Most Medicare D Plans have a coverage gap. Called a “donut-hole”, this gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you enter the coverage gap, you get a 50% discount on covered brand-name drugs, and a 7% discount on all generic drugs. The percentage you save on these drugs in the coverage gap will increase each year through the year 2020.

Once you get out of the coverage gap, you automatically qualify for “catastrophic coverage”. This assures you pay only a small co-payment for covered drugs for the remainder of that year.

Medicare D Plans cover only prescription medications, not over-the-counter medications. Part D plans also do not pay for medications purchased from foreign pharmacies.

If a medication you take isn't on your plan's formulary, your Part D plan will pay for a one-time 30-day supply. This allows your doctor time to try to find another drug in that formulary that may work equally well. If you have already tried similar drugs in the formulary without success, your doctor may contact your drug plan to request an exception. If this request is approved, the plan will cover the drug. Exceptions can also be requested for a plan’s limits on dosages or quantities of drugs dispensed. 

If you are eligible for both Medicare and state Medicaid, Medicare will automatically enroll you in a Medicare D drug plan. You will pay $0 - $5.60 out-of-pocket for each covered prescription, and you will likely pay little or nothing for premiums and deductibles.

If you currently get prescription coverage from the Veterans Administration, Tricare or the Federal Employee Retirement Program, it will likely be best to keep your current prescription coverage. But, in some cases, adding a Medicare D plan can provide you extra coverage and savings, especially if you qualify for extra help because of limited income and assets.

If you have prescription coverage from a former or current employer or from a union, joining a Medicare D drug plan might cause you to lose all of your employee/retiree or union benefits. Contact your employer or union benefits administrator for information.

Medicare Advantage Plans may offer a more economical alternative to a Medicare D plan. Medicare Advantage plans are marketed by private insurance companies and bundle a drug benefit with coverage for hospital and doctor fees. However the insurance company, not Medicare, decides which providers and services will be paid. A Medicare Advantage plan may restrict your choice of doctor or pharmacy. Or it may increase the amount you must pay out-of-pocket if you use doctors, hospitals or pharmacies that are not considered by the insurance company to be “preferred providers”.