Medicare Part D costs you a monthly premium, an annual deductible, and copayments or coinsurance when you fill prescriptions
Medicare Part D is prescription drug coverage run by private insurance companies approved by Medicare. What you pay depends on which plan you choose, which drugs you take, and when you enroll. There is no single "Medicare Part D cost" — premiums range from roughly $7 to $100+ per month depending on the plan and your location, and deductibles range from $0 to several hundred dollars per year.
The amount you pay also changes based on how much you spend on drugs. Once you hit certain spending thresholds, your costs shift — sometimes down, sometimes up — in ways that confuse many people. Understanding these layers helps you pick a plan that matches your actual prescriptions and budget.
Key Takeaways
- Part D premiums vary by plan and location, typically ranging from $7 to over $100 per month, and you pay this whether or not you fill any prescriptions.
- Most plans have an annual deductible you must pay out of pocket before the plan starts paying, ranging from $0 to around $545 in 2024.
- After you meet your deductible, you pay a copayment or coinsurance for each prescription, which varies by drug tier and plan.
- Once your total drug spending reaches a certain amount, you enter the "donut hole" where your costs jump sharply before Medicare information kicks in again.
- Your costs reset every January 1st, so a drug you paid for in December costs you again in January.
The monthly premium: what you pay to have the plan
The premium is the amount you pay each month to keep your Part D coverage active, regardless of whether you use it. Premiums are set by each insurance company and approved by Medicare, so they vary widely. In 2024, premiums ranged from about $7 per month for basic plans to over $100 per month for plans covering more drugs or offering extra benefits.
Your premium may be higher if you did not enroll in Part D when you first became may be able to access for Medicare. Medicare charges a late enrollment penalty — usually about 1% of the national average premium per month you were late — and this penalty stays on your premium permanently. If you were may be able to access at 65 and did not enroll until age 68, you would pay roughly 3% more on your premium for life.
Premiums change every year. Your plan may cost $25 in 2024 and $30 in 2025. Insurance companies announce new premiums in October for the following year, and you can switch plans during the annual enrollment period (October 15 to December 7) if a cheaper option becomes available.
The annual deductible: what you pay before the plan pays anything
Most Part D plans have a deductible — an amount you must pay out of your own pocket before the insurance plan starts paying for drugs. In 2024, deductibles ranged from $0 to around $545, depending on the plan. Some plans have no deductible at all, which means the plan starts paying when ready.
Once you meet your deductible in a calendar year, you move into the next cost stage. If your plan has a $250 deductible and you fill a prescription that costs $300, you pay $250 and the plan pays $50. The next prescription that year, you pay only your copayment or coinsurance — the deductible is already met.
Deductibles reset on January 1st every year. If you meet your deductible in November, you start over in January. This matters if you take expensive drugs near the end of the year — you may want to delay filling prescriptions until January to avoid paying two deductibles in a short time.
Copayments and coinsurance: what you pay per prescription
After you meet your deductible, you pay a fixed amount (copayment) or a percentage of the drug cost (coinsurance) each time you fill a prescription. The amount depends on which "tier" the drug falls into. Tier 1 drugs are usually generic and cheap; Tier 2 are preferred brand-name drugs; Tier 3 are non-preferred brand drugs; Tier 4 and 5 are specialty drugs or biologics that cost hundreds or thousands of dollars.
A typical plan might charge $10 for a Tier 1 generic, $35 for a Tier 2 preferred brand, $60 for a Tier 3 non-preferred brand, and 25% coinsurance for a Tier 4 specialty drug. If a specialty drug costs $2,000, you would pay $500 out of pocket. These amounts vary by plan — some plans charge less for generics but more for brands, or vice versa.
The copayment or coinsurance you pay counts toward your total out-of-pocket spending for the year. This matters because once you spend enough, you move into the next cost stage (the "donut hole"), where your costs change again.
The coverage gap (donut hole): where costs jump
Once your total out-of-pocket spending reaches a certain amount in a calendar year — $11,000 in 2024 — you enter the "coverage gap," often called the donut hole. In this gap, you pay a higher percentage of drug costs. For brand-name drugs, you pay 25% of the cost. For generic drugs, you pay 25% of the cost as well, though the calculation is complex.
