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Prescription Drug

What is Part D and why do I need it?


Medicare Part D, also known as a Medicare Prescription Drug Plan (PDP), is a federal-government program created to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.  It was enacted as part of the Medicare Modernization Act of 2003 (MMA) which also made changes to the Medicare Part C health plan program and went into effect on January 1, 2006.

The two ways to get Medicare prescription drug coverage are by enrolling into:

  1. a stand-alone Medicare Prescription Drug Plan (Part D) which can be used in conjunction with a Medicare Supplement or Medicare Advantage Plan (Part C) which does not have Medicare prescription drug coverage.
  2. a Medicare Advantage Plan (Part C) such as an HMO or PPO that offers Medicare prescription drug coverage (Part D).  These plans are known as Medicare Advantage Prescription Drug plans (MAPD).

Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary) and has its own rules and limitations. Below are some of the more common rules and limitations which can vary between Part D plans:

  • Formulary - Many Part D plans place drugs into different "tiers" on their formularies and can change during the year within guidelines set by Medicare.  A drug in a lower tier will generally cost less than a drug in a higher tier, but that is not always the case.  If a drug is on a higher tier and your prescriber thinks you need that specific drug instead of a similar drug on a lower tier (typically the generic), you and/or your prescriber can ask your Part D plan for an "exception" to get a lower copayment. 
  • Prior authorization (PA) - You and/or your prescriber must contact the Part D plan before you can fill certain prescriptions.  Your prescriber may need to show that the drug is medically necessary for the Part D plan to cover it.
  • Quantity limits (QL) - Limits on how much medication you can get per (re)fill and typically applies to controlled substances and mail order delivery is not applicable.
  • Step therapy - You must try one or more similar, lower cost drugs before the Part D plan will cover the prescribed drug.
  • Part B vs. Part D drug coverage - In most cases, the prescription drugs or vaccines you receive in a hospital  or doctor's office are covered by Medicare Part B.  Those prescription drugs commonly received at the pharmacy or through mail order (sometimes called "self-administered drugs" that you would normally take on your own), are covered under your Medicare Part D plan.