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Medicare Part D prescription drug plans are sold by private health insurance companies, and their premiums vary by policy. In 2024, the average total Medicare Part D premium is predicted to be $55.50 per month, according to the Centers for Medicare & Medicaid Services (CMS).
You can find some Part D plans much cheaper and others much more expensive than that average. And new for 2024, there are Part D plans with $0 premiums.
Medicare Part D plan premiums range from $0 to $195.10 per month in 2024. Additional charges apply if you enroll late, have an extended gap in drug coverage or have a high taxable income.
Still deciding on the right carrier? Compare Medicare Part D Plans
What is Medicare Part D?
Medicare Part D is Medicare’s prescription drug benefit. It helps cover the costs of outpatient prescription drugs, something that’s not covered by Medicare Part A, which covers inpatient hospital care, or Part B, which covers outpatient health care.
For people with Original Medicare (Part A and/or Part B), purchasing a Part D plan adds important prescription coverage to your overall health insurance protection.
Medicare Advantage plans, a bundled alternative to Original Medicare sold by private health insurance companies, usually include prescription drug coverage, so you don't need to buy a Medicare Part D plan. (In most cases, if you buy a separate Medicare Part D plan, you lose your Medicare Advantage coverage.)
» MORE: Best Medicare Part D prescription drug plans
Is Medicare Part D free?
No, Medicare Part D isn't free. But in 2024, there are some plans with $0 premiums. They're offered by Wellcare in 16 states.
Most plans do have a monthly premium. And all plans have other costs beyond premiums, such as copays, coinsurance and deductibles.
How much does Medicare Part D cost?
As you’re shopping for Part D plans, make sure you understand the costs of what you’re getting.
Premium: The amount you must pay per month for the drug plan.
Deductible: The amount you must pay out of pocket before your insurance plan pays for covered drugs.
Out-of-pocket drug costs: The amounts you must pay as a copay or coinsurance when you fill a prescription.
Make sure you factor all three types of costs into your decision — you may find that drug costs are lower on one plan but the amount you spend on the monthly premiums is higher than a comparable plan. Consider the sum of all three parts in your decision.
You can enter information about your medications and pharmacies to see what you would pay with various plans, including premiums, deductibles, copays and coinsurance, in Medicare’s plan finding tool.
Premium
Each Medicare Part D plan determines its own premium and deductible. The average total monthly premium for Medicare Part D plans will be $55.50 in 2024, according to CMS. That’s down slightly from $56.49 in 2023.
The average monthly premium for a plan that offers only the basic benefits common to all Medicare Part D plans will be $34.50 in 2024, according to CMS. That’s up from $32.09 in 2023.
About three-quarters of beneficiaries are enrolled in plans that offer more than this basic coverage. Extra benefits could include lower copays or coverage for more drugs, for example. The added cost for the additional coverage on top of the basic benefit is predicted to be $21 per month in 2024. (The averages of $34.50 for basic benefits and $21 for supplemental benefits add up to the total monthly average of $55.50.)
Deductible
In general, plans with lower premiums have higher deductibles. But no plan can charge more than the maximum rate determined by the CMS. The maximum deductible is $545 in 2024. While the upfront premium costs might be lower, the coverage won't kick in until you hit the deductible. However, your drugs are often favorably priced because you have the insurance.
Copays and coinsurance
After you meet your deductible, your Medicare Part D plan will start to pay for its share of your prescriptions. But you’ll often have to pay either a copay (a set price, such as $10) or coinsurance (a percentage of the cost of the drug, such as 25%) when you fill a prescription.
What you’ll pay depends on the plan, the pharmacy and where the drug falls on the formulary, the plan’s tiered list of covered drugs. Drugs on lower formulary tiers usually have lower out-of-pocket costs, whereas drugs on higher tiers might be much more expensive.
» MORE: What you'll pay for Medicare in 2024
Shopping for Medicare Part D plans? We have you covered.
MEDICARE PART D covers outpatient prescription drugs for people on Medicare. Compare options from our Medicare Part D roundup. | |
Best for low premiums
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Star ratings from CMS and on a 5-★ scale. | |
Are there additional costs for high-income earners?
