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5 Best Companies for Medicare Part D Plans

Have you recently qualified for Medicare? You might assume that your coverage also includes any prescription drugs your doctor prescribes. However, this isn’t the case — Medicare Parts A and B only include coverage for drugs administered in a hospital or by a professional care provider. You’ll need a Medicare Part D plan to help you cover your expenses if you require drugs outside of a professional setting.

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We’ll take a look at what’s covered under Medicare Part D and who’s eligible to buy a plan. We’ll also introduce you to some of the best Medicare Part D plans available on the market today. 

Quick Look: Best Companies for Medicare Part D Plans

  1. Cigna
  2. Aetna
  3. Humana
  4. AARP Walgreens Rx Plan
  5. WellCare

Medicare Part D Plans Overview

Medicare Part D, sometimes called prescription drug coverage, is an add-on that you can purchase that offers coverage for self-administered prescription drugs. Medicare Part D is optional and not included with original Medicare. Medicare Part D can help you cover the costs of any prescription drugs you take outside of the hospital. Professionally-administered prescription drugs are almost always covered under Medicare Part A or B.

Do you have a Medicare Advantage plan? It might mean you already have prescription drug coverage. Most Advantage plans include benefits similar to those you get with Part D coverage as well as other protections. A Medicare supplemental insurance policy means you may purchase Part D coverage only if your Medigap policy does not offer drug benefits. Though Part D plans are optional, you are fully liable for the financial costs of your prescription drugs if you have Original Medicare and don’t buy a plan. Part D plans are affordable in most states, so most people who are on Medicare Parts A and B also choose to get Part D coverage as well. 

Part D plans work the same way as most non-Medicare health insurance plans. Each month, you pay your plan provider a monthly premium. In exchange, your plan provider pays for a percentage of your drug costs each month. There are 4 stages of payment you’ll go through when you sign up for a Part D plan:

  • Annual deductible: Your deductible is the amount of money you need to pay toward your prescriptions before your insurance kicks in and begins paying for your drugs. In 2019, a Medicare Part D provider cannot charge you more than $415 in an annual deductible.
  • Initial coverage: After you hit your deductible, your provider will begin to cover a percentage of your drug costs laid out in your plan agreement. Copays can vary by plan type, drug tier and provider. You will stay in this stage until you and your insurance company together spend $3,820 in total. $3,820 is the limit for 2019 — and this number may change in later years.
  • Coverage gap: Once you and your insurance provider spend up to the initial coverage limit, you reach the coverage gap stage. During this stage, you pay a higher percentage of your drug costs. Once you spend $5,100 out of pocket (2019’s coverage gap limit) you enter the catastrophic coverage stage.
  • Catastrophic coverage: Once you reach this stage, you begin paying a different copay for every generic and brand name drug you take. Copays during the catastrophic stage are much lower than the initial coverage stage. 

You can only get a Part D plan if you already have Original Medicare. To qualify for Medicare, you must:

  • Be 65 years old or older
  • Be a younger person with a qualifying disability
  • Have end-stage renal disease (permanent kidney failure requiring dialysis or transplant)

Not sure you qualify? Use Medicare.gov’s eligibility tool

Legalities Surrounding Medicare Part D Plans

Medicare Part D plans are legal in every state and are available for everyone with a Medicare plan. Unlike Medicare Part A and B, Medicare Part D plans aren’t administered by the federal government. Instead, they’re offered by private insurance providers who have Medicare approval. Not every Medicare Part D plan provider has authorization in every state. Take the time to research providers who service your area before you enroll.  

Medicare rules allow Part D plan providers to apply certain restrictions on drug usage. These restrictions are for both safety and cost containment. Some rules you might run into include:

  • Prior authorization: Part D plan providers only want to pay for drugs that are medically necessary. If you or your doctor receive a prior authorization request, it means that your pharmacy cannot dispense your prescription until your doctor confirms that the specific drug is necessary for your treatment. Prior authorization requests are common for highly potent and very expensive brand-name drugs.
  • Quarterly limits: Quarterly limits restrict how much medication you can get on each of your drug refills. Each individual drug has its own quarterly limit. If your doctor prescribes more than your drug’s quarterly limit, your doctor may need to write an explanation to the insurance company explaining why you need this much of your medication.
  • Step therapy: Step therapy involves trying generic versions of drugs first to test the ingredients’ effectiveness before moving onto brand-name drugs. Your doctor will have to file an exception request with your insurance provider if he or she believes that taking a generic version of a drug is dangerous or ineffective for your treatment schedule. 

Not every prescription is covered under every Part D plan. There are no rules that dictate which drugs the provider must choose, though each Part D plan provider must offer coverage for at least 2 drug options in every major disease category. Before you sign onto a plan, check the plan’s formulary and make sure your prescriptions are covered. 

Best Medicare Part D Insurance Providers

Now that you understand how Part D plans work, let’s take a look at some of the best Part D options on the market.  

