Several orange prescription bottles sit on top of a $100 bill.

Saving Money with Medicare Part D

Each fall you have the opportunity to review your Medicare Part D plan to make sure it meets your needs and saves you the most amount of money possible!

But first, what is Medicare Part D?

Medicare Part D is prescription drug coverage. Part D plans are offered by private insurance companies. If you have Original Medicare (Parts A and B together), you can buy a Part D prescription drug plan. Most Part C plans (Medicare Advantage) also include Part D coverage for prescription drugs. If you have a Part C plan without drug coverage, you can buy a Part D plan.

To learn more about the different “parts” of Medicare, read our Extended Quick Guide to Medicare, or watch our award-winning Medicare Animated Video Series.

Prescription Drug Terms You Need to Know

  • Brand-name drugs are prescription drugs with a specific name from the company that sells the drug.
  • Generic drugs are prescription drugs with the same chemical substance as a brand-name drug.
  • Specialty drugs are prescription drugs that have a high cost, are complex, or require special handling.
  • The formulary is the list of drugs covered by a particular plan.

What Does Medicare Part D Cover?

The formulary varies from plan to plan, and from year to year. Generally, your plan will only cover the drugs on the formulary, but it is possible to ask for an exception to have other drugs covered. If your plan does approve a non-formulary drug, you may have higher out-of-pocket costs. Certain drugs are excluded from Part D plans, including:

  • Over-the-counter medications (e.g., cough and cold medications), vitamins, and minerals
  • Weight loss/gain, fertility, erectile dysfunction, cosmetic, and hair growth drugs
  • Drugs purchased in another country or drugs that may be covered under Medicare Part A or B

You can learn more about what Part D covers by visiting

Medicare Part D Costs

What you pay each month for a Part D plan is called your premium. Your Part D monthly premium will depend on the plan you choose and your income level. Part D has a yearly deductible, which is an amount you pay first, before the plan starts to pay anything for your prescription drugs.

In 2022, the maximum deductible for a Part D plan is $480. After you pay the deductible, Medicare pays 75% of your drug costs and you pay 25%. What you pay is called your “out-of-pocket” costs, because you pay for them out-of-your own pocket. “Out-of-pocket costs” do not include your monthly premium. When your total out-of-pocket drug costs reach $7,050 in 2022, Medicare will cover 95% of your drug costs for the rest of the year. You pay the greater of 5% of the retail cost or $9.85 for brand-name drugs ($3.95 for generics). There is no out-of-pocket maximum for Part D plans.

Each month, you will get an Explanation of Benefits (EOB) notice from your drug plan. It shows how much you have paid for drugs during the period, and how much more you still need to pay to move to the next phase of coverage.

Formulary Tiers

Understanding a plan’s formulary will save you money. Formularies may have two or more cost levels, called tiers. A drug on a higher tier will have higher costs for you. The highest tier in most formularies is the “specialty” tier, which includes many cancer drugs. The co-payment and co-insurance amounts will depend on the tier of the drug you are taking. For example, a tier 1 drug may have a $10 co-payment, while a tier 5 specialty drug may have a 30% co-insurance amount. Make sure the plan you choose covers the prescription drugs that you take.

Help Paying For Your Medications

Cancer medications are often very expensive, but Medicare has programs that may help you pay for your drug costs. If you are eligible based on your income and resources, the Medicare Extra Help program will pay your Part D premiums, deductibles, and co-insurance amounts.

Learn more and apply for Extra Help through the Social Security Administration (SSA)

If you don’t qualify for Extra Help, your state may have a State Pharmaceutical Assistance Program to help pay for Part D premiums or drug costs. There are also organizations that provide financial assistance to help with your expenses. Visit to find help with prescription drugs and other financial assistance options.

Good News for Consumers Starting in 2025

Thanks to the Inflation Reduction Act, beginning 2025, the out-of-pocket expenses for prescription drugs will be capped at $2,000 for the year. This applies to people with Medicare who have prescription drug coverage through a Part D plan, or through a Part C Medicare Advantage Plan.

It also allows people to spread out their out-of-pocket costs throughout the year, in monthly payments, rather than having to pay a large amount up front to get care.

Read our recent blog to learn more about all the benefits of the Inflation Reduction Act of 2022.

Medicare Part D Enrollment Periods

You must sign up for a Part D plan when you are first eligible for Medicare, or you may have to pay a late enrollment penalty fee if you decide to buy a Part D plan in the future. But, if you have other health insurance, like from an employer, you may be able to wait to sign up for a Part D plan without a penalty. For more information about enrollment periods, see our Quick Guide to Medicare Part D.

Don’t forget that Medicare Open Enrollment begins on October 15 and lasts through December 7. Open Enrollment is the standard time of year when you can switch your Medicare Part D plan. If you need help determining what Medicare Part D plan is best for you, visit our Medicare Materials & Resources page, and download our Medicare Plan Comparison Worksheet.

About Triage Cancer

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