Medicare (Part D)
An Overview of the Medicare Part D Prescription Drug Benefit
Medicare Part D is a voluntary outpatient prescription drug benefit for people with Medicare, provided through private plans approved by the federal government. Beneficiaries can choose to enroll in either a stand-alone prescription drug plan (PDP) to supplement traditional Medicare or a Medicare Advantage prescription drug plan (MA-PD), mainly HMOs and PPOs, that cover all Medicare benefits including drugs. In 2020, 46 million of the more than 60 million people covered by Medicare are enrolled in Part D plans. This fact sheet provides an overview of the Medicare Part D program, plan availability, enrollment, and spending and financing, based on data from the Centers for Medicare & Medicaid Services (CMS), the Congressional Budget Office (CBO), and other sources.
Medicare Prescription Drug Plan Availability in 2021
In 2021, 996 PDPs will be offered across the 34 PDP regions nationwide (excluding the territories). This represents an increase of 48 PDPs from 2020 (a 5% increase) and an increase of 250 plans (a 34% increase) since 2017 (Figure 1).
Figure 1: A Total of 996 Medicare Part D Stand-Alone Prescription Drug Plans Will Be Offered in 2021, a 5% Increase From 2020 and a 33% Increase Since 2017
The relatively large increase in the number of PDPs in recent years is likely due to the elimination by CMS of the “meaningful difference” requirement for enhanced benefit PDPs offered by the same organization in the same region. Plans with enhanced benefits can offer a lower deductible, reduced cost sharing, or a higher initial coverage limit. Previously, PDP sponsors were required to demonstrate that their enhanced PDPs were meaningfully different in terms of enrollee out-of-pocket costs in order to ensure that plan offerings were more distinct. Between 2018 and 2021, the number of enhanced PDPs has increased by nearly 50%, from 421 to 618, largely due to this policy change.
Beneficiaries in each state will have a choice of multiple stand-alone PDPs in 2021, ranging from 25 PDPs in Alaska to 35 PDPs in Texas (see map). In addition, beneficiaries will be able to choose from among multiple MA-PDs offered at the local level for coverage of their Medicare benefits.
Medicare Part D Stand-Alone Prescription Drug Plan Availability in 2021, by State
How to get prescription drug coverage
Find out how to get Medicare drug coverage. Learn about Medicare drug plans (Part D), Medicare Advantage Plans, more. Get the right Medicare drug plan for you.
What Medicare Part D drug plans cover
Overview of what Medicare drug plans cover. Learn about formularies, tiers of coverage, name brand and generic drug coverage. Official Medicare site.
Costs for Medicare drug coverage
Learn about the types of costs you’ll pay in a Medicare drug plan.
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