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Over 66% of U.S. adults use at least one prescription drug, according to data gathered by the Health Policy Institute at Georgetown University—and those expenses can add up over time. People between the ages of 65 and 79 spend an average of $811 a year out of pocket on prescription drugs while adults at least 80 years old spend an average of $796 each year [1] Prescription Drugs. Georgetown University Health Policy Institute. Accessed 8/17/2023. .
Medicare Part D can help alleviate these expenses. This prescription drug benefit is available for all beneficiaries enrolled in Medicare and can help keep costs manageable as one ages.
To determine the best Medicare Part D providers, the Forbes Health editorial team evaluated U.S. insurance companies that offer plans nationwide by how many states in which they provide coverage, the average monthly drug premium and annual deductible across all plans they offer, the Centers for Medicare and Medicaid Services (CMS) rankings of their plans and more. Read on to see which providers made the list.
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The Forbes Health editorial team prioritizes the accuracy and integrity of the data collected. Our ranking is based on quantitative data and is free from conflicts of interest. We carefully fact check the information featured in our ranking and are committed to producing rankings and supplemental content about Medicare Part D providers that readers can trust. You can read more about our editorial guidelines and our methodology for the rankings below.
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UnitedHealthcare is the nation’s largest health insurance provider, covering over 43 million people in all 50 states and most U.S. territories. The provider offers three Part D plans, with specific availability dependent on one’s geographic location, and its plans earn an average rating of 3.2 out of 5 stars from CMS. UnitedHealthcare also offers prescription drug coverage with its Medicare Advantage plans.
The insurance provider offers $0 premiums with full low-income subsidies to eligible beneficiaries, as well as additional drug coverage when a beneficiary reaches the coverage gap. UnitedHealthcare is one of the larger providers to offer insulin copays of $35 or less, which can be a significant benefit for people managing diabetes.
Pros & ConsCigna has remained a global presence in the world of insurance for over 200 years. It’s known for its competitive rates, dependable service and additional no-cost programs it provides to its customers. The company offers three Part D plans, with specific availability dependent on one’s geographic location, and its plans earn an average rating of 3 out of 5 stars from CMS. Cigna also offers prescription drug coverage as part of its Medicare Advantage plans.
The provider offers $0 premiums with full low-income subsidies to eligible beneficiaries, and it offers additional drug coverage when a beneficiary reaches the coverage gap. What’s more, Cigna typically provides additional discounts for those who apply for coverage online.
Pros & ConsAnother large nationwide health insurance provider, Humana covered 17% of all Medicare Part D beneficiaries in 2022, according to KFF [2] Key Facts About Medicare Part D Enrollment and Costs in 2022. KFF. Accessed 9/1/2023. . It offers three Part D plans, with specific availability dependent on one’s geographic location, and its plans earn an average rating of 3 out of 5 stars from CMS. Humana also offers prescription drug coverage as part of its Medicare Advantage plans.
The insurance provider offers $0 premiums with full low-income subsidies to eligible beneficiaries, and it offers additional drug coverage when a beneficiary reaches the coverage gap. Humana is one of the larger providers to offer insulin copays of $25 or less, which can be a significant benefit for people managing diabetes.
Pros & ConsAetna, a CVS Health company, is one of the largest providers of Part D plans, which it sells under the brand name SilverScript. It offers three Part D plans, with specific availability dependent on one’s geographic location, and its plans earn an average rating of 3.5 out of 5 stars from CMS. Aetna also offers prescription drug coverage as part of its Medicare Advantage plans.
While Aetna doesn’t offer $0 premiums with full low-income subsidies to eligible beneficiaries, it does offer additional drug coverage when a beneficiary reaches the coverage gap. Aetna is also one of the larger providers to offer insulin copays of $35 or less, which can be a significant benefit for people managing diabetes.
Pros & Cons
Blue Cross Blue Shield is a collection of 34 independent and locally operated health insurance companies, so its coverage options tend to vary by state more than others on our list. However, it offers three Part D plans, with specific availability dependent on one’s geographic location, and its plans earn an average rating of 3.3 out of 5 stars from CMS. Blue Cross Blue Shield also offers prescription drug coverage as part of some of its Medicare Advantage plans.
