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Medicare Part D Costs

Summary: Recent changes stemming from the Inflation Reduction Act make Medicare Part D plans even more affordable for those on a fixed budget. The average Medicare Part D premium in 2024 is $55.50 with a maximum plan deductible of $545. Estimated Read Time: 6 min

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Table of Contents:

  1. Medicare Part D Premium 2024
  2. Medicare Part D Cost: Medicare Part D Coverage Phases
  3. Medicare Part D Deductible 2024
  4. Initial Coverage Limit for Medicare Part D in 2024
  5. Medicare Part D Costs in the Donut Hole
  6. Out-of-Pocket Threshold for Medicare Part D in 2024
  7. Is Medicare Part D Expensive?
  8. What Happens if I Miss a Medicare Part D Cost Payment?
  9. Medicare Part D Cost FAQs
  10. How to Get Help With Medicare Part D Costs in 2024

Medicare Part D costs include the premium, deductible, initial coverage limit, coverage gap (donut hole), and catastrophic coverage out-of-pocket threshold. Some of these costs are specific to your plan and will change annually. Thus, reviewing your plan each year during the Annual Enrollment Period is essential.

Below, we review the cost of Medicare Part D in 2024. Remember, Medicare Part D costs can vary by plan and location, so what you spend may look slightly different than your peers.

Medicare Part D Premium 2024

Medicare Part D prescription drug coverage is available through private insurance companies. These plans pair with Original Medicare (Part A and Part B).

Unlike Medicare Part A and Part B, the federal government does not provide Medicare Part D policies. Therefore, your premium depends on your carrier and plan selection. You will have several policy options within your ZIP Code, and each carrier will set its monthly Medicare Part D premium. It is up to you to decide which option is right for your needs.

In 2024, the average monthly Medicare Part D premium will be approximately $55.50.

Additionally, your premium cost may vary based on your income. If you receive an annual income higher than $103,000 individually or $206,000 as a couple, you will be responsible for paying a higher Medicare Part D premium due to IRMAA.

The chart below outlines the income brackets and how much you will pay in addition to your Medicare Part D plan’s premium in 2024.

2022 Annual Income: Individual 2022 Annual Income: Filing Jointly 2022 Annual Income: Filing Separately Medicare Part D Premium 2024
$0 – $103,000 $0 – $206,000 $0 – $103,000 Plan Premium
$103,001 – $129,000 $206,001 – $258,000 Plan Premium + $12.90
$129,001 – $161,000 $258,001 – $322,000 Plan Premium + $33.30
$161,001 – $193,000 $322,001 – $386,000 Plan Premium + $53.80
$193,001 – $599,999 $386,001 – $749,999 $103,001 – $396,999 Plan Premium + $74.20
> $500,000 + $750,000 + $397,000 + Plan Premium + $81.00

Medicare Part D Cost: Medicare Part D Coverage Phases

There are four coverage phases for Medicare Part D. These include:

  1. Deductible (not applicable on all plans)
  2. Initial coverage
  3. Coverage gap phase a.k.a. donut hole*
  4. Catastrophic coverage**

*In 2025, the coverage gap (donut hole) coverage phase will be eliminated due to the Inflation Reduction Act of 2022.

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**In 2024, the catastrophic coverage coinsurance will be eliminated.

Each of the four coverage phases has a different dollar amount you must meet to move on to the next phase in your Medicare Part D plan. During each phase, your plan will have a pre-determined amount you must pay for each drug. This amount varies by phase, policy, and carrier.

To depict all four Medicare Part D drug plan phases, we will follow Susan through her Medicare Part D journey. This year, Susan enrolled in a Medicare Part D plan with a $545 deductible. She takes high-tier drugs with high out-of-pocket copayments. Below, we will review Susan’s costs throughout each Medicare Part D drug phase.

Medicare Part D Deductible 2024

The Medicare Part D deductible is the out-of-pocket amount you must pay to receive the maximum benefit from your Medicare Part D plan.

Not every Medicare Part D plan has a deductible, and each Medicare Part D carrier can determine the deductible for their plans. However, in 2024, no plan can exceed the maximum Medicare Part D deductible of $545.

Suppose you qualify for and receive Extra Help. In this case, your maximum deductible will decrease.

Initial Coverage Limit for Medicare Part D in 2024

After reaching your deductible, the Medicare Part D initial coverage limit is the total amount you and your plan must spend before you enter the coverage gap phase of Medicare Part D.

In 2024, the initial coverage limit is $5,030. Once your out-of-pocket spending plus what your plan pays reaches this amount, you will enter the donut hole and cover 25% of your drug cost.

