Prescription Drug Plans

Did you know? 1 in 5 U.S. adults over 65 takes 5+ prescription drugs daily 3. If you’re on Medicare — or about to be — Prescription Drug Plans (PDPs) are your key to affordable meds. Let’s break it down.

What is a Prescription Drug Plan (PDP)?

A PDP (also called “Medicare Part D”) is insurance that helps cover the cost of your take-home prescription drugs.

Think of it as a discount card for meds, run by private insurers approved by Medicare.

Key things

Not automatic: You must enroll separately if you have Original Medicare (Parts A & B).
Two ways to get it, 1. Stand-alone PDP: Added to Original Medicare. 2. Medicare Advantage (Part C): Bundles medical + drug coverage (most include PDPs).
Covers most common meds: Like blood pressure pills, insulin, antidepressants, and more.

Who Needs a PDP?

Almost everyone on Medicare!

Even if you don’t take meds now: Skip enrollment? You’ll pay a lifetime penalty if you join later (unless you have other coverage, like from an employer).

Enroll when you first get Medicare (during your 7-month Initial Enrollment Period).

How PDPs Work: 4 Key Points

1. The “Formulary” (Your Plan’s Drug List)

Every PDP has a list of covered drugs. Check it before enrolling!

Tiers = Cost levels: Lower tiers = lower costs.

Example tier structure

Tier Cost Drugs included

1 $ Generic (e.g., Metformin)

2 $$ Preferred brands

3 $$$ Non-preferred brands

4+ $$$$ Specialty drugs (e.g., cancer meds)

2. Your Costs

Example tier structure
Tier	Cost	Drugs included
1	$	Generic (e.g., Metformin)
2	$$	Preferred brands
3	$$$	Non-preferred brands
4+	$$$$	Specialty drugs (e.g., cancer meds)

Monthly premium: Average $46.50 (2025).
Deductible: Up to $590/year (some plans: $0).
Copays: Fixed fees per prescription (e.g., $10 for generics).
Coinsurance: % of drug cost (e.g., 25% of a $100 drug = $25).

3. The $2,000 Cap (HUGE 2025 Update!)

Starting in 2025: You’ll NEVER pay more than $2,000/year out-of-pocket for covered drugs.

After hitting $2,000, you pay $0 for the rest of the year.

4. Special Rules

Some drugs require:

Prior authorization: Doctor must prove you need it.
Step therapy: Try cheaper drugs first.
Quantity limits: E.g., 30 pills/month.

Why Get a PDP?

Avoid penalties: Enroll when first eligible.
Peace of mind: Covers unexpected prescriptions.
Maximize savings: Use the $2,000 cap + Extra Help if eligible.