Established under the Medicare Modernization Act of 2003, the Medicare prescription drug benefit — also known as Medicare Part D — is voluntary insurance that Medicare beneficiaries can purchase to help cover the costs of their prescription drugs.  In 2020, about 70 percent (45 million) of Medicare beneficiaries are enrolled in a Part D plan.

Only private insurance companies can offer Medicare Part D plans.  Medicare Part D plans are available as a stand-alone prescription drug plan (PDP) or through a private insurance Medicare Advantage plan, such as a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO), which provides all of your Medicare benefits, including prescription drug coverage.