The insurance provider only offers $0 premiums with full low-income subsidies to eligible beneficiaries to customers of its Oklahoma company, though it does offer additional drug coverage when a beneficiary reaches the coverage gap. What’s more, depending on the particular Blue Cross Blue Shield company, beneficiaries with diabetes can access generous insulin coverage. For instance, CareFirst BlueCross BlueShield began offering insulin to its beneficiaries for $0 out of pocket prior to meeting their deductible in 2021.
Pros & ConsTo determine the best Medicare Part D providers, the Forbes Health editorial team evaluated all insurance companies that offer plans nationwide in terms of:
Analysis focused exclusively on providing general summaries of the companies and their reputations. In order to provide specific plan recommendations accurately, it’s important to consider the ZIP code and demographic details of the individual seeking insurance coverage. To do so, we recommend using Medicare.gov’s plan finder tool or seeking the expertise of a licensed, independent, agnostic insurance agent.
Medicare Part D is an optional prescription drug benefit available to every U.S. resident enrolled in Medicare. These plans allow for additional coverage alongside Original Medicare (Medicare Part A and Part B), Original Medicare paired with a Medicare Supplement plan or a Medicare Advantage plan that doesn’t include drug coverage.
Offered by a host of private insurance providers, Part D plans make it easier to afford prescription drugs. Each Part D plan features a unique drug formulary, a list of drugs it covers and to what extent that coverage manages costs for the beneficiary. Monthly premiums for Part D plans vary based on the insurance provider and the geographic location in which the plan is offered.
Each Medicare Part D plan follows the stages listed below, per the federal government.
Stage 1: Deductible
A beneficiary must first pay the full cost of their medications until they meet their plan’s deductible. Some plans offer coverage for certain medications during this stage.
Stage 2: Initial Coverage
Once the deductible is reached, the plan’s initial coverage stage kicks in. Copayment and coinsurance rates vary per plan, but the plan covers remaining expenses.
Stage 3: Coverage Gap
If the total amount a beneficiary and their plan pay for prescription drugs reaches $5,030 in 2024, they enter the coverage gap. Also known as the “donut hole,” the coverage gap occurs when there’s a temporary limit on what the plan covers for drugs, requiring the beneficiary to pay up to 25% of the retail cost of any brand-name medications covered in their plan.
Stage 4: Catastrophic
If a beneficiary spends $8,000 out of pocket in 2024, they leave the coverage gap and access what’s called “catastrophic coverage.” For the remainder of the year, they’re only responsible for paying a small coinsurance percentage or copayment for their drugs.
While all Medicare Part D plans are provided by private insurance companies, the plans themselves vary significantly in terms of their costs and the drugs they cover. Each Part D plan features its own drug formulary, costs of drugs for which the beneficiary is ultimately responsible, monthly premium and annual deductible. For this reason, it’s important for anyone interested in Medicare Part D coverage to review each of their plan options very carefully to make sure they pick one that offers the drugs they need (or are likely to need in the future) at rates that work for their budget.
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Find The Right Medicare Plan For You
The Department of Health and Human Services requires that all Medicare Part D plans cover six protected classes of drugs, which include:
For beneficiaries with diabetes, Medicare Part D covers insulin that isn’t administered with an insulin pump, as well as anti-diabetic drugs and certain diabetes supplies. Beneficiaries who participate in the Part D Senior Savings Model can access multiple types of insulin for a maximum copayment of $35 for a month’s supply. However, the $35 maximum doesn’t apply if a beneficiary reaches the catastrophic stage of their drug coverage.
Generally, every Medicare Part D plan comes with a drug formulary, a list of specific medications (and doses of those medications) that are covered. Insurance providers maintain the right to add or remove approved medications and change these formularies annually.
“The most significant changes for formularies—as well as premiums and copays—are seen each new calendar year,” says Amanda Reese, Medicare department manager at Hafetz and Associates in Linwood, New Jersey. “That’s why it’s imperative that you review your Part D plan yearly, especially if your medications have changed.”
If there’s a medication one needs that isn’t listed on their Part D plan’s formulary, they can file for a formulary exception. To do so, their health care provider must call their insurance provider and explain the beneficiary’s need for that specific medication. Upon approval, the plan may cover the medication until the evaluation for the following calendar year begins.
Any Medicare beneficiary enrolled in Original Medicare or a Medicare Advantage plan is eligible for Medicare Part D drug coverage. Once an individual is enrolled in one of these coverage options, they can review and select a Part D plan available in their ZIP code that meets their health and budget needs by using Medicare.gov’s plan finder tool, calling the plan provider directly or working with a Medicare insurance broker.
