Medicare offers prescription drug coverage thru private carriers to everyone with Medicare. If you decide not to join a Medicare Prescription Drug Plan when you're first eligible, and you don't have other creditable prescription drug coverage, or you don't get Extra Help, you'll likely pay a late enrollment penalty. To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.

2 ways to get 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 plans that offer 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.

What drug plans cover

Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary).A formulary consists of different tier levels for medications. Drugs in each tier have a different cost. The lower the tier level typically the lover the cost. Most PDP’s will have a deductible.

All Medicare policies that contain PDP coverage follow the Medicare guidelines for the Coverage Gap, or “Donut Hole” as it is called. As of 2022 if your total drug costs to you and the policy add up to $4,430 you will pay 25% of both Generic and Prescribed medications in the donut hole. Another reason to work with an insurance agent to try to avoid this situation.