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What is Medicare Part D?


Medicare Part D covers outpatient prescription drugs.


Do I have to enroll into a Part D plan?

Enrollment is voluntary. If you have drug coverage that meets the Medicare Part D creditable coverage standard of equal to or better than a standard Part D plan, you do not need a Part D plan. However, if you do not have creditable drug coverage, you will be charged a late enrollment penalty if you decide to enroll into a Part D plan at a later time.

The late enrollment penalty is 1% of the national base Part D premium times the number of full, uncovered months you didn’t have Part D or creditable coverage. In 2020, the national base premium is $32.74. The Part D penalty is in effect for life.

  • Example: Martin turned 65 in June 2015 and did not enroll into a Part D plan before his initial enrollment period (IEP) ended on September 30, 2015. Martin enrolled into a Part D plan with coverage effective January 1, 2017. Martin did not have drug coverage for 15 months after his IEP ended. His Part D late enrollment penalty is $4.91/month (15% of $32.74).
Are there different types of Medicare Part D plans?

Yes, there are two types of Medicare Part D drug plans.

Prescription Drug Plans (PDP)

You must have Medicare Part A OR Part B to enroll into a PDP. These plans provide Medicare Part D benefits only. You get your Part A and Part B benefits through Original Medicare.

Medicare Advantage Prescription Drug Plans (MA-PD)

Medicare Advantage drug plans are managed care plans that include Medicare HMOs, PPOs and SNP plans. These plans manage your Medicare A, B and D benefits. To enroll into a MAPD plan, you must have BOTH Medicare Part A AND Part B.

Persons who enroll into a MAPD HMO or SNP plan must use plan network providers to obtain their Medicare A, B and D services. Persons in MAPD PPO plans are permitted to receive services from non-network providers, but will pay higher copayments.

When can I enroll in a Medicare Part D plan or switch to another plan?
Initial Enrollment Period (IEP):
  • A seven month period that occurs when you first become eligible for Medicare.
  • It starts 3 months before the month of eligibility and ends 3 months later.
  • Example: February is the start date of your Medicare eligibility. Your initial enrollment period starts November 1st and ends May 31st.
Annual Election Period (AEP):
  • During October 15 - December 7 of each year, you can change your Medicare health or Part D Prescription Drug Plan coverage.
  • These changes are effective January 1 of the following year.
Medicare Advantage (MA-PD) Open Enrollment Period:
  • Between January 1- March 31, you can make the following changes if you have a Medicare Advantage Prescription Drug (MA-PD) plan:
Medicare D optionsSpecial Enrollment Period (SEP):

Situations in which you can change your Part D plan outside the standard enrollment periods:

  • Lose your employer/retiree coverage,
  • Move out of your Part D service area, or
  • Enter/leave a nursing home.

For a complete list of Part D special enrollment periods, see Enrollment Periods.

I have prescription drug coverage through a former employer. Do I need a Medicare drug plan?
  • If your drug coverage is considered “creditable drug coverage,” meaning it is as good as the standard Medicare drug benefit, you do not need a Medicare drug plan. If you are not sure, call your former employer or your insurance company.
  • If you lose creditable drug coverage through a former employer, you will have a special enrollment period of 63 days to enroll into a Medicare drug plan and you will not be charged a late enrollment penalty.
I have Medicare and Medi-Cal. Do I have to enroll in a Medicare drug plan? How much will it cost?

Persons who have Medicare and full Medi-Cal are required to have a Medicare Part D drug plan. If you do not voluntarily enroll into a Part D plan, Medicare will assign you to a Medicare Part D PDP plan.

Because you have full Medi-Cal, you will receive the maximum financial assistance with your prescription drugs:

  • You will pay 2020 copayments of $1.30 for generic drugs and $3.90 for brand name drugs;
  •  If you enroll into a subsidized PDP plan (also called a benchmark plan) you will pay no monthly premium. For a list of California benchmark PDP plans, click 2020 Benchmarks. If you enroll in a non-benchmark PDP plan, you will be responsible for paying a portion of the plan's monthly premium.

