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What are the costs for Medicare Part D?

Medicare doesn’t automatically cover prescriptions, but you can buy Part D drug coverage from a private insurer. The costs you may pay out of pocket include:

  • A premium, your plan’s monthly bill.
  • A copayment, a set fee based on the plan’s rules that you pay to a pharmacy for each of your prescriptions after you meet any deductible.
  • A deductible, the set amount you pay to a pharmacy each year before the insurance kicks in.
  • Coinsurance, the percentage of costs you pay to a pharmacy for each of your prescriptions after you meet any deductible.

You can purchase either a stand-alone Part D plan or get health and drug coverage through a Medicare Advantage plan. You can acquire this coverage when you first enroll in Medicare or during open enrollment, Oct. 15 to Dec. 7 each year for coverage starting Jan. 1.

You also may be eligible to buy coverage or switch plans at other times. The average Medicare beneficiary has a choice of 59 Medicare plans with Part D drug coverage in 2024, including 21 stand-alone Part D plans and 36 Medicare Advantage plans with drug coverage, according to KFF, formerly the Kaiser Family Foundation.

Private companies that sell Medicare Part D coverage set their own premiums, deductibles and copayments but need to follow the federal government’s rules. For example, Part D plans can decide to charge a deductible, but the maximum deductible can’t be more than $545 in 2024.

Your actual costs for Part D depend on the options in your area, the plan you select, how much it charges for your medications, how much you’ve paid for drug costs so far during the year and your income.

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How much are Part D premiums?

The average premium for a stand-alone Part D plan is $55.50 a month in 2024. But the specifics can vary a lot by plan.

Average monthly premiums for stand-alone Part D plans range from less than $1 to nearly $200 per month in 2024, according to KFF. The full range of premiums may not be available in your area.

If you choose a Medicare Advantage plan with drug coverage, you’ll generally pay one monthly premium for all benefits — hospital, medical and prescription drugs. The average monthly premium for Medicare Advantage enrollees is $18.50 in 2024 in addition to the standard Part B premium of $174.70.

If you didn't sign up for a stand-alone Part D policy or a Medicare Advantage plan with drug coverage when you were first eligible and you don't have similar drug coverage from another source, such as a retiree plan or Tricare military health care, then you may have to pay a permanent late enrollment penalty for Part D.


What are Part D costs for higher incomes?

High earners pay more for drug coverage, whether they have it through a stand-alone Part D plan or a Medicare Advantage plan.

If you’re single and your adjusted gross income is higher than $103,000, or if you’re married filing jointly with income greater than $206,000, you’ll have to pay a high-income surcharge, called the income-related monthly adjusted amount (IRMAA), for Part D in addition to your plan’s premium. In 2024, monthly IRMAA surcharges range from $12.90 to $81 for those with higher income levels.

You pay your regular premium to the plan and the surcharge to Medicare. Most people have the surcharge paid directly from their Social Security check if they’re already taking retirement benefits.


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The surcharge is usually based on your most recent income tax return on file (2022 for most people in 2024). But if your income dropped since then because of certain life-changing events — such as marriage, divorce, death of a spouse or retirement — you can contest the high-income surcharge and ask the Social Security Administration, which manages these surcharges, to recalculate your premiums based on your more recent income.

What are Part D out-of-pocket costs?

The amount you must pay beyond the premium depends on whether a plan has a deductible, how the plan covers your medications and how much you’ve already spent on prescriptions during the year.

Part D plans can charge a deductible of up to $545 in 2024, although many plans don’t charge deductibles. If yours does, you’ll have to pay the full cost of your medications out of pocket until you reach the deductible.

After that, you’ll pay either copayments, which is the dollar amount the plan charges for your medications, or coinsurance, the percentage of the cost the plan charges you for your medications, until you and your plan have spent $5,030 in 2024.

Each plan negotiates with drug manufacturers and pharmacies. Your copays or coinsurance rates are based on your plan’s negotiated prices and Medicare guidelines.

Most plans have four or five pricing tiers; higher tiers come with larger out-of-pocket costs.

  • Tier 1: Preferred generic drugs
  • Tier 2: Nonpreferred generic drugs
  • Tier 3: Preferred brand-name drugs
  • Tier 4: Nonpreferred brand-name drugs
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  • Tier 5: Specialty drugs

No matter how a plan prices your medications, it needs to follow a general pricing structure that Medicare sets. After you and your plan have spent $5,030 in 2024, you’ll reach the coverage gap, formerly known as Medicare’s “donut hole,” and you’ll pay up to 25 percent of the cost of your medications.

When your out-of-pocket spending hits $8,000 in 2024 — the amount you’ve paid, not the insurer’s share — you’ll reach the catastrophic level. Starting in 2024, you no longer have to pay out-of-pocket costs for covered drugs for the rest of the calendar year.

How can I compare total costs for Part D plans?

You can compare the cost of premiums plus copayments for your drugs for all plans in your area using the Medicare Plan Finder. Type in your zip code, drugs and doses to see the copayments for your specific medications and an estimate for the total costs you’ll pay throughout the year.

Plans can change their Part D costs and coverage from year to year. Some even change their drug lists during the year, so compare your options every year during open enrollment to find the best plan for you.

Keep in mind

If your income and assets are below a certain level, you may qualify for the federal Extra Help program, which can help cover Part D premiums, deductibles and copayments. Eligibility for Extra Help benefits expanded significantly in 2024. If you qualify for Extra Help, you can switch Part D plans as often as once each quarter, and you won’t be subject to the late enrollment penalty if you delayed signing up for Part D without having other eligible coverage.

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