The best Medicare Part D plans have been created to help you manage the cost of any prescription drugs you need, and they play a part in ensuring medicines remain affordable to all who need them. So in addition to lowering the overall cost of prescription drugs you need today, Medicare Part D plans help protect against future price hikes. The federal government actively encourages those who are eligible to take out Medicare prescription drugs coverage, and roughly 70% of Americans signed up to Medicare then supplement with a Part D plan.
When it comes to the best Medicare Part D plan providers, we’re looking at AARP, Humana Medicare Rx, WellCare, Cigna-HealthSpring, and other top providers. If you’re eligible for a Medicare prescription drug plan, your current health, medicine needs and budget are three of the main considerations. It’s the same when choosing from among the best health insurance companies and policies. The cost of a Medicare Part D plan is affected by things such as (but not exclusive to) the prescription drugs you use, how much they cost, which company manufacturers them, and where you buy them from.
Medicare Part D coverage is split into four categories:
Tier 1: Generic prescription drugs; Tier 2: Preferred, brand-name prescription drugs; Tier 3: Non-preferred, brand-name prescription drugs; Speciality Tier (Tier 4): High-cost prescription drugs. As a general rule of thumb, the higher the tier, the more you can expect the copayments on your prescription drugs to be.
If you’re unsure where to start, our guide to the best Medicare Part D plans and providers should help as it explores the benefits and drawbacks of the top-rated companies. Unclear on whether a Medicare prescription drugs plan is relevant to you? Read our sections below on 'Should I get a Medicare Part D plan' and 'Who is Eligible for Medicare Part D'. For further health coverage, take a look at our guides to the best vision insurance and the best dental insurance.
How we chose the best Medicare Part D plans
While each of the best Medicare Part D plans are different, they all share the same cost considerations, making them easier to compare and evaluate. Let's take a look at those now...
Similar to other commercial health insurance plans, Medicare Part D Prescription Drug Plans vary with the monthly premiums, depending on the company and the coverage and the prescriptions you need covered.
State Health Insurance Assistance Programs provide free Medicare advice. The staff use the same Medicare Plan Finder you would, but they've had extensive training to help you find the best Medicare Part D plan more easily. “We ask consumers questions to help them decide,” says Ray Walker, Divisional Director for the Medicare Assistance Program at Oklahoma's Insurance Department. “For example, what is most important to you: A short drive to the pharmacy? The copay structure for a particular medicine? Low premiums?” Answering these types of questions clarifies your choices.
- State Health Insurance Assistance Programs
We've seen monthly premiums as low as $12 and we've seen some as high as $100 per month. It all depends on how comprehensive you want or need your plan to be.
To help you know what your premium will be, you should collect your medications and list the names, brands and dosage. Most insurance providers will ask you to provide this information when getting a quote for a plan.
Some Medicare Part D Prescription Drug Plans offer a low monthly premium with a high deductible, while others do not have a deductible but charge a higher premium. When choosing a Medicare Part D Plan, pay close attention to the benefit of paying a higher monthly premium.
In many cases, the difference in savings is not as much as the difference in premium. The coverage of a higher premium plan often provides more comprehensive coverage.
Depending on your budget, current medications, and location, you can search among a vast list of plans offered by several commercial insurance companies. Most companies offering Medicare Part D Prescription Drug Plans cover medications based on a tier program, and not all medications may be covered.
It's important to compile an accurate and complete list of your current medications before enrolling in a Medicare Part D Prescription Drug Plan to find out if they are included under the plan.
The Best Medicare Part D plans to consider now
1. Cigna: Best Medicare Part D Plan overall
Cigna-HealthSpring is a well-priced and reliable option, making it our top pick in this best Medicare Part D plans. It has a decent selection of options that span a range of requirements for coverage, a large preferred pharmacy network and reasonable premiums.
The Healthy Rewards Program offers a selection of discounts, including at some 9,000 fitness centers nationwide, vision, hearing and nutrition programs plus there are discounts for acupuncture, massage and chiropractic services.
Plans don't offer a $0 co-pay after deductible, like a lot of the competition does for Tier 1 drugs. But the advantage here is a whopping 63,000 preferred network pharmacies nationally. Also the access to over 3,000 medications including most of the common medications for people on Medicare, make this very appealing.
Excellent premiums, deductibles and co-pay options mean there is something for everyone.
2. AARP Medicare Rx: Best Medicare Part D plan for seniors
AARP Medicare Rx, with services provided by United Healthcare, is an excellent all-round provider of Medicare Part D plans and is the only range of plans backed by AARP.
This is the best Medicare Part D plan option for seniors as it mixes low co-pays with competitive premiums and has a network of preferred providers. These include Walgreens and Duane Reed, making this widely accessible. The plan is available nationwide and the quote process is very straightforward.
Plans range from the AARP Medicare Rx Saver Plus at $31.30 per month, the AARP Medicare Rx Walgreens at $39.40 and the AARP Medicare Rx Preferred plan as the most comprehensive for $81.80.