Medicare Part D plans do not cover all prescription drugs. Each Part D plan has its own list of covered drugs or formulary. Use the Medicare Part D drug plan search tool on the Medicare.gov website to choose a Part D plan. If you need help, contact the Center for Health Care Rights.

Learn more about how Medicare and Medi-Cal work together.

Are all the Medicare drug plans the same?

No. They have different:

  • Formularies. A formulary is a list of prescription drugs that the plan covers.
  • Premiums and co-payment costs. Each plan determines how much they will charge for covered drugs. To compare California Medicare drug plans, use the Medicare Part D drug search tool at Medicare.gov.
Are Part D plans permitted to restrict access to prescriptions covered by the plan?

Yes, Part D plans can require:

  • Prior Authorization:
    Your physician must obtain the Part D plan's approval for the prescription before the plan will pay for it.
  • Quantity Limits:
    Medicare Part D plans may limit the number (or amount) of drugs covered within a certain time period.
  • Step Therapy:
    You are required to try a less expensive drug on the Part D formulary that has been proven effective for most people with your medical condition before you can move up a "step" to a more expensive drug.
What prescription drugs are not covered by Medicare Part D plans?

The following prescription drugs are excluded under the Medicare Part D Program. This means that they cannot be covered by any Part D plan.

  • Over-the-counter drugs (even if they are prescribed by a physician);
  • Drugs for weight loss, anorexia, or weight gain (even if used for non-cosmetic purposes, such as to treat morbid obesity). Note that drugs to treat AIDS wasting and cachexia are not considered to be for cosmetic purposes and are therefore NOT excluded;
  • All medications used for the symptomatic relief of cough and colds;
  • Fertility drugs;
  • Drugs used for the treatment of erectile dysfunction (ED). ED drugs will meet the definition of a covered Part D drug when prescribed to treat medical conditions other than ED as approved by the FDA;
  • Drugs used for cosmetic purposes or hair growth. Drugs used in the treatment of acne, psoriasis, rosacea and vitiligo are not considered cosmetic;
  • Drugs purchased in another country;
  • Prescription vitamins and minerals products, except prescription niacin products, Vitamin D analogs (when used for a medically accepted indication), prenatal vitamins and fluoride preparations;
  • Drugs that may be covered under Medicare Part A or Part B such as nebulizer solutions, oral chemotherapy drugs, and immunosuppressive drugs.
How much does Medicare Part D cost in 2020?
  • Premiums: Premiums range from $0 to $118.40 per month.
  • Deductible: The annual deductible is $0 to 435. The deductible is the amount you pay before your drug plan pays your prescription drug costs.
  • Coverage Periods:

Your Monthly Premium

  • You will pay $0 to $118.40 for your Part D plan premium.

Your Out of Pocket Costs when you use your Part D Drug Plan

Annual Part D Deductible

  • If your Part D plan charges a deductible, it cannot be more than $435.

Initial Coverage Period

  • You pay 25% of the total cost for generic and brand name drugs.

Coverage Gap  “Doughnut Hole”

When your total drug costs reach $4,020, you pay:

  • 25% for generic and brand name drugs until your total drug costs are $9,038.75.

Catastrophic Coverage

When your total drug costs reach $9,038.75, you will pay:

  • 5% of the cost of the drug; or
  • $3.60 for generic drugs and $8.95 for brand name drugs.

Your Part D plan will send you information to help you keep track of your Part D drug costs.

  • Cost of Non-Formulary Prescriptions: You are responsible for full cost of prescriptions that are not covered by your Part D plan’s formulary. To obtain coverage of a non-formulary drug, you and your doctor must file a part D exception request. For more information see the question"What rights do I have if my Part D plan denies coverage of a drug I need?" below.
  • Part D Income Related Premium Adjustments: If your income is greater than $87,000/year for a single person or $174,000/year for a married couple, you will pay a Part D income related monthly adjustment (IRMAA) that is based on the income reported on your IRS tax return from two years prior. You will pay the Part D IRMAA in addition to your monthly Part D premium. The chart below lists the extra amount costs by income.