Consider the benefits and drawbacks of Medicare Part D plans below.
Pros:
Cons:
“Part D plans have a wide range of costs, including a [monthly] premium,” says Christopher Duncan, a retirement income certified professional at Trusted Benefits Direct in Las Vegas. “The premiums for various Part D plans run from a little less than $10 a month to upwards of $150 a month,” he adds.
Based on data provided by CMS, Clear Spring Health offers the lowest average monthly premium price of $24.20 across its Part D plans. Meanwhile, Highmark Inc. Part D plans tend to have the most expensive monthly premiums, with an average of $156.85 across its plans.
In terms of annual deductibles, Avalon Insurance Company offers the lowest average price of $157.50 per year across its plans while Mutual of Omaha and Clear Spring Health rank as the most expensive, with an average price of $505 across their plans [3] Prescription Drug Coverage - General Information. Centers for Medicaid and Medicare Services. Accessed 8/17/2023. .
Monthly premiums and annual deductibles aside, spending largely depends on the specifics of a plan’s drug formulary and what drugs the beneficiary needs. It’s crucial to review drug formularies thoroughly before purchasing a Part D plan to ensure that the plan selected provides the necessary coverage to minimize spending as much as possible.
“Securing the lowest premium doesn’t mean you’re getting the best deal,” says Duncan. “You may choose a $10-a-month plan only to learn your prescription will cost $100 to fill at the pharmacy when you could have purchased a $40-a-month plan and received the prescription for only a $10 copay.”
To save money on a Medicare Part D plan, it’s important to consider its annual deductible, monthly premium and drug formulary and how each balances in providing useful coverage for an individual.
For instance, a Part D plan with a very affordable annual deductible and monthly premium but a drug formulary that doesn’t cover the drugs the person needs could end up costing a significant amount out of pocket. While a $0 monthly premium might look attractive on the surface, it could mean other compromises in coverage and therefore additional costs down the line.
Conversely, even if a drug formulary perfectly fits the needs of an individual, an expensive monthly premium and/or high annual deductible could mean upfront costs put too much of a strain on one’s budget.
The best way to save money on a Part D plan is to research and select a plan that covers the drugs one needs with a monthly premium that fits into their budget and an affordable annual deductible.
At some point, Medicare Part D beneficiaries may face a coverage gap called the “donut hole,” which is a temporary limit on what their Part D plan pays for their drugs for a specified period of time.
In 2024 the coverage gap begins when the total amount a beneficiary and their plan pay for prescription drugs reaches $5,030. Unfortunately, once one lands in the Medicare donut hole, the primary way out is through. The beneficiary is responsible for paying up to 25% of the retail cost of their medications either until the year ends and their coverage resets or they accumulate a total out-of-pocket spending of $8,000.
The best way a beneficiary can avoid the Medicare donut hole is to enroll in the best plan for their unique needs at the very best price, which is why it’s so important to consider a drug plan’s details—including its monthly premium, annual deductible and specific drug formulary—prior to enrollment.
There are several ways to enroll in a Medicare Part D plan, including visiting Medicare.gov to enroll directly on the website. An individual can also call the private insurance company they choose to work with or enroll using the company’s website. Medicare agents can also handle the enrollment process for clients.
Once a person selects their plan and picks one of the enrollment paths above, benefits of that plan typically take effect on the first day of the month following their enrollment.
Anyone looking for Medicare prescription drug coverage should visit Medicare.gov and use its plan finder tool to review all available Medicare Part D plans. Once a customer enters their ZIP code, they can review the list of plans offered in their area by a range of providers, including each plan’s monthly premium, annual deductible and specific drug formulary details.
With that said, this list of options can often feel overwhelming. Many Medicare beneficiaries prefer to work with an expert who can help them more easily digest how each plan works to determine which one best suits their needs based on the medications they take now, their risk of developing future conditions, their preferred pharmacy, their budget and more.
Anyone already enrolled in a Medicare Part D plan who’s considering switching plans can do so during Medicare’s annual open enrollment period, which runs from October 15 to December 7.
Individuals enrolled in a Medicare Advantage plan specifically can make changes to their Part D enrollment during the annual Medicare Advantage open enrollment period, which runs from January 1 to March 31. However, they must switch Medicare Advantage plans or drop Medicare Advantage coverage to return to Original Medicare in order to change their Part D plan selection during this time.
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