest that people shop around during the Open Enrollment Period to see if there’s a better plan available that could save them money in the upcoming year. Chapter’s Medicare Advisors are happy to help you compare your current drug coverage to the other available options each year.

2024 Medicare Part D plans

When it comes to Medicare Part D coverage, you have options. Over 10 insurance companies offer between 15-24 stand-alone prescription drug plans depending on your location. You’ll also have access to an average of 36 Medicare Advantage plans that include Part D coverage. 

Quick facts on coverage choices

  • 56% of people choose to receive their prescription drug coverage through a Medicare Advantage plan. 

  • 57% of people get Part D coverage from three big insurance firms: UnitedHealth, CVS Health, and Humana. 

  • 27% of people with Part D receive financial aid from the Part D Low-Income Subsidy (Extra Help) program.

  • The average monthly premium for Part D coverage is higher for stand-alone prescription drug plans than it is for Medicare Advantage plans with prescription drug coverage.

Stand-alone Medicare prescription drug plans

There are 709 stand-alone Medicare Part D plans available in 2024. Alabama and Tennessee have the most drug plans available: 24. New York has the least drug plans available: 15. Stand-alone Part D plans are most common among people who have Original Medicare. 

Medicare Advantage plans that include Part D

People can choose from 43 Medicare Advantage plans on average. Of those 43 plans, 36 include prescription drug coverage. These plans are known as MA-PD plans. Because over 80% of Medicare Advantage plans include prescription drug coverage, most people on Medicare Advantage don’t enroll in a stand-alone Part D plan. 

How to compare Medicare Part D plans

There’s a lot that goes into Medicare Part D coverage, and it’s easy to get lost in the sea of information. To keep yourself afloat, keep these three considerations in mind.

Make sure your prescriptions are covered

First and foremost, your prescription drug coverage must cover your prescriptions. After all, that’s what it’s for! 

Compare expected costs

Once you’ve narrowed down your options to plans that cover all of your prescriptions, you should compare your estimated costs for the year. Make sure to include the monthly premium and expected out-of-pocket costs. You can calculate your expected out-of-pocket costs by determining which tiers your prescriptions are on and what the copays and coinsurance amounts will be for each.

Consider star ratings

If you end up with two or more plans that minimize your expected costs, you can use Medicare plan star ratings to make a final choice. Every year, Medicare rates Part D and Medicare Advantage plans from 1-5 stars, with a 5-star rating being the best. 

Get help from licensed Medicare agents

Comparing Part D and Medicare Advantage plan options and calculating the cost differences can get complicated, especially if you have multiple prescriptions to consider. Our licensed Medicare agents can help you compare and calculate quickly, so you can choose the best Medicare Part D coverage in minutes instead of hours. We’re just a phone call away! Give us a call at 855-900-2427 or schedule a time to chat.


You only have Part D coverage if you actively enrolled in it through either a stand-alone Part D plan or a Medicare Advantage plan. If you do enroll, you’ll receive an insurance card from the company that provides your Part D plan or Medicare Advantage plan. You’ll also receive an Annual Notice of Change  from your Part D or Medicare Advantage plan. This will let you know about any changes to coverage ahead of the Medicare Open Enrollment Period.

Anyone who’s eligible for Medicare is eligible for Medicare Part D.

Prescription coverage varies across Part D plans and Medicare Advantage plans. You’ll have to check each plan’s formulary (list of covered drugs) to determine if your prescriptions are covered. 

Read more about Medicare Part D coverage for common prescriptions:

The insurance model doesn’t work if people only get insurance when they need it. If everyone only enrolled in a plan when they needed it, insurance costs would be too high. Insurance only works if healthy people pay for premiums to balance out the costs of those who need more treatments and care. Part D penalties encourage people to enroll in Part D early to maintain this balance.

You can change your Part D coverage during Medicare’s Open Enrollment Period, which lasts from October 15th - December 7th every year. You can switch between Part D plans, switch to or from a Medicare Advantage plan, or switch your Medicare Advantage plan. There are also some special enrollment periods that could allow you to change your Part D coverage outside of Open Enrollment. Learn more about when you can change Medicare plans.

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