Table by Visualizer

What can I do if I need a drug that is not on my Part D plan's formulary?
  • You and your doctor have the right to file an exception request.
  • The exception request must explain: 1) why is the non-formulary drug medically necessary, and 2) why a drug covered by the plan formulary is not appropriate (e.g., it will not be as effective or would have an adverse effect).
  • The drug plan is responsible for reviewing your exception request.

Exception request timeframe

Criteria for expedited review: waiting for a standard decision may seriously jeopardize your health.

What rights do I have if my Part D plan denies coverage of a drug I need?

If your Part D plan denies a prior authorization or exception request, you have the right to appeal.

The levels of appeal are:

  • Level 1 – Redetermination: The first level of the appeal process is called the redetermination. You must file your redetermination request within 60 days of receiving your exception request decision. Your plan is responsible for reviewing the redetermination request.

The timeframe for an expedited and standard redetermination is shown below.

  • Level 2 – Reconsideration: If you redetermination request is denied, you can appeal by requesting reconsideration. You must file your reconsideration request within 60 days of receiving your redetermination decision. The reconsideration request is reviewed by an independent medical review entity, Maximus.

Maximus must make its decision as “expeditiously as the enrollee’s health condition requires.”

  • Level 3 – Administrative Law Judge Hearing: If your reconsideration is denied, you may appeal by requesting a hearing before an administrative law judge. You must request the hearing within 60 days of receiving the reconsideration decision. In 2020, to request an administrative law judge hearing there must be at least $160 at issue.

For more information on administrative law judge hearings, click Office of Medicare Hearings and Appeals.

  • Level 4 – Medicare Appeals Council Review: If the administrative law judge decision is unfavorable, you have 60 days to submit an appeal to the Medicare Appeals Council.

For more information on the Medicare Appeals Council, see Office of Medicare Hearings and Appeals.

  • Level 5 – Federal District Court: The final level of the appeals process is filing an appeal in federal district court. You must file your appeal within 60 days of receiving the Medicare Appeals Council decision. In 2018, to file an appeal in federal district court, there must be at least $1,600 at stake. You will need an attorney to file this level of appeal. The Part D appeals process applies to both PDPs and MA-PDs.
I don’t have Medi-Cal. Can I get financial assistance with my Part D expenses?

Yes, the Low income Subsidy (LIS) or Extra Help Program will help pay your Part D costs if you qualify.

  • There are two levels of assistance under the LIS Program; Full LIS Extra Help and Partial LIS Extra Help.
  • To qualify for the LIS Program, you must file an application with the Social Security Administration. You can apply for the program at any time.
  • The chart below outlines the LIS Program income and asset limits and the financial benefits provided by the program:

Full LIS Extra Help

Table by Visualizer

If you qualify for Full LIS Extra Help you pay:

  • No Part D drug plan annual deductible
  • Your Part D drug plan copayments will be $3.60 for generics and $8.95 for brand name drugs.
  • When your total Part D drug plan costs are greater than $6,350, Medicare pays 100% of covered costs.

Partial LIS Extra Help

Table by Visualizer

If you qualify for Partial LIS Extra Help you pay:

  • $0 - $89 Part D drug plan annual deductible
  • 15% of your Part D drug plan costs
  • When your total Part D drug plan costs are greater than $6,350, you pay $3.60-$8.95 or 5% of the drug cost

What is counted toward the LIS income limit?

  • Social Security benefits
  • Pensions
  • Earnings from your job. However, not all of your earned income will be counted.
  • Rental income

What is not counted as income?

  • In-kind support (Example: a family member provides you with $1,000 to help with living expenses.)

What is counted toward the LIS asset limit

  • Savings and checking accounts
  • Property other than the home you live in
  • Stocks, bonds, and other investments

What is not counted as an asset?

  • The home that you live in
  • Your cars
  • Life insurance policies

If you have full Medi-Cal benefits, you do not need to apply for LIS. You automatically qualify for LIS and pay $1.30 to $3.90 for your medications.

You can apply for LIS at your local Social Security office, or online at Extra Help Application.

For more information about Extra Help, call the Center for Health Care Rights at 800-824-0780.

What should I consider before selecting a Part D Drug Plan?