If your income exceeds a certain amount, you'll pay a surcharge on your Medicare Part D insurance. This surcharge is known as the Part D income-related monthly adjustment amount (IRMAA) and isn't part of the premium you pay separately to the insurance company.
High-income earners must pay the Part D IRMAA whether they choose a Medicare Part D plan or a Medicare Advantage plan that includes prescription drug coverage. The Part D IRMAA is never paid to your insurance company and is usually deducted from your Social Security check. If you aren’t yet collecting Social Security benefits, you’ll pay the additional charge directly to the Social Security Administration.
2024 Medicare Part D IRMAA
In 2024, you'll owe a Part D IRMAA if your modified adjusted gross income on your 2022 tax return was more than $103,000 filing as an individual or $206,000 filing jointly.
Here are the Part D IRMAA levels for 2024:
Individual tax return (2022 income) | Married filing jointly (2022 income) | Married filing separately (2022 income) | Monthly Part D cost (in 2024) |
|---|---|---|---|
$103,000 or less. | $206,000 or less. | $103,000 or less. | Your plan premium. |
Above $103,000 up to $129,000. | Above $206,000 up to $258,000. | Not applicable. | $12.90 plus your plan premium. |
Above $129,000 up to $161,000. | Above $258,000 up to $322,000. | Not applicable. | $33.30 plus your plan premium. |
Above $161,000 up to $193,000. | Above $322,000 up to $386,000. | Not applicable. | $53.80 plus your plan premium. |
Above $193,000 and less than $500,000. | Above $386,000 and less than $750,000. | Above $103,000 and less than $397,000. | $74.20 plus your plan premium. |
$500,000 or above. | $750,000 or above. | $397,000 or above. | $81 plus your plan premium. |
Source: Medicare.gov
What about the Part D late-enrollment penalty?
Medicare imposes a late-enrollment penalty if you go without Medicare Part D or other qualifying prescription drug coverage for a period of 63 days or more after the end of your Medicare initial enrollment period. This period generally starts three months before the month you turn 65 and ends three months after your birthday month.
You pay the Medicare Part D penalty in addition to your monthly premium cost for as long as your Medicare drug coverage continues.
The penalty is 1% of the national base beneficiary premium ($34.70 in 2024) per full month that you were eligible to enroll but didn’t. There’s no cap on the number of months.
For example, if you thought you didn’t need a Part D plan because you weren’t taking any prescriptions, then 72 months later you sign up because you need an expensive drug, you’ll be hit with a penalty equal to 72% of the national base beneficiary premium every month. That would be an extra $25 per month in 2024, and the penalty would continue as long as you have Medicare Part D, going up as the national base beneficiary premium rises over time.
» MORE: Calculate your potential Medicare D penalty
How to avoid the Part D late-enrollment penalty
Here’s how to avoid the Medicare Part D penalty, according to CMS:
Enroll in Medicare Part D or a Medicare Advantage prescription drug plan as soon as you become eligible for Medicare.
If you’ve lost your prescription plan, either due to an employer change or because your plan was discontinued, enroll in Medicare drug coverage immediately.
Keep good records of your drug insurance history so you’ll be able to provide proof of continuous previous coverage.
If you think Medicare has penalized you in error, you can request a reconsideration. You’ll have 60 days from the date you receive notification about the penalty to respond, and you’ll need to send the documentation that supports your case. Usually, you’ll receive a decision within 90 days.
Medicare Part D companies
Check out NerdWallet's reviews of major Medicare Part D companies.
AARP/UnitedHealthcare Medicare Part D.
Aetna Medicare Part D.
Cigna Medicare Part D.
Humana Medicare Part D.
Mutual of Omaha Medicare Part D.
Wellcare Medicare Part D.
The parts of Medicare
Read more about the different parts of Medicare and what they cover.
Medicare Part A (hospital insurance).
Medicare Part B (medical insurance).
Medicare Part C (Medicare Advantage).
Medicare Part D (prescription drug plan).
Medicare Supplement Insurance (Medigap).
