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What is Medicare Part D?

Medicare Part D is prescription drug coverage available to anyone with Medicare Part A and/or Part B. We cover everything you need to know, including coverage, costs, and eligibility.

The Four Parts of Medicare

Medicare consists of four basic parts: Part A, Part B, Part C, and Part D. Generally, the different parts of Medicare help cover specific services. Depending on your situation, you can get Medicare coverage through a combination of these parts. Our advisors can help determine the combination of these four parts that is right for you. Call us at 937.915.3563 to begin your journey. 

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What does Medicare Part D cover?

Medicare drug coverage (Part D) helps pay for prescription drugs (Rx) you need. Part D plans are offered by private insurance companies and provide prescription drug coverage to individuals living in a plan’s service area.

All plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain “protected classes,” like drugs to treat cancer or HIV/AIDS. A plan’s list of covered drugs is called a “formulary,” and each plan has its own formulary. Medicare drug coverage typically places drugs into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost. For example, a drug in a lower tier will generally cost you less than a drug in a higher tier. 


There are two ways to get Medicare drug coverage (Part D):

1. Medicare drug plans. These plans add Medicare drug coverage (Part D) to Original Medicare. You must have Part A and/or Part B to purchase a separate Medicare drug plan. Medicare Supplement plans do not include prescription coverage and therefore require enrollees to purchase a separate Part D plan.

2. Medicare Advantage Prescription Drug (MAPD) plans. These Medicare Advantage plans (Part C) roll Part A (hospital-related), Part B (medical-related), and Part D (prescription drug) benefits into one plan.

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What does Medicare Part D cost in 2024?

Actual costs of Part D plans, as well as the amount you pay for your medications, are set by the insurance companies, and approved by the government. Your costs will vary based on the medications that you take and the plan you choose. 

Most Part D plans include:

  • A monthly premium
  • An annual deductible
  • A prescription drug formulary
  • Copays and/or coinsurance per drug
  • Coverage phases (Deductible, Initial Coverage Phase, the Coverage Gap―also known as the Donut Hole, and the Catastrophic Coverage Phase)                                                                                                                                                          

What is the Part D donut hole?

The formal term for this period is the “coverage gap.” It refers to a gap in Medicare Part D prescription coverage―a short-term limit on what costs the drug plan will cover. When Medicare beneficiaries reach this gap, their out-of-pocket cost responsibility changes. In 2024, individuals enter the donut hole once the value of their covered prescriptions has reached $5,030. The coverage gap threshold can change each year. Read more about the Part D donut hole here.


2024 Part D Income-Related Premium Adjustment Amounts

If your income is above a certain level, you will also pay a Part D surcharge. This additional charge is due on top of your plan’s monthly premium.

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What is the Medicare Part D late enrollment penalty?

You may have to pay a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don't have Medicare drug coverage or other creditable prescription drug coverage. The late enrollment penalty is an amount that can be added to your Medicare drug coverage (Part D) premium. You may have to pay the penalty for as long as you have Medicare drug coverage. 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” ($34.70 in 2024) times the number of full, uncovered months you didn't have Part D or creditable coverage. This monthly premium is added to your monthly Part D premium. For more information about the late enrollment penalty and how to avoid it, call our advisors at 937.915.3563.  


Medicare Part D Eligibility

You are eligible for Part D if you’re eligible for Medicare. You must have Medicare Part A and/or Part B to enroll in Part D.

Individuals must be a U.S. citizen or permanent legal resident for at least five consecutive years. You must also meet at least one of the following criteria for Medicare eligibility:

  • Age 65 or older 
  • Are permanently disabled and have received disability benefits for at least two years 
  • Have been diagnosed with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s disease)

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When to Apply for Medicare

Initial Enrollment Period

When you're first eligible for Medicare, you have a 7-month Initial Enrollment Period. If you are eligible for Medicare when you turn 65, you can sign up during the 7-month period that begins three months before the month you turn 65, includes the month you turn 65, and ends three months after you turn 65. We recommend contacting one of our expert advisors for Medicare advice approximately six months before you turn 65. Learn more about working past 65 and Medicare.

Special Enrollment Period

After your Initial Enrollment Period is over, you may have the opportunity to sign up for Medicare during a Special Enrollment Period (SEP) without having to pay a late enrollment penalty. These are granted due to special circumstances, such as losing or leaving employer coverage, or moving out of your plan’s area.


How to Sign Up for Medicare

If you are not automatically enrolled in Medicare, give us a call at 937.915.3563 and we'll help you understand the steps you need to take and your individual timeline. If you are coming off group coverage, you will want to be sure your Medicare effective date lines up with the end of your other insurance coverage.

When can you enroll in, switch, or drop a Medicare Part D plan?

  • Initial Enrollment Period
  • Special Enrollment Period
  • Annual Enrollment Period (Oct. 15 – Dec. 7)
  • Medicare Advantage Open Enrollment Period (Jan. 1 – March 31) when you can change your Medicare Advantage plan to a different one, or switch to Original Medicare (and join a separate Medicare drug plan) once during this time. It is not an option to switch from one stand-alone drug plan to another stand-alone drug plan.


Working Past Age 65 and Medicare Enrollment

Retirement is not a requirement for enjoying the benefits of Medicare. Many individuals aged 65 and older are delaying retirement and staying in the workforce. If you’re working past age 65, you can sign up for Medicare regardless of your current employment status. 

We make it easy to enroll in Medicare without retiring. Our advisors provide personalized guidance to help you choose the health plan that is right for you.


Questions? Your local partner in Medicare has answers.

If you have questions about your plan options or deferring Medicare Part A, contact our team of advisors in Dayton and Cincinnati.

Email us at, call us at 937.915.3563, or schedule an appointment to speak with an advisor. 

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