Part D costs vary by plan, location, and the drugs you take

Part D is prescription drug coverage, and what you pay depends on which plan you choose and which pharmacy you use. There is no single Part D cost — instead, each insurance company sets its own monthly premium, deductible, and copayments. A plan that costs $15 a month in one state might cost $35 in another. A drug that costs $10 at one pharmacy might cost $50 at another, even on the same plan.

Most people pay three separate amounts: a monthly premium (the cost to have the plan), a yearly deductible (what you pay before the plan starts helping), and copayments or coinsurance when you fill a prescription. Some plans have no deductible. Some have no monthly premium. The trade-off is usually that plans with lower premiums have higher copayments, and plans with higher premiums have lower copayments.

Key Takeaways

  • Part D monthly premiums range from $0 to over $100 depending on the plan and your location, and you can change plans every year during open enrollment.
  • Most plans have a yearly deductible (often $100 to $500) that you pay out of pocket before the plan covers any drugs.
  • You pay copayments or coinsurance at the pharmacy, and these amounts differ for generic drugs, brand-name drugs, and specialty drugs on the same plan.
  • If you have low income, you may pay reduced or zero premiums and deductibles through the Low-Income Subsidy program.
  • The same drug costs different amounts at different pharmacies, so comparing prices before you fill a prescription can save you hundreds of dollars a year.

Monthly premiums and what they cover

The monthly premium is what you pay to have Part D coverage, whether or not you fill any prescriptions that month. In 2024, premiums ranged from $0 to over $100 per month depending on the plan and your state. Plans with lower premiums usually charge higher copayments when you fill a prescription. Plans with higher premiums usually charge lower copayments.

You choose your Part D plan during the initial enrollment period when you first become may be able to access for Medicare, or during the annual open enrollment period from October 15 to December 7 each year. Your coverage starts January 1 if you enroll by December 7. If you miss the important date, you can only change plans if you have a may have access to life event, such as moving to a new state or losing other drug coverage.

If you do not enroll in Part D when you first become may be able to access and you do not have other drug coverage, Medicare charges a late enrollment penalty. The penalty is 1 percent of the national average Part D premium for each month you were not covered. That penalty stays on your account for the rest of your life, even if you join a plan later.

Deductibles and what you pay before coverage begins

Most Part D plans have a yearly deductible — an amount you must pay out of pocket before the plan starts to help pay for drugs. In 2024, deductibles ranged from $0 to $545, depending on the plan. Some plans have no deductible at all. Once you meet your deductible, the plan begins to share the cost of your prescriptions with you.

The deductible resets every January 1. This means if you reach your deductible in November, you start over at $0 in January. Some people delay filling prescriptions in December to avoid using up their deductible before the new year, then fill them in January when the deductible resets.

Copayments and coinsurance at the pharmacy

When you fill a prescription, you pay a copayment (a flat dollar amount) or coinsurance (a percentage of the drug's cost). The amount depends on which tier the drug is on. Most plans have four tiers: generic drugs (lowest cost), preferred brand-name drugs, non-preferred brand-name drugs, and specialty drugs (highest cost).

A generic drug might have a $5 copayment, a preferred brand-name drug might be $35, and a specialty drug might be $150 or more. These amounts are set by each insurance company, so the same drug can have different copayments on different plans. You can see the copayment for each drug before you enroll by using the plan's formulary — a list of covered drugs and their costs.

Some plans use coinsurance instead of copayments for certain drugs, meaning you pay a percentage (such as 20 percent) of the drug's cost rather than a fixed dollar amount. Specialty drugs almost always use coinsurance, which is why they can be very expensive if the drug itself is expensive.

The coverage gap and catastrophic coverage

Part D has a coverage gap, sometimes called the "donut hole." Once you and your plan have spent $5,830 on covered drugs in 2024, you enter the gap and pay more out of pocket until your total out-of-pocket spending reaches $7,050. After that, catastrophic coverage kicks in and you pay only a small copayment or coinsurance for the rest of the year.

