How Much Does Medicare Part D Cost?

Medicare Part D premiums are the monthly fee you pay for coverage. Medicare Part D prescription drug plans are sold by private insurance companies that contract with Medicare.

The companies set up their own formularies, or lists of prescription drugs they will cover. They also set their own rates for the Medicare Part D plans they sell.

As a result, monthly premiums vary depending on the plan you buy and the insurance company that sells them. Your location can also affect how much your monthly Medicare premium costs.

Premiums may change from year to year. But beginning in 2024, and continuing through 2029, premium prices cannot rise more than 6% per year.

The national base monthly premium for a Part D plan is $36.78 in 2025, according to the U.S. Centers for Medicare & Medicaid Services. Paying higher copays may lower your monthly premiums.

If you have a higher income — $103,000 for an individual tax filer, $206,000 if you and your spouse file jointly — you will have to pay extra Medicare Part D costs.

If you don’t sign up for Medicare Part D prescription drug coverage as soon as you are eligible, you may have to pay a Part D late enrollment penalty. This is an additional payment added on to your Part D monthly premium.

You can have your monthly Medicare Part D premium automatically deducted from your Social Security payment each month.

It usually takes three months to start, and the first payment will withhold three months’ worth of premiums. After that, only one premium payment per month will be deducted.

Contact your drug plan — not Social Security — if you want your premiums automatically withheld.

The Medicare Part D deductible is the amount of money you have to pay out of your own pocket for your prescriptions each year before your prescription drug plan starts paying its share.

Deductibles vary based on the plan and the insurance company that sells it. But Medicare sets a maximum limit on the deductible that the company can set. In 2025, no company could set a deductible higher than $590.

Many Medicare Part D plans offer lower deductibles. Some plans even have a $0 deductible and will start paying a share of your drug costs immediately.

You should look at the overall cost of your drugs for a year — not just the deductible — when choosing a Part D plan. This means comparing your copay and coinsurance along with a year’s worth of premiums and comparing this to how much you’d save with lower deductibles.

You will only want to go with a $0 deductible plan if it has the lowest, overall yearly cost of the plans you’re considering.

Once you pay your Medicare Part D deductible, you will only pay a portion of the cost for your prescriptions for the rest of the year. These payments will be in the form of either a copayment or coinsurance.

Part D plans may also have different levels of copayments or coinsurance called tiers. These tiers can have different costs you have to pay for different types of drugs.

Each Medicare Part D prescription drug plan creates its own formulary, or list of drugs it covers. If you ask for a drug not on the list, you may have to pay the full price for it yourself. It’s important to see if your drugs are on a plan’s formulary before buying the plan.

Insurers may also change the list of drugs they cover from year to year. If they drop a drug, they are required to replace it with a similar drug that treats the same condition. You should monitor annual changes in the formulary in case it affects a prescription drug you take.

Starting in 2023, copays for a 30-day supply of any insulin that your Medicare Part D plan covers are capped at $35 — even if you have not met your deductible for the year. This rule runs through 2025. Starting in 2026, insurers will be able to negotiate prices with insulin suppliers. At that point, the copay for a 30-day supply will be either $35 per month or 25% of the negotiated price — whichever is cheaper.

Most Medicare Part D prescription drug plans have a coverage gap known as the “donut hole.” It’s when your Part D plan will put a temporary limit on what it will pay for your drugs. This gap or hole closes when you hit your catastrophic coverage amount for the year.

In 2025, you hit the donut hole once you and your Part D plan have spent a combined total of $5,030 on drugs the plan covers. Catastrophic coverage kicks in at $8,000. The amount may change from year to year.

If you believe a year’s supply of your drugs will cost more than $5,030, you may want to consider a Medicare Part D plan that will pay for generic and name-brand drugs through the coverage gap. There are a few of these plans available.

In 2024, you have to ride out $2,970 in prescription spending to get out of the coverage gap. Your share of the costs for drugs can change significantly during this time.

Once you’re in this donut hole, you have to pay up to 25 percent of the cost of any name brand drug your plan covers.

On the plus side, 95 percent of the cost of the drug — meaning a good portion of what your insurer pays — counts as your out-of-pocket costs toward getting out of this coverage gap.

In 2024, once you reach $8,000 in out-of-pocket costs for Part D covered drugs, catastrophic coverage takes effect. That means you will not have to pay a copay or coinsurance on covered drugs for the remainder of the year.

There’s no limit on the amount of covered medications you can receive after you’ve hit the catastrophic coverage amount.

If you have limited income and resources, a program called Extra Help may be able to help you with Medicare Part D prescription drug costs, including premiums, coinsurance and your deductible.

The U.S. Social Security Administration estimates that Extra Help is worth about $5,000 per year to those who receive it.

You can find out if you qualify and apply for Extra Help with Medicare Part D prescription drug costs at the Social Security website.

To qualify for the Extra Help program, you must be receiving Medicare, live in one of the 50 U.S. states or the District of Columbia and have limited resources and income.