No, Medicare doesn’t automatically cover prescription drugs you get at a pharmacy, but you can buy a Medicare Part D plan from a private insurer to help cover those expenses. You can either get a stand-alone Part D plan or purchase a Medicare Advantage plan that provides medical and drug coverage in its benefits package.

Medicare introduced these prescription drug coverage benefits in 2006. In 2021, 77 percent of all Medicare beneficiaries — 48 million people — were enrolled in Part D plans. Half had stand-alone Part D plans, and half were in Medicare Advantage drug plans, according to the Kaiser Family Foundation.

Specific coverage varies by plan, and you usually have many to choose from, depending on your location. In 2022 the average Medicare beneficiary had a choice of 23 stand-alone Part D plans and 31 Medicare Advantage plans. Find out about the plans available in your area by typing your zip code into Medicare’s Plan Finder.

Other parts of Medicare generally cover drugs that medical professionals provide at a doctor’s office, hospital or specialty clinic. For example, Medicare Part B covers chemotherapy, dialysis and other medications injected or given intravenously at a doctor’s office or outpatient center.

What drugs must Part D cover?

Each Medicare Part D plan has a formulary, a list of covered medications, that includes both generic and brand-name prescriptions. You generally will have higher out-of-pocket costs for brand-name drugs.

Formularies vary from plan to plan, but federal law requires that all Medicare Part D plans include at least two drugs in the most commonly prescribed categories and all medications in the following categories:

  • Anticancer drugs except where covered by Part B
  • Anticonvulsive treatments for seizure disorders
  • Antidepressants
  • Antipsychotic medications
  • HIV/AIDs drugs
  • Immunosuppressant drugs

Part D plans must include coverage for most commercially available vaccines, including inoculations to prevent shingles. Part B, though, covers flu, hepatitis B and pneumonia vaccinations. The government also will pay for your COVID-19 vaccinations if you are covered under any of the four parts of Medicare.

Part D does not cover over-the-counter drugs

Medicare Part D does not pay for nonprescription drugs like antacids and cold medicines that you find at a pharmacy. Nor does it cover drugs for erectile dysfunction, hair loss or weight control, even if a doctor prescribes them.

You can use money from a health savings account tax free to pay for over-the-counter medications. You can’t contribute to an HSA after you enroll in Medicare, but you can withdraw money for eligible expenses at any time without paying taxes.

How much do Medicare Part D plans cost?

Medicare drug coverage carries premiums beyond what you pay for original Medicare. Part D premiums vary by plan. In 2022 the average base premium was $33 a month, according to the Centers for Medicare & Medicaid Services.

The base rate is the amount that most people pay for their Part D plan. But if you earn more than a certain amount, you are subject to a rate adjustment that Medicare sets annually.

In 2022 this adjustment starts at $12.40 a month above your regular Part D premium if your modified adjusted gross income for your last tax return on file (generally 2020 income for 2022 premiums) was more than $91,000 as a single filer or $182,000 as a married couple filing jointly. The surcharge adds $12.40 to $77.90 a month to your premiums, based on your income.

You pay the base premiums for Part D to the insurance company, but you pay the high-income surcharge to Medicare. If your income has dropped since your last tax return on file because of certain life-changing events — such as retirement or death of a spouse, divorce, job loss or marriage — you can apply to have this income-related monthly adjustment amount (IRMAA) reduced.

You may also have to pay a deductible and copayments for your medications, which vary by plan. You can use the Medicare Plan Finder to learn more about each plan’s drug coverage and out-of-pocket costs for your medications. You can switch plans every year during open enrollment, which runs Oct. 15 to Dec. 7 for coverage starting Jan. 1.

Keep in mind

• Medicare beneficiaries with low incomes and few assets may qualify for the federal Extra Help program, which helps pay for Part D premiums, deductibles and copayments. You can also contact your State Health Insurance Assistance Program (SHIP) to find out about additional financial assistance.

• If you don’t have other drug coverage considered to be at least as good as Part D (what the government calls creditable coverage), you may have to pay a late-enrollment penalty when you sign up. The penalty is 1 percent of the national average Part D premium — in 2022 that’s $33.37 — multiplied by the number of months you went without creditable coverage. It doesn’t sound like much, but it can add up quickly if you’ve gone years without Part D. And you must pay the monthly penalty for as long as you have Part D coverage.