How Part D Works

Medicare Part D coverage helps pay for your prescription drugs

Medicare Part D helps pay for the prescription drugs you use. This coverage is not automatic — you decide whether or not to enroll in a private Medicare Part D plan. You can buy a separate policy just for drugs, called a Prescription Drug Plan (PDP), or you can get your Medicare Part D coverage through a Medicare Advantage plan (most include health and prescription benefits). Understanding how the Medicare Part D benefits work will help you pick the right plan for you.

If you have trouble paying for your medication or feel the cost is too high for certain drugs, you can shop for lower cost alternatives through our new Rx Savings Solutions tool. Learn More >


The 4 phases of coverage work like this in 2024:


Phase 1: Yearly Deductible Phase

You begin this payment phase when you fill your first prescription of the year. You pay the total cost of your drugs until you've met your plan's annual deductible, if applicable.

Phase 2: Initial Coverage

Once you've met your annual deductible, you move into the INITIAL COVERAGE phase. During this phase, you share costs with the plan – through copays or coinsurance. You remain in this payment phase until the shared total (what you AND Blue Cross pay) reaches a combined total of $5,030.

Phase 3: Coverage Gap (or “Donut Hole”)

Once you (and Blue Cross) together have reached a combined total drug cost spend of $5,030, you enter the COVERAGE GAP. During this payment phase in 2024, you'll pay 25% of generic drug costs and 25% of brand name drugs. You will continue to pay $35 for insulin. You remain in the “Donut Hole” until your personal total out-of-pocket costs reach $8,000.

Phase 4: Catastrophic Coverage

Once your total out-of-pocket costs reach $8,000, you move into the CATASTROPHIC coverage phase. If you reach this phase, there is no cost sharing and Blue Cross pays all drug costs.


How Part D Works- Did you Know?

Did You Know?

The best time to enroll in a Medicare Prescription Drug Plan (PDP) like BlueRx is when you are first eligible for Medicare. If you delay your enrollment in Part D beyond your Initial Enrollment Period — and you don’t have “creditable coverage” as good as the Medicare standard benefit design — you may pay a penalty for late enrollment if you decide you want this coverage later.

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