- Read our AARP MedicareRx review
3. Humana Medicare Rx: Best Medicare Part D Plan for home delivery
Humana Medicare Rx offers a good range of Medicare Part D plans with options for most types of customer. There are particularly good savings to be had for those who can take advantage of the partnership with Walmart, and for those that are happy to sign up for the mail delivery service.
The three MyHumana plans are clearly described, and potential customers should find it easy to disseminate the information and get a quote on their website.
When it comes to Humana Medicare, prices range from co-pays as low as $0 after deductible for Tier 1. There are over 5,200 Walmarts that stock, plus you have access to Walmart Neighbourhood and Sam's Club pharmacies. More than 1,500 generics are included on the top tier plan’s list of covered drugs.
- Read our Humana Medicare Rx review
4. SilverScript: Best Medicare Part D plan for 24/7 advice
SilverScript is a Medicare Part D plan specialist, and this, together with being part of the CVS family of companies, puts it in good stead to assist potential customers with their initial enquiries.
Although the company only offers two plans (so not as many as some other competitors), the plans are different enough to appeal to most customers, and is why we have featured it in our best Medicare Part D plans guide.
SilverScript should appeal to those with basic, low-level medical requirements, through to those who take regular multiple medications. The 24/7 customer service and a range of online tools to help with medication organization is also a good benefit to customers.
- Read our SilverScript Medicare Rx review
5. WellCare Health Plans Medicare: Good choice of plans
WellCare Health is a government-sponsored healthcare plan specialist, and so is a great resource for weighing up which Medicare Part D plan might be suitable for any potential customer.
Since these types of plan are definitely the focus, the customer service agents are equipped to give detailed and specialist knowledge, putting the company in a relatively good position compared to many of the peers in the marketplace.
WellCare has an excellent spectrum of available plans, ranging from very affordable entry-level, basic plans to good value, comprehensive plans for customers with extensive medication needs. Pricing is also nicely varied meaning there should be something for everyone.
Who is eligible for Medicare Part D?
If you’re wondering whether you are eligible for a Medicare prescription drug plan, this is the criteria you need to meet:
- Be aged 65 years or over
- Have Original Medicare
- Aged younger but have a qualifying disability or condition
- Have end-stage renal disease that requires dialysis or a kidney transplant
If you signed up for Social Security before turning 65, you would have been enrolled in Medicare automatically, though benefits will begin once you turn 65. There can be penalties for not enrolling at age 65, so signing up on time will help you avoid this.
If you have employer sponsored coverage, you might be able to delay Medicare while your EIS is still active. That said, the size of your employer/company will determine whether or not you’ll pay a penalty for not enrolling by age 65. We suggest looking into this in advance of your 65th birthday to avoid paying a possible penalty.
Should you get a Medicare Part D plan?
Medicare drug coverage helps you pay for any prescription medicine you need. The Official Medicare advice is that even if you don’t take prescription drugs now, you should still consider taking out Medicare Part D coverage. That’s because if you don’t get it when you’re first eligible, and you don’t have prescription drug coverage through your employer or a union or trade group, or you quality for Extra Help (see below), you will likely have to pay a late enrollment penalty if you join a Medicare Part D plan at a later date.
So, these are the circumstances under which you should consider Medicare Part D:
- You have no other prescription drug coverage in place.
- Medicare Part D (and original Medicare) are cheaper than your existing plan.
- You are eligible for the Extra Help program (helps low-income Americans pay Part D medicine costs).
- You have Medigap (Medicare Supplement Insurance).
When is Medicare Part D enrollment?
There are three different enrollment periods for Medicare Part D, as follows:
Initial enrollment period: This covers a total of seven months - three months before you turn 65, your birthday month itself, and then the three months directly after your 65th birthday. So seven months in total.
Annual Medicare Open Enrollment: October 15 through December 7
Medicare Special Enrollment: Under select circumstances, you can enroll in a Medicare Part D plan at any time.
5 common Medicare Part D expenses to know
While prescription drugs costs under the majority of Medicare Part D plans are low, the amount you’ll pay will vary by the Part D provider. These are the most common expenses you’ll need to familiarize yourself with...
Premiums: This is the amount you pay each month to ensure your plan is active.
Annual deductible: The amount you pay before coverage begins. This amount is capped at $435 annually, but some Medicare Part D plans offer zero deductibles.
Copayments: This is the set amount you’ll pay each time you file a prescription.
Coinsurance: The percentage cost you have to cover.
Coverage gap costs: This applies once your Medicare Part D plan covers $4,020 in drugs. Of course, that also means you’ll have to cover higher out of pocket costs.
What are the four stages of a Medicare Part D plan?
Medicare Part D plans all follow federal guidelines. Each insurance carrier must submit its plan outline to the Centers for Medicare and Medicaid Services annually for approval.
