How To Get Prescription Drug Coverage

Medicare prescription drug coverage is an optional benefit offered to everyone who has Medicare. This page explains how to get prescription drug coverage and offers tips for making the right choices for you.

If you decide not to get Medicare drug coverage when you're first eligible, you'll likely pay a late enrollment penalty if you join later, unless one of these applies:

Generally, you'll pay this penalty for as long as you have Medicare prescription drug coverage.

To get Medicare drug coverage, you must join a Medicare plan that offers prescription drug coverage. Each plan can vary in cost and drugs covered.

2 Ways To Get Prescription Drug Coverage

  1. Medicare Prescription Drug Plan (Part D) . These plans (sometimes called "PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.


           2. Medicare Advantage Plan (Part C) like an HMO or PPO) or other Medicare      health plan  that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.


Copayment/Coinsurance With Prescription Drug Plans

After you pay your plan's deductible (if your plan has one), the amount you pay for each prescription is either:

  • A copayment . With a copayment, you pay a set amount (like $10) for all drugs on a tier. You may pay a lower copayment for generic drugs than brand-name drugs.

  • Coinsurance . With coinsurance, you pay a percentage of the cost (like 25%) of the drug.

Some Medicare Prescription Drug Plans have levels or "tiers" of copayments/coinsurance, with different costs for different types of drugs.

Note: The amount you pay for a covered prescription is usually for a one-month supply of a drug. However, you can request less than a one-month supply. You might do this if you’re trying a new medication or you want to synchronize refills for your medications.

If you get less than a one-month supply, the amount you pay is reduced based on the amount you actually get. Talk with your prescriber to get a prescription for less than a one-month supply.


Consider All Your Drug Coverage Choices

Before you make a decision, talk with your agent or broker and learn how prescription drug coverage works with your other drug coverage

For example, you may have drug coverage from an employer or union, TRICARE, the Department of Veterans Affairs (VA), the Indian Health Service, or a Medicare Supplement Insurance (Medigap) policy. Compare your current coverage to Medicare drug coverage. The drug coverage you already have may change because of Medicare drug coverage, so consider all your coverage options.

If you have (or are eligible for) other types of drug coverage, read all the materials you get from your insurer or plan provider. Talk to your benefits administrator, insurer, or plan provider before you make any changes to your current coverage.

Joining a Medicare Drug Plan May Affect Your Medicare Advantage Plan  

Your Medicare Advantage Plan (Part C) will disenroll you and you'll go back to Original Medicare if both of these apply:

  • Your Medicare Advantage Plan includes prescription drug coverage.
  • You join a Medicare Prescription Drug Plan (Part D).


Monthly Premium For Drug Plans

Most Medicare Prescription Drug Plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you join a Medicare Advantage Plan (Part C) or Medicare Cost Plan that includes Medicare prescription drug coverage, the plan's monthly premium may include an amount for drug coverage.

Note: The same insurance company may offer Medigap policies and Medicare Prescription Drug Plans.

If you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make 2 separate premium payments for your coverage. Contact your insurance company for more details.

Get Your Premium Automatically Deducted

Contact your drug plan (not Social Security) if you want your premium deducted from your monthly Social Security payment. Your first deduction will usually take 3 months to start, and 3 months of premiums will likely be deducted at once.

After that, only one premium will be deducted each month. You may also see a delay in premiums being withheld if you switch plans. If you want to stop premium deductions and get billed directly, contact your drug plan.

How Much Does Part D Cost?

Most people only pay their Part D premium. If you don't sign up for Part D when you're first eligible, you may have to pay a Part D late enrollment penalty.

If your modified adjusted gross income is above a certain amount, you may pay a Part D income-related monthly adjustment amount (Part D IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS). You'll pay the Part D IRMAA amount in addition to your monthly plan premium, and this extra amount is paid directly to Medicare, not to your plan. The chart below lists the extra amount costs by income.

Social Security will contact you if you have to pay Part D IRMAA, based on your income. The amount you pay can change each year. If you have to pay a higher amount for your Part D premium and you disagree (for example, if your income goes down), use this form to contact Social Security [PDF, 125 KB].  If you have questions about your Medicare prescription drug coverage, contact your plan.

Note:  The extra amount you have to pay isn’t part of your plan premium. You don’t pay the extra amount to your plan. Most people have the extra amount taken from their Social Security check. If the amount isn’t taken from your check, you’ll get a bill from Medicare or the Railroad Retirement Board. You must pay this amount to keep your Part D coverage. You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage.

If Social Security notifies you about paying a higher amount for your Part D coverage, you’re required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D IRMAA).  If you don’t pay the Part D IRMAA, you’ll lose your Part D coverage.

