How Much Does Medicare Part D Cost?

Your share of Medicare Part D prescription drug costs include your monthly premium, yearly deductible, and copays or coinsurance. The national base premium for a Medicare Part D plan in 2022 is $33.37, and the maximum deductible a plan could set is $480, but some plans have no deductible.

Terry Turner, writer and researcher for RetireGuide
  • Written by
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner has more than 30 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).

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  • Edited By
    Matt Mauney
    Matt Mauney, Senior Editor for RetireGuide

    Matt Mauney

    Financial Editor

    Matt Mauney is an award-winning journalist, editor, writer and content strategist with more than 15 years of professional experience working for nationally recognized newspapers and digital brands. He has contributed content for,, The Hill and the American Cancer Society, and he was part of the Orlando Sentinel digital staff that was named a Pulitzer Prize finalist in 2017.

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  • Published: August 25, 2020
  • Updated: September 19, 2022
  • 6 min read time
  • This page features 13 Cited Research Articles
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APA Turner, T. (2022, September 19). How Much Does Medicare Part D Cost? Retrieved September 27, 2022, from

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Chicago Turner, Terry. "How Much Does Medicare Part D Cost?" Last modified September 19, 2022.

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What Determines Medicare Part D Premiums?

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.

The national base monthly premium for a Part D plan is $33.37 in 2022, according to the U.S. Centers for Medicare & Medicaid Services. Paying higher copays may lower your monthly premiums.

If you have a higher income — $91,000 for an individual tax filer, $182,000 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.

John Clark, licensed insurance advisor and owner of Senior Solutions Insurance Agency, explains formularies and coverage gaps of Part D prescription drug plans.

Medicare Part D Premium Payments from Social Security

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.

What Is the Medicare Part D Deductible?

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 2022, no company could set a deductible higher than $480.

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.

Bob Glaze, a licensed insurance agent, explains the importance of Medicare Part D in terms of covering prescription drugs.

Medicare Part D Copays and Coinsurance

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.

Copayment vs. Coinsurance
Copayments are a set dollar amount for all drugs on the plan’s tier. You may pay a lower copayment if you go with a generic drug than a brand-name prescription drug.
With coinsurance, you will pay a set percentage of your prescription drug’s cost.

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 their 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.

Learn why someone might change their Medicare Part D plan, courtesy of Tom Parkin, a Medicare expert who has more than a decade of experience in the insurance industry.

Medicare Part D ‘Donut Hole’ and Catastrophic Coverage

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 2022, you hit the donut hole once you and your Part D plan have spent a combined total of $4,430 on drugs the plan covers. Catastrophic coverage kicks in at $7,050. The amount may change from year to year.

What Counts Toward the Donut Hole and Catastrophic Coverage?
  • Your deductible, coinsurance and copayments
  • Discounts you receive on brand-name drugs once you are in the donut hole
  • What you pay out-of-pocket while in the donut hole
What Does Not Count Toward the Donut Hole and Catastrophic Coverage?
  • Your Medicare Part D monthly premium
  • Your pharmacy’s dispensing fee
  • Any money you spend out-of-pocket for drugs not covered by your plan

If you believe a year’s supply of your drugs will cost more than $4,430, 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.

Getting Out of the Donut Hole

In 2021, you have to ride out $2,620 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.

What Happens When Catastrophic Coverage Kicks In?

Once you reach $6,350 in out-of-pocket costs for Part D covered drugs, catastrophic coverage takes effect. That means you will pay only 5 percent or less for all of your 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.

Help Covering Medicare Part D Costs

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.

Last Modified: September 19, 2022

13 Cited Research Articles

  1. U.S. Centers for Medicare & Medicaid Services. (2022). Catastrophic Coverage. Retrieved from
  2. U.S. Centers for Medicare & Medicaid Services. (2021, November). 2022 Medicare Costs. Retrieved from
  3. U.S. Centers for Medicare & Medicaid Services. (2019, July 30). Annual Release of Part D National Average Bid Amount and Other Part C & D Bid Information. Retrieved from
  4. U.S. Centers for Medicare & Medicaid Services. (n.d.). Monthly Premium for Drug Plans. Retrieved from
  5. U.S. Centers for Medicare & Medicaid Services. (n.d.). Costs in the Coverage Gap. Retrieved from
  6. U.S. Centers for Medicare & Medicaid Services. (n.d.). Catastrophic Coverage. Retrieved from
  7. U.S. Centers for Medicare & Medicaid Services. (n.d.). Costs for Medicare Drug Coverage. Retrieved from
  8. U.S. Centers for Medicare & Medicaid Services. (n.d.). Monthly Premium for Drug Plans. Retrieved from
  9. U.S. Centers for Medicare & Medicaid Services. (n.d.). Yearly Deductible for Drug Plans. Retrieved from
  10. U.S. Centers for Medicare & Medicaid Services. (n.d.). Copayment/Coinsurance in Drug Plans. Retrieved from
  11. U.S. Centers for Medicare & Medicaid Services. (n.d.). Costs in the Coverage Gap. Retrieved from
  12. U.S. Centers for Medicare & Medicaid Services. (n.d.). Find Your Level of Extra Help (Part D). Retrieved from
  13. U.S. Social Security Administration. (n.d.). Extra Help With Medicare Prescription Drug Plan Costs. Retrieved from