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Part D: Prescription Coverage

Ensure that your prescriptions are covered by your plan.

Prescription Drug Plans

Prescription Drug Plans (PDPs) are offered by private insurance companies approved by Medicare. Your choices will vary depending on where you live.

You can get drug coverage with a standalone Part D plan or as part of a Medicare Advantage plan (Part C).

In order to enroll into a Part D plan, medicare beneficiaries must be enrolled in Part B.

Two Ways To Get Part D

Option 1: You can get Medicare Part D coverage through a stand-alone Medicare Prescription Drug Plan if you’re enrolled in Original Medicare.

Option 2: If you’re enrolled in a Medicare Advantage plan, you can get this coverage through a plan that includes drug benefits, also known as a Medicare Advantage Prescription Drug Plan (MAPD).

Formularies & Drug Coverage

Every Medicare Prescription Drug Plan has a formulary — that is, a list of covered drugs. The formularies vary among plans.

Late Enrollment Penalty

Medicare Part D 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 if you enroll later. You can use this calculator to estimate your Late Enrollment 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” ($33.37 in 2022) 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 increase each year, so your penalty amount may also increase each year.

Coverage GAP

The coverage gap, commonly referred to ask “The Donut Hole” has several phases. The coverage gap is a temporary limit on what most Part D Prescription Drug Plans or Medicare Advantage Prescription Drug plans pay for prescription drug costs. While you’re in the coverage gap, you might pay higher costs for brand-name and generic drugs. Below we’ve described each phase:

Deductible phase: For most stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans, you’ll pay 100% for medication costs until you reach the yearly deductible amount (if your plan has one). The standard deductible for 2022 is $480.

Initial coverage phase: After you’ve reached the deductible, you’ll enter the initial coverage phase, where you will pay the plan’s cost share for covered medications. For example, if your plan benefit includes a 25% coinsurance in this phase and you’re taking a medication that costs $400 a month, your out-of-pocket-cost would be approximately $100 a month.

Coverage gap, also known as the “donut hole”: Begins when you, and your plan, spend a combined $4,430 in 2022. While in the coverage gap, you’ll pay 25% of the plan’s cost for brand-name drugs and generic drugs. You’re out of the coverage gap once your yearly out-of-pocket drug costs reach $7,050 in 2022.

Catastrophic coverage phase: Begins if your out-of-pocket costs reach $7,050 in 2022. During the catastrophic coverage phase, you’ll only pay a small coinsurance or copayment for covered prescription drugs for the remainder of the year.

Read more about the donut hole and whether or not it will affect you.


It can be a good idea to review your Medicare Prescription Drug Plan coverage every year, to see if your plan covers the medications you need now and may need in the upcoming year.

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Frequently Asked Questions

How much is the Part D penalty?


In 2022, Medicare recalculated an individual’s penalty using the 2022 base beneficiary premium ($33.37). So, an individual’s new monthly penalty in 2022 is 1% of $33.37. So if they have been without creditable drug coverage for 36 months, their penalty would be $12.01 each month. Since the monthly penalty is always rounded to the nearest $0.10, this person pays $12.00 each month in addition to their plan’s monthly premium.

Here’s the math:

.36 (36% penalty) × $33.37 (2022 base beneficiary premium) = $12.0132

$12.0132 rounded to the nearest $0.10 = $12.00

$12.00 = This individual’s monthly late enrollment penalty for 2022

How can Buffer Insurance help me with finding a Part D plan?

Our staff take into consideration all of your prescriptions, dosage amounts and even the pharmacy you shop at, to create a comprehensive comparison of standalone Prescription Drug Plans or Medicare plans that include prescriptions.

We offer a complimentary analysis for you to keep.

Free Prescription Analysis

Are you overpaying for your prescriptions? Let us run an analysis to see which plan is least costly for you.