Employer/Union Coverage & Part D IRMAA

Note:  You pay your Part D IRMAA directly to Medicare, not to your plan or employer.

You’re required to pay the Part D IRMAA, even if your employer or a third party (like a teacher’s union or a retirement system) pays for your Part D plan premiums. If you don’t pay the Part D IRMAA and get disenrolled, you may also lose your retirement coverage and you may not be able to get it back.

Things To Remember

  • Pay your Part D IRMAA bill to Medicare as soon as you get it. Find out how to pay your bill. Keep your address current with Social Security, even if you don’t get a Social Security check.


Part D Late Enrollment Penalty

The late enrollment penalty is an amount added to your Medicare Part D monthly premium. You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

  • A Medicare Prescription Drug Plan (Part D)
  • A Medicare Advantage Plan (Part C) (like an HMO or PPO) or another Medicare health plan that offers Medicare prescription drug coverage
  • Creditable prescription drug coverage

Learn how to avoid the late enrollment penalty.

How Much Is The Part D Penalty?

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($32.74 in 2020) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.

The national base beneficiary premium may change each year, so your penalty amount may also change each year.


Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2016. She doesn't have prescription drug coverage from any other source. She didn't join by May 31, 2016, and instead joined during the Open Enrollment Period that ended December 7, 2018. Her drug coverage was effective January 1, 2019.


Since Mrs. Martinez was without creditable prescription drug coverage from June 2016–December 2018, her penalty in 2019 was 31% (1% for each of the 31 months) of $33.19 (the national base beneficiary premium for 2019) or $10.29. Since the monthly penalty is always rounded to the nearest $0.10, she paid $10.30 each month in addition to her plan's monthly premium.

Here's the math:

.31 (31% penalty) × $33.19 (2019 base beneficiary premium) = $10.29

$10.29 rounded to the nearest $0.10 = $10.30

$10.30 = Mrs. Martinez's monthly late enrollment penalty for 2019


In 2020, Medicare recalculated Mrs. Martinez's penalty using the 2020 base beneficiary premium ($32.74). So, Mrs. Martinez's new monthly penalty in 2020 is 31% of $32.74 or $10.15 each month. Since the monthly penalty is always rounded to the nearest $0.10, she pays $10.20 each month in addition to her plan's monthly premium.

Here's the math:

.31 (31% penalty) × $32.74 (2020 base beneficiary premium) = $10.15

$10.15 rounded to the nearest $0.10 = $10.20

$10.20 = Mrs. Martinez's monthly late enrollment penalty for 2020

How Do I Know If I Owe A Penalty?

After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. In general, you'll have to pay this penalty for as long as you have a Medicare drug plan.

What if I Don't Agree With The Late Enrollment Penalty?

You may be able to ask for a "reconsideration." Your drug plan will send information about how to request a reconsideration.

Complete the form, and return it to the address or fax number listed on the form.  You must do this within 60 days from the date on the letter telling you that you owe a late enrollment penalty. Also send any proof that supports your case, like a copy of your notice of creditable prescription drug coverage from an employer or union plan.

Do I Have To Pay The Penalty Even If I Don't Agree With It?

By law, the late enrollment penalty is part of the premium, so you must pay the penalty with the premium. You must also pay the penalty even if you've asked for a reconsideration. Medicare drug plans can disenroll members who don't pay their premiums, including the late enrollment penalty portion of the premium.

How Soon Will I Get A Reconsideration Decision?

In general, Medicare’s contractor makes reconsideration decisions within 90 days. The contractor will try to make a decision as quickly as possible. However, you may request an extension. Or, for good cause, Medicare’s contractor may take an additional 14 days to resolve your case.

What Happens If Medicare's Contractor Decides The Penalty Is Wrong?

If Medicare’s contractor decides that all or part of your late enrollment penalty is wrong, the Medicare contractor will send you and your drug plan a letter explaining its decision. Your Medicare drug plan will remove or reduce your late enrollment penalty. The plan will send you a letter that shows the correct premium amount and explains whether you'll get a refund.

What Happens If Medicare's Contractor Decides The Penalty Is Correct?

If Medicare’s contractor decides that your late enrollment penalty is correct, the Medicare contractor will send you a letter explaining the decision, and you must pay the penalty.



How To Switch Your Medicare Drug Plan

You can switch to a new Medicare drug plan by joining another drug plan during one of these times.

Note:  You don't need to cancel your old Medicare drug plan. Your old Medicare drug plan coverage will end when your new drug plan begins.

If you want to join a plan or switch plans, do so as soon as possible so that you’ll have your membership card when your coverage begins, and you can get your prescriptions filled without delay.

You should get a letter from your new Medicare drug plan telling you when your coverage begins.

Don't give personal information to plans that call you unless you're already a member of the plan.