Full Definition

Medicare Part D plans are sold by private insurers that contract with CMS. Each plan covers a specific list of drugs (called a formulary) at varying cost-sharing tiers. Beneficiaries pay a monthly premium (which varies by plan), an annual deductible (if applicable), and copayments or coinsurance for each prescription.

Part D plans are available as standalone Prescription Drug Plans (PDPs) paired with Original Medicare, or as part of Medicare Advantage plans (MA-PD). In either case, coverage is through a private insurer.

For seniors in assisted living or skilled nursing facilities, medication management is particularly important — Part D coverage must be confirmed for all prescribed medications before admission to avoid unexpected costs. Some medications require prior authorization or step therapy (trying a cheaper alternative first). In SNFs, Medicare Part D coordinates with Part A during a covered SNF stay.