Medicare Prescription Drug Coverage: Start with the Basics

It’s important to understand how Medicare helps pay for medications and how it applies to you. But we know it can be overwhelming. That’s why we are here to help you learn the basics, before making your decision.

Whether you take many medications or none at all, enrolling in Medicare prescription drug coverage is voluntary and it can help protect you from unexpected high costs.

Avoid paying a penalty

If you do not enroll when you are first eligible, or do not have creditable coverage, Medicare will add a late enrollment penalty to your monthly premium – that means you may pay a penalty for as long as you have Part D 1.

Before exploring Blue MedicareRx plans (PDP), let’s take a look at the basics.

About Part D

What it is, what it covers, and how you can get this coverage. Find out what Medicare drug coverage is available to you.

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When to Enroll

Sign-up starts before you turn 65 or are first eligible for Medicare. Generally, there are three enrollment periods.

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Coverage Stages

Medicare has four stages, ending with the coverage gap and catastrophic coverage. The amount covered by your plan in each stage will affect the amount you pay for medications.

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Choosing a Plan

How to zero in on the plan for you. Weighing your options is easier when you know what to look for.

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Medicare Part D words to know


A list of drugs covered by your plan, including generic and brand-name options. Using these drugs will generally save you money.


Drugs are organized on the formulary by tiers, and each tier is assigned a copay or coinsurance amount. Generally, a drug on a lower tier will cost you less than a drug on a higher tier.


The amount you pay each plan year before the plan begins to share the costs. Some plans have no deductible, and some deductibles only apply to drugs on specific tiers.

Preferred pharmacy network

Pharmacies where you can enjoy preferred cost-sharing (the lowest copays and coinsurance) when filling prescriptions.

Creditable coverage

Drug coverage provided by an employer or union that is at least as good as the Medicare Part D benefit. Plans are required to provide a letter or notice of creditable coverage to any Medicare eligible beneficiaries.

1 If you do not enroll in a Part D plan when you are first eligible, Medicare may add a late enrollment penalty (LEP) to your monthly premium when you do sign up. That penalty amount may increase the longer you go without Part D coverage, and the resulting penalty will be included in your required premium payment as long as you are enrolled in Part D. You can also have an LEP imposed if you drop Part D coverage. Back