The coverage gap amounts change every year. During the gap, you pay 25 percent of the cost of brand-name drugs and generic drugs. This is higher than what you paid before the gap. Many people with chronic conditions that require expensive drugs reach the gap every year.

If you have low income, the Low-Income Subsidy program may cover your costs during the gap. If you may have access to, you pay little or nothing during the gap instead of 25 percent. You can check whether you may have access to by contacting Social Security at 1-800-772-1213 or visiting your local Social Security office.

How to compare costs and find the lowest price

The same drug costs different amounts at different pharmacies, even on the same Part D plan. A 30-day supply of a common blood pressure medication might cost $10 at one pharmacy and $40 at another. You can compare prices by using the Medicare Plan Finder tool on Medicare.gov, or by calling pharmacies directly and asking for the price of your specific drug and dose.

Some pharmacies offer discount programs that are separate from Part D. GoodRx, SingleCare, and similar programs let you compare prices and sometimes pay less than your Part D copayment. You can use these programs instead of your Part D coverage if the discount price is lower. Always ask the pharmacist whether a discount program would save you money before you fill the prescription.

Mail-order pharmacies and 90-day supplies are often cheaper than 30-day supplies at retail pharmacies. If you take a drug regularly, ask your doctor whether a 90-day supply makes sense. Some plans charge two copayments for a 90-day supply instead of three, which saves money over the year.

Low-Income Subsidy and reduced costs

If your income is below 150 percent of the federal poverty level, you may may have access to for the Low-Income Subsidy (also called Extra Help). This program pays your Part D premium, deductible, and copayments. In 2024, the income limit was roughly $1,500 per month for a single person and $2,000 for a married couple, but these amounts change every year.

You do not have to be on Medicaid to may have access to for the Low-Income Subsidy. You can explore through Social Security by calling 1-800-772-1213, visiting your local Social Security office, or going online to ssa.gov. The process takes about 15 minutes. If you may have access to, Social Security sends your information to Medicare, and your plan's costs drop when ready.

If your income is slightly above the Low-Income Subsidy limit, you may still may have access to for a partial subsidy that reduces your premium and copayments. Ask Social Security whether you may have access to for any information.

Questions to ask your doctor and pharmacist

Before you fill a prescription, ask your pharmacist the price of the drug on your Part D plan. Ask whether a generic version is available and what it costs. Ask whether the pharmacy offers a discount program that would be cheaper than your copayment. Ask whether a 90-day supply would save you money.

Ask your doctor whether there are other drugs in the same class that might work as well but cost less. For example, if your doctor prescribes a brand-name blood pressure medication, ask whether a generic version or a different drug would work. Your doctor may not know the cost of the drugs they prescribe, so telling them the price helps them make a better choice.

Frequently Asked Questions

Can I change my Part D plan if I think I chose the wrong one?

Yes, during the annual open enrollment period from October 15 to December 7, you can switch to a different Part D plan. Your new coverage starts January 1. If you have a may have access to life event such as moving to a new state, you can change plans outside the open enrollment period.

What happens if I do not take any prescription drugs?

You still pay the monthly premium if you are enrolled in Part D. However, if you have no other drug coverage and you do not enroll in Part D, Medicare charges a late enrollment penalty when you do join, even if you never fill a prescription. The penalty is permanent.

Do I have to use a specific pharmacy?

Most Part D plans work at any pharmacy in their network, which includes most retail pharmacies and mail-order services. Some plans charge less at preferred pharmacies. You can use any in-network pharmacy, but comparing prices between pharmacies can save you money.

What if my drug is not on my plan's formulary?

You can ask your doctor to request a formulary exception, which means asking the insurance company to cover a drug that is not on the list. The insurance company usually approves exceptions if your doctor explains why that specific drug is medically necessary. This process takes a few days to a week.

Does Part D cover over-the-counter drugs?

No, Part D covers only prescription drugs. Over-the-counter medications are not covered, even if they are similar to prescription drugs. Some plans offer a separate benefit that lets you purchase certain over-the-counter items with plan funds, but this is rare.