How Much Does Medicare Part D Cost?

About Medicare Part D


Original Medicare Parts A and B don’t cover prescription drug costs, outside of medications prescribed to you during a hospital stay. Medicare Part D is standalone prescription drug coverage you can enroll in through a private insurer. Its costs and coverage vary based on your location and the plan you select. Many Medicare Advantage (Part C) plans also include Part D coverage and additional benefits with $0 or low monthly premiums. Here’s a breakdown of standalone Medicare Part D costs.

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Medicare Part D Premiums And Deductibles


Most Part D plans have deductibles, premiums and/or copays or coinsurance for which you are responsible. Each year, the government sets a maximum limit on annual deductibles.


That limit is a good benchmark for comparing plan deductibles. Keep in mind that a plan with a $0 deductible may mean you'll pay higher copays and/or monthly premiums.



Medicare Part D Copay And Coinsurance Options


Your copay is a set amount you pay for prescriptions when you pick them up at the pharmacy. Generic medications often cost less than brand-name prescription drugs, and you'll want that option in a Part D plan.


You'll find that more expensive medications usually have a coinsurance for you to pay. When you research your plan, see what your share of the cost will be for medications you need.



Drug Tiers And Medicare Part D Costs


Every drug on a drug list is in a cost-sharing tier. What you pay for your prescription depends, in part, on which tier your drug is in. Your prescription may fall under different drug tiers depending on its availability in generic or brand form, as well as the associated cost. Each drug tier has a set copay or coinsurance cost. Here's an example of how the tiers may work:


Tier 1

Preferred Generic. These are usually the lowest cost generic versions of brand-name drugs.

Tier 2

Generic. These are usually higher-cost generic drugs.

Tier 3

Preferred Brand. These are typically lower-cost, preferred brand-name drugs and some high-cost generic drugs.

Tier 4

Non-Preferred Drug. These are typically higher-cost, non-preferred generic and brand-name drugs.

Tier 5

Specialty Tier. Includes specialty drugs often used to treat serious illnesses. Drugs in this tier generally cost more than other drug tiers but may include both generic and brand-name drugs.

Tier 6

Select Care Tier. This drug tier usually includes select care drugs to treat specific medical conditions common among seniors, like diabetes, high blood pressure, high cholesterol and osteoporosis. This tier often has a $0 or very low copay.


Check to make sure the plan covers the medications you need most. Then you can do a Medicare Part D cost comparison.

What Is A Medicare Part D Coverage Gap (Donut Hole)?


Most drug plans currently have a coverage gap, also called a “donut hole.” It sets a temporary limit on what your plan will pay for medications. Check to see if your medications will still be covered during the coverage gap or if your Part D plan has added benefits in the gap. The Medicare Part D 2024 limit is $5,030. While in the coverage gap, you are responsible for a percentage of the cost of your drugs.



Avoiding The Medicare Part D Penalty


If you don’t sign up for a Part D plan when you’re first eligible, or you’ve gone 63 days or more without creditable drug coverage after your IEP, you’ll pay a monthly late enrollment Medicare Part D penalty while you have Part D coverage. While the fee is typically only a few dollars each month, it can add up over time.



Getting Help With Medicare Part D Costs


Costs for Medicare Part D can vary, and for those who need help, there is assistance available. Extra Help  is a federal program that helps with Medicare Part D costs. Depending on your financial situation, it can pay for some or all of your prescription drug coverage.



Other Ways To Pay For Medicare Part D Costs


When researching your Part D plans, look at everything you pay for Medicare. For example, you may find that a Medicare Advantage plan  or Part C can help you save. Many Medicare Advantage plans include prescription drug coverage as well as other benefits that give you bundled savings.


When you sign up for Medicare , look at all Part D plans that fit your drug coverage needs. Compare them with your Medicare costs  and see what works for you.

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