Medicare Prescription Drug plans, or Medicare Part D, are available through and coordinated by Medicare-approved private insurance companies. Beneficiaries who are eligible for Original Medicare, Part A and/or Part B and are permanent residents of the Medicare Prescription Drug Plan service area can enroll in Medicare Part D. Medicare Prescription Drug coverage is optional, but if you don’t enroll in Part D as soon as you’re eligible, you might pay a late-enrollment penalty for enrolling later.
There are stand-alone Medicare Prescription Drug plans that work alongside Original Medicare (Parts A and B) and there are Medicare Advantage plans with prescription drug coverage, called Medicare Advantage Prescription Drug (MAPD) plans.
Every medication covered by a Medicare Part D plan has a fixed copay or coinsurance that determines the cost. Medications are sorted into tiers, based on their cost, and laid out in a formulary provided by the carrier. Using the formularies, you can compare the costs of your medications across the available plans to find the best overall value.