The donut hole is temporary. Once your out-of-pocket spending reaches a second threshold — $12,200 in 2024 — you move into "catastrophic coverage," where Medicare pays most of the cost and you pay only a small copayment (about $11 per generic or $45 per brand in 2024). This catastrophic coverage continues for the rest of the calendar year.
Many people are surprised by the donut hole because their copayments suddenly double or triple mid-year. If you take expensive drugs, you may hit the donut hole every year. Some plans offer extra coverage in the donut hole to soften the jump, but you pay a higher premium for this benefit.
How income affects what you pay
If your income is low enough, you may may have access to for Extra Help, a federal program that pays some or all of your Part D costs. Extra Help covers premiums, deductibles, and copayments based on your income and household size. You do not pay anything if you may have access to for full Extra Help; if you may have access to for partial Extra Help, you pay a small amount and the program covers the rest.
To learn whether you may have access to, contact Social Security at 1-800-772-1213 or visit the Social Security website. You can also ask your local Area Agency on Aging or a Medicare counselor. Extra Help is not automatic — you must report your income and household situation to Social Security to be considered.
If your income is higher but you still struggle with drug costs, some pharmaceutical companies offer patient information programs that reduce or waive copayments for their specific drugs. Your pharmacist or doctor can tell you whether your drug has a program available.
Costs for different types of prescriptions
Generic drugs almost always cost less than brand-name drugs under Part D. A generic version of a common blood pressure medication might have a $10 copayment, while the brand-name version costs $50 or more. If your doctor prescribes a brand-name drug, ask whether a generic version exists and whether switching would lower your costs.
Specialty drugs — biologics, injectables, and drugs for cancer or rare conditions — often cost hundreds or thousands of dollars per dose. Part D plans typically charge coinsurance (a percentage) rather than a copayment for these drugs, so your cost depends on the actual drug price. A specialty drug costing $5,000 with 25% coinsurance means you pay $1,250 per dose.
Mail-order and 90-day supplies sometimes cost less per dose than filling a 30-day prescription at a pharmacy three times. Ask your pharmacist or insurance plan whether a 90-day supply would lower your total cost.
When and how to review your plan
Your Part D costs may change every year because premiums, deductibles, and drug tiers change. A plan that was cheapest for you in 2024 might be expensive in 2025. Medicare sends you a notice in October showing your plan's new costs for the coming year. Read this notice carefully — it tells you whether your premium is going up, whether your deductible is changing, and whether your drugs are moving to a different tier.
If your costs are rising or your drugs are moving to a more expensive tier, you can switch to a different plan during the annual enrollment period (October 15 to December 7). You can compare plans on Medicare.gov by entering your drugs and seeing which plans cover them and at what cost. Many people find a cheaper plan this way and save hundreds of dollars per year.
If you have a major life change — you lose income, your drugs change, or you move to a different state — you may be able to switch plans outside the annual enrollment period. Contact Medicare at 1-800-MEDICARE to ask whether you may have access to for a special enrollment period.
Frequently Asked Questions
Can I get Part D coverage with no premium or deductible?
Yes, some plans have $0 premiums and $0 deductibles, though they typically charge higher copayments per prescription. These plans make sense if you take only a few drugs or generic medications. Plans with low premiums and deductibles usually charge more per prescription, so compare your total expected costs, not just the premium.
What happens if I skip Part D and enroll later?
Medicare charges a late enrollment penalty of roughly 1% of the national average premium per month you were late. If you wait three years to enroll, you pay about 3% more on your premium permanently. The penalty applies even if you switch plans later, so enrolling on time saves money over your lifetime.
Do I pay the same copayment at every pharmacy?
Copayments are set by your insurance plan, not by the pharmacy, so you should pay the same amount at any pharmacy in your plan's network. However, mail-order pharmacies and 90-day supplies sometimes have different copayment structures. Ask your plan whether mail-order or 90-day supplies would cost less for your drugs.
What if my drug is not covered by my plan?
You can ask your doctor to request a coverage exception, or you can switch to a different Part D plan during the annual enrollment period that does cover the drug. Some plans cover more drugs than others, so comparing plans by your specific medications matters more than comparing by premium alone.
How do I know if I am in the donut hole?
Your insurance plan sends you a notice when you enter the donut hole, and you can check your spending anytime on your plan's website or by calling the customer service number on your insurance card. Tracking your spending helps you plan for the higher costs ahead and decide whether to delay filling prescriptions until you reach catastrophic coverage.