Your costs for Medicare Part D consist of several different payments. The exact amount of these costs may vary depending on your plan, what tier a drug is in or what pharmacy you use.
Monthly premiums
For most prescription drug plans, you will pay a premium, or a monthly fee. This premium is paid in addition to the one you pay for Medicare Part B.
Monthly adjustment
If your income is above a certain limit, you may pay a monthly adjustment payment in addition to your prescription drug premium. See this
Yearly deductibles
For many plans, you may have to pay a certain amount each year for your prescription drugs before the Medicare drug plan kicks in to cover costs. This amount is called the yearly deductible. For 2024, no Medicare drug plan may have a deductible higher than $545.
Copayments or coinsurance
After you meet your deductible, your plan may require you to pay for part of the cost of your prescriptions. This amount is called the copayment or coinsurance. In 2024, once you and your insurance spend a combined total of $5,030 (including any applicable deductible), you will pay no more than 25% of the cost for prescriptions. This 25% cap will continue until your out-of-pocket spending hits $8,000.
Understanding the Coverage Gap
For most Medicare prescription plans, there is a temporary limit on what the plan covers. This is called the Coverage Gap, also known as the donut hole. In 2024, this Coverage Gap will be triggered once you and your plan spend a combined $5,030 on covered medications. Once you’re in the Coverage Gap, you will pay no more than 25% of the cost for covered Part D drugs in your plan.
Catastrophic coverage
Starting January 1, 2024, once your out-of-pocket spending reaches $8,000 (including certain payments made by other people or entities, including Medicare’s Extra Help program, on your behalf), you’ll move to the Catastrophic Coverage stage. This means you won’t have to pay a copayment or coinsurance for covered Part D drugs for the rest of the calendar year.
How to get Extra Help
Depending on your income, you may qualify for Extra Help. Extra Help is a program that assists those with limited resources in paying for their Medicare prescription drug costs.
You may automatically qualify for Extra Help if you have Medicare and are enrolled in any of the following programs:
- Full Medicaid coverage
- Assistance from your state Medicaid program for covering Part B premiums
- Supplemental Security Income benefits
Even if you don’t automatically qualify, you can