1. Cigna: Best Overall

Understanding Medicare Part D can be confusing. Cigna’s plan finder doesn’t just help you connect with the plan that’s right for you — it also makes it easy to compare plan options available in your area. Visit Cigna’s website, enter your zip code and input the prescription drugs you’re currently taking.

Cigna will connect you with the most affordable plan it offers that includes the drugs you need. Monthly premiums as low as $20 and copays starting from $1 means that Cigna Part D plans are just as affordable as they are easy to sign onto. 

2. Aetna: Cheapest Medicare Part D Plan

If you’re on a limited income and you’re concerned about deductibles and copays, Aetna might be the right Plan D provider for you. Aetna offers 3 tiers of Part D plans, and plans are available with $0 deductibles so you start saving right away. Aetna’s most affordable plan, Aetna Medicare Rx Select, has an average monthly deductible of just $17. The Rx Select plan also features a $0 deductible for all Tier 1 and 2 drugs, which encompass most generic prescriptions. Nearly anyone can afford Part D coverage from Aetna, with its affordable plans and additional assistance for men and women who receive income supplement support. 

3. Humana: Best Coverage for Medicare Part D Plan

The availability of Part D plans can vary depending on where you live. If you’re concerned about getting a plan near you, consider Humana. Humana has a wide coverage network in most states, and you can even schedule 30-day prescription deliveries to your door. This is useful if you live in 2 different states throughout the year and you don’t want to worry about running over your quarterly limits while you’re out of your home state. Humana Part D plans are accepted at many national chains including Sam’s Club, Walmart and Walgreens. 

4. AARP Walgreens Rx Plan: Best for Comprehensive Drug Inclusions

The American Association of Retired Persons (AARP) has partnered with Walgreens to formulate an easy, low-cost and convenient plan for Part D holders. The AARP MedicareRx Walgreens Plan has a comprehensive list of included drugs and an easy-to-use search feature that allows you to quickly see whether your prescriptions are covered. The plan is available even if you aren’t an AARP member, and most plans include $0 deductibles. You’ll need to pick up your prescription from a Walgreens to take advantage of this offer but there are over 9,500 Walgreens stores in the U.S. — chances are, you’re close to one. 

5. WellCare: Best for Customer Service

Cigna, Aetna and Humana don’t only offer Part D plans — they also focus on other types of insurance. This can make it more difficult to connect with experts on Medicare plans. On the other hand, WellCare only offers Medicare plans. This means that its customer service team members are all well-versed in Medicare Part D and can be more effective in helping you find the right solution for you. WellCare also offers plans in most states and many choices also have $0 deductibles. Are you the type of person who values top-quality customer service above all else? Consider a WellCare plan. 

Make Healthcare Simple

The most important step in choosing a Part D plan? Comparison shopping! Take the time to shop for a plan that fits your particular needs. Remember to enter all of your prescription drugs to make sure your plan choices offer coverage. You don’t want to sign onto a plan that seems like a bargain — only to learn that your most important prescriptions aren’t covered. 

Frequently Asked Questions

1) Q: What are the different parts of Medicare?

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1) Q: What are the different parts of Medicare?
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Medicare has 4 parts named Parts A, B, C, and D. Part A provides hospitalization coverage while Part B provides outpatient coverage, like doctor visits. Parts A and B make up Medicare’s core coverages. Part C is provides private-market Medicare plans, called Medicare Advantage Plans. Part C coverage often includes additional benefits. Medicare Part D provides coverage for prescription drugs. Get a Medicare Insurance Quote through the top providers here.

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2) Q: Is Medicare free?

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2) Q: Is Medicare free?
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Because there are 4 parts to Medicare, there can be different cost structures. Most people won’t have to pay for Medicare Part A (hospitalization). Eligibility for premium-free Part A is based on your work history during which you paid Medicare taxes. Many people do pay a monthly premium for Medicare Part B, however, which covers outpatient medical services, like doctor visits. Deductibles also apply to services covered under Medicare Parts A and B, so you’ll pay a part of the annual cost.

Medicare Parts C and D are optional coverages and have premium costs of their own. Medicare Part C refers to Medicare Advantage Plans that offer additional coverage in exchange for a monthly premium. Part D, the prescription plan, reduces the cost of medications but also requires a monthly premium. Subsidies may be available for low income households to help reduce overall Medicare costs.

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3) Q: Do I need to sign up for Medicare?

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3) Q: Do I need to sign up for Medicare?
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If you signed up for Social Security before age 65, you were enrolled in Medicare automatically but benefits will begin at age 65. In most cases, there are penalties for not enrolling at age 65, so it pays to sign up on time. Click here to get a medicare quote in minutes from the best providers. 

If you have employer coverage, you may be able to delay Medicare coverage while your work plan is still in force. However, the size of the employer determines whether you’ll pay a penalty for not enrolling at age 65. Employees (and their spouses) of companies that offer group health insurance to 20 or more people are usually exempt from late sign-up penalties if they are covered by the employer’s plan.

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