Medicare Part D covers outpatient prescription drugs you get at the pharmacy. You don’t automatically get Part D with Medicare; you must sign up for it. Private health insurance companies sell Part D plans, but they have to follow rules established by the federal government. Part D is technically optional, but going without prescription drug coverage is risky. If you don’t sign up when you first become eligible, there are significant, permanent penalties for enrolling later.
You pay a monthly premium to an insurance company for your Part D plan. You will have an annual deductible to meet and pay copays or a percentage of the drug’s cost. Each Medicare prescription drug plan has a list of covered drugs called its formulary. The formulary has medications in Tiers 1-5; the lower the tier, the less you have to pay for your medication.
