Medicare Prescription Drug Coverage (Part D)

If you think of “D” for Drugs, you’re on the right track! Medicare Part D helps cover the cost of prescription medications. But choosing the right plan isn’t always as simple as it sounds—there are several moving parts to consider to make sure your prescriptions are covered affordably and effectively.

🛒 How Do You Get Part D Coverage?

There are two ways you can receive Medicare Part D:

  1. Stand-Alone Prescription Drug Plan (PDP)
    This is typically paired with Original Medicare and a Medicare Supplement (Medigap) plan.

  2. Medicare Advantage Plan (MAPD)
    These plans combine medical and drug coverage under one policy. If you enroll in an Advantage plan that includes drug coverage, you don’t need a separate Part D plan.

While the delivery methods differ, both types of Part D coverage operate under the same rules and coverage stages.

🔄 Understanding the 4 Stages of Part D Coverage

Medicare Part D includes four coverage stages that you may move through during the year. These stages reset each January.

1️⃣ Deductible Stage:

You’ll pay the full cost of your prescriptions until you meet your plan’s annual deductible. (Some plans have no deductible, or only apply it to higher tiers.)

2️⃣ Initial Coverage Stage:

After meeting your deductible, your plan begins helping with costs.
You’ll pay a fixed copay or percentage of the drug cost based on its tier, and your insurance will pay the rest.

3️⃣ Coverage Gap (Donut Hole):

Once your total drug costs (your share + the plan’s share) reach a certain limit for the year, you’ll enter the Coverage Gap.

📌 In 2025, this limit is $5,030.
While in the gap, you’ll pay 25% of the cost for most drugs until you reach the next stage.

4️⃣ Catastrophic Coverage Stage:

Once your out-of-pocket drug spending hits $8,000 for the year, you enter this final stage.
You’ll then pay $0 for your prescriptions for the rest of the calendar year.

📆 Annual Reset:

At the start of each new year, your Part D plan resets back to Stage 1, and the dollar limits may change. It's important to review your coverage annually to avoid surprises and make sure your medications are still covered affordably.

💡 Tip: Costs in the Gap?

If you're concerned about medication costs in the Coverage Gap, there are resources and assistance programs that may help. Reach out and we’ll help you explore your options!

📞 Need help reviewing your Part D plan or checking which plan covers your prescriptions best?
Let’s talk—I’ll help you compare options, check formularies, and simplify the process.

The information provided on this website is intended to help you better understand your Medicare choices. While it is based on publicly available sources such as Medicare.gov and the Centers for Medicare & Medicaid Services (CMS), this content has been created by Peterson Insurance Solutions, operating under the brand Faithfully Planned. We are not affiliated with or endorsed by the federal government or the Medicare program. For personalized advice, please consult official resources or speak directly with a licensed insurance agent.