These are the four stages of a Medicare Part D plan…
When it begins: With your first prescription of the plan year.
In 2020, the allowable Medicare Part D deductible is $435. Depending on the provider you choose, plans may either charge the full deductible, a partial, or waive the deductible (zero deductible). You pay the network discounted price for prescription drugs until your plan equals the deductible. Then you enter initial coverage…
When it begins: Immediately if the Part D plan you have has no deductible. Otherwise, it’ll begin when the prescription payments you made equals the deductible.
During Initial Coverage, you’ll pay a copay for prescription drugs relative to the Tier they are covered by.
When it begins: When you and your Medicare Part D plan have collectively spent $4,130 on your covered prescription drugs.
Once in this stage of the plan, you will pay 25% of the retail cost of your prescription drugs. Gap spending will continue until your total out of pocket costs have reached $6,350 (2020’s figure).
When it begins: When your out of pockets costs reach $6,550 on covered prescription drugs.
At the end of the coverage gap, your plan will pay 95% of the costs of your prescription drugs for the rest of the year. This is good if you rely on expensive medication.
Medicare Part D plans FAQ
How much do the best Medicare Part D Plans cost?
According to MyMedicareMatters.org, the national average monthly premium for a Part D plan is $33.19. However, the cost varies depending on the plan you choose and the area where you live. In addition, to really determine the best plan for you, you need to consider the cost of the drugs you take plus the deductible and premium.
You shouldn’t necessarily choose a plan based on the lowest available premium without first determining how the plan affects your annual drug costs, as it’s important to remember that Part D plans usually don’t begin to cover prescription drug costs until you’ve paid the out-of-pocket deductible. So, if a low premium plan has a high deductible, it can potentially cost you more per year than a higher premium.
To find the most affordable plan, you need to start by making a list of the prescriptions you take and the monthly cost without insurance. Then calculate the annual cost of the drugs.
This might require consulting with your pharmacy or past receipts. Once you know how much your drugs cost, you can choose a plan with a deductible and a monthly premium that costs you the least.
It’s also critical to consider the co-pay tier categorizations of the drugs you take. Medicare Part D plans will always emphasize or encourage you to take the tier 1 generic drugs, and most cover these at a much lower co-pay. But if you have some drugs that are only available on the tier 4 speciality designation, you could end up with a higher co-pay.
Is Medicare free?
There are four different parts to Medicare, so you will come across different cost structures. Most people won’t have to pay for Medicare Part A (hospitalization), though your eligibility for premium-free Part A all depends on your employment history based and the Medicare taxes you paid during this time.
Many Americans pay for Medicare Part B, as this covers doctor visits and similar outpatient medical services. Deductibles apply to services covered under Part A and B.
Medicare Part C (Medicare Advantage Plans) and Medicare Part D are optional and have their own premiums. If you live in a low income household, you may qualify for a subsidy to reduce the overall cost of Medicare.
Should you use licensed insurance agents to find the best Medicare Part D plans?
Brokers have a lot of training and expertise under their belt, and a good one will be able to spend quality time looking at your individual needs at no cost to you. Be aware, though, aware that most agents work on commission and are in business to sell plans for the companies that will be paying them.
One way to make sure you’re dealing with someone who has your best interests in mind is to go to an agent who represents a number of insurance companies.
“Ask them: ‘Do you sell all the plans that are available, or do you only represent certain companies?’” Walker advises.
Are flat-fee Medicare consultants worth it?
“It makes sense to me,” is how Diane Omdahl describes her Medicare expertise and resultant understanding of the enrollment process. Omdahl, cofounder and president of 65 Incorporated, is a registered nurse and directed a skilled nursing facility before getting into the Medicare advice business. Services such as 65 Incorporated, Allsup Medicare Advisor, Health Care Navigation and others you can find in your area charge a fee for one-on-one consulting.
It’s not cheap; 65 Incorporated charges $399 to walk you through your initial enrollment. The advantage is that because these consultants do not work on commission, they have no ulterior motive to steer you to a particular company or a more expensive product.
Considering how much you might have to pay out of pocket for an uncovered medication if you choose the wrong plan, it may be worth your time – and possibly some of your money – to get a helping hand with the process.
The best Medicare Part D plans resources to consult
Although SHIP counselors are not allowed to recommend one specific Medicare Part D plan, by asking these questions and evaluating which plans’ formularies best suit a person’s needs, they’re able to narrow down the choices significantly.
Walker estimates that consumers who follow his staff’s advice save an average of $2,100 a year. And since the services are free, you can call your state’s SHIP any time throughout the year, especially during every open enrollment period, when you need to decide whether to keep your current plan or switch to a new one.
“We always recommend SHIPs as a resource for people who want more-personalized help with sorting through their Medicare plan options,” Purvis says.
You can find your state’s SHIP website in this drop-down menu.
There are few things more important than your health. That's why MedicarePlan.com is designed to find the best Medicare Part D insurance plans designed for you and your family. Start your search today.
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