Prescription Drug Plans FAQ

Medicare Part D Prescription Drug Plans Coverage and Costs

Frequently Asked Questions.

Medicare Part D Prescription Drug Plans coverage is insurance provided by private companies that provide prescription drug coverage for people on Medicare. Part D became effective in 2006. Private plans like Cigna are approved to administer the plans by the U.S. Federal Government through CMS (Centers for Medicare and Medicaid Services).

Medicare Part D prescription drug coverage is available for purchase to everyone entitled to Medicare Part A and/or enrolled in Part B. The Medicare drug benefit should help reduce prescription drug costs and help protect against higher (catastrophic) costs in the future. Once you have Medicare prescription drug coverage, you will pay some of the costs and Medicare will pay some of the costs. Your costs will vary depending on the plan you choose.

Anyone who is entitled to Medicare Part A and/or enrolled in Medicare Part B is eligible to enroll in a Medicare Part D Prescription Drug Plan, regardless of income. No physical exams are required. Nobody can be denied for health reasons.

You’ll need to enroll in a Medicare Part D Prescription Drug Plan offered in your area when you turn 65 (you can enroll 3 months before or after your birthday), and you can switch plans annually during open enrollment. Medicare open enrollment occurs yearly from October 15 through December 7. This is typically the only time of year that you can change plans.

You can receive Medicare Part D Drug Coverage from a:

  • Medicare Part D Prescription Drug Plans (PDP), which just provides drug coverage, or a
  • Medicare Advantage Prescription Drug Plans (MAPD) plan, which provides medical and prescription drug coverage.

If you have prescription drug coverage through your employer, you should talk to your plan or benefits administrator before making any changes.

Medicare provides assistance, known as Extra Help, in paying for prescription drug costs for those with limited income and resources.

If you qualify, you will receive help paying for your Medicare Part D Prescription Drug Plan's monthly premium, annual deductible (if applicable), and prescription copays or coinsurance. This Extra Help will count towards your out-of-pocket expenses.

People who receive full Medicaid benefits are automatically eligible for Extra Help with their drug costs and do not need to apply separately for the Extra Help. Medicare will mail a letter to people who automatically qualify for this assistance.

People who receive any help from Medicaid paying their Medicare premiums or receive Supplemental Security Income automatically receive Extra Help and do not need to apply separately. However, these individuals will need to enroll in a Medicare prescription drug plan.

Those who do not receive assistance from Medicaid but have limited income and resources are encouraged to apply for Extra Help and enroll in a Medicare drug plan. To receive assistance with the Medicare drug benefit, you must complete the following steps:

  • Apply for Extra Help based on your income and resources; and
  • Sign up for a prescription drug plan to begin using the benefit.

No. There could be differences in monthly premium, deductible, covered drugs, copay, or coinsurance levels and the pharmacies that you can use (network). Some plans offer supplemental benefits, such as additional prescription drug coverage, in the coverage gap. To determine which plan is best for you, compare plans in your area to learn what your benefits and estimated costs will be.

Your plan provides prescription drug coverage for a calendar year, from January 1 through December 31.

Your plan benefits may change every year. This includes your premiums, deductibles, copays, pharmacy network, and drug list.

You will learn of any changes to your plan for the next year in the Annual Notice of Changes (ANOC) booklet. You will receive this package in the mail every September.

You have a limited time to enroll every year. Medicare open enrollment occurs yearly from October 15 through December 7. This is typically the only time of year that you can change plans.

You can decide to keep or change your plan for the next year. If you choose to stay in your Medicare drug plan for the next year, you don’t need to do anything.

If you decide to switch to another Medicare drug plan, you will need to contact the new plan, or enroll at

The amount you pay for a medication depends on factors such as the drug tier, if you use a preferred network pharmacy or a standard pharmacy, and the benefit stage you have reached.

Medicare Part D Prescription Drug Plan coverage has 3 benefit stages. Not all customers will reach every stage. Medicare sets drug cost limits in each stage and they may change year to year.

  • Deductible and Initial Coverage Stage–A deductible is the amount you need to pay out-of-pocket for your prescriptions before initial coverage begins. Not all plans have a deductible.

    During the deductible stage, your cost at our network pharmacies will reflect the Cigna special negotiated rates. You will typically get the best pricing from preferred network pharmacies.

After you meet your deductible (if your plan has 1), you enter initial coverage, in which you pay a reduced cost sharing for prescription drugs up to a specific limit. For 2020, this limit is $4,020 and is based upon your total drug costs including what the plan has paid and what you have paid.

  • Coverage Gap or “Donut Hole” Stage–After your yearly total drug costs (what the plan has paid and what you have paid) reach $4,020, you move into the coverage gap stage. Most Medicare drug plans have a coverage gap. Not everyone will enter the coverage gap. For 2020, you will pay 25% of brand-name drug costs and 25% of generic drug costs.
  • Catastrophic Coverage Stage–If your total out-of-pocket costs reach $6,350, you will then move into the catastrophic stage for the remainder of the calendar year. You'll pay the higher of 5% of covered drug costs, or $3.60 for generic (including brand drugs treated as generic) and $8.95 for all other drugs.

No. Medicare requires each spouse to pay separate premiums, deductibles, copays, and coinsurance for prescription drug coverage. Each spouse will reach each level of coverage according to their own drug costs over each calendar year.

Most people will pay the standard monthly Medicare Part D Prescription Drug Plan premium. However, you may have to pay an extra amount because of your annual income. For 2020, single or married individuals filing separately whose income is $85,000 or above, and couples with an income of $170,000 will pay the extra amount.

If you are impacted, the Social Security Administration (not your Medicare Part D plan) will send you a letter telling you what the amount will be and how to pay it. This extra amount must be paid separately and cannot be paid with your monthly Part D premium.