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Example: Susan has a Medicare Part D plan with a deductible of $545. By March, she meets this out-of-pocket deductible. Now, she moves into the initial coverage phase. Moving forward, she will be responsible for the copayments her Medicare Part D plan formulary outlines until her total drug cost is $5,030.

Medicare Part D Costs in the Donut Hole

The coverage gap (donut hole) begins once you reach your Medicare Part D plan’s initial coverage limit ($5,030 in 2024) and ends when you spend $8,000. In the donut hole, Medicare Part D enrollees will receive a 75% discount on the total cost of the brand-name drugs they purchase while in the donut hole. This means that you will be paying 25% of the cost for your generic and brand-name drugs.

Example: Once Susan meets her $5,030 initial coverage limit, she will be in the donut hole until the total cost of her drugs equals $8,000. While she is in this drug phase, she will be responsible for 25% of the retail cost of her drugs.

Medicare Part D costs vary by policy and are outlined in the formulary, which is the list of covered drugs. Policies covering prescription drugs usually categorize the drugs receiving coverage into cost tiers, with individual cost-sharing for the medications on each tier.

Medicare Part D Benefit Parameters

Out-of-Pocket Threshold for Medicare Part D in 2024

Once in the donut hole, you will need to reach your out-of-pocket threshold to move into the next phase of your drug plan – catastrophic coverage. In 2024, the Medicare Part D out-of-pocket threshold is $8,000.

Once you spend this amount on prescription drugs, you will no longer be required to pay out of pocket for your covered drugs. Your plan will cover the entire cost.

Example: Due to the high-cost drugs she is prescribed, Susan met her $545 deductible in March, her initial coverage limit of $5,030 in August, and now, she is out of the donut hole as her total drug costs equal $8,000 by November. She is no longer responsible for the cost of her covered drugs through the end of the year.

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Is Medicare Part D Expensive?

What you pay for Medicare Part D will depend on the prescription drugs you take throughout the year. You can find these medication costs outlined in your plan’s formulary.

As mentioned, carriers organize medications into tiers on their formularies. Typically, a Medicare Part D plan will include five levels, or tiers, of drugs.

Medications that fall on the higher tiers (4 and 5) involve higher coinsurance costs and copayments than those on the lower tiers (1 through 3). Private insurers set their premiums, so it pays to compare policies in your area to ensure that you make the right choice for your prescription drug needs.

Remember, Medicare prescription drug plans and Medicare Advantage drug plans vary regarding the medications they cover and the costs you pay. These discrepancies occur despite the prescription drugs being the same.

Medicare Part D Costs depend on:

  • The medications you take and how frequently you take them
  • Whether your pharmacy of choice is within your plan’s network
  • If your drugs are on your plan’s formulary
  • Whether you choose a stand-alone Medicare Part D prescription drug plan or a Medicare Advantage plan with prescription drug coverage (MAPD)
  • If you receive Extra Help with your Medicare Part D costs

Again, one significant Medicare Part D cost you should consider is the monthly premium. In addition, you will also need to pay an annual deductible and copayments/coinsurance.

What Happens if I Miss a Medicare Part D Cost Payment?

You may have options if you are late or miss a payment for your Medicare Part D prescription drug plan. Medicare has specific rules regarding late and missing payments. However, your carrier chooses how they will proceed.

These are Medicare’s rules for late Medicare Part D premium payments:

  • You can still receive coverage without penalties
  • You get a grace period and a warning
  • You receive a letter directing you to contact your plan for resolution

Your plan must notify you before dropping you. Grace periods can be granted and must be at least two months, but they can be more depending on your plan. The grace periods begin on the first day your premium is late.

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Medicare Part D Cost FAQs

Can my prescription be moved to a lower cost tier group?

If one or more of your prescriptions move to a more expensive formulary tier, you may contact your plan carrier and ask them to move your prescription to a lower-cost tier. However, it is up to the carriers discretion to move the medication into a lower tier.

My medication’s copayment is higher than retail cost. Will I pay more if I use my Medicare Part D plan?

No, you’ll always pay the lesser of your plan’s copay and retail drug cost. For example, if the plan’s copay for your medication is $39, but the negotiated retail cost is $15, you will only have to pay the retail cost.

What happens if I cannot afford my prescription medications?

The Extra Help program, or low-income subsidy, is available to qualifying low-income individuals. If you are a Medicare member and meet the program’s requirements, you may be eligible for Extra Help. Those who qualify will get help paying their Medicare Part D costs, which may include cost-sharing, deductibles, and premiums.

How to Get Help With Medicare Part D Costs in 2024

Medicare Part D costs are changing in 2024. It is our job to help keep you up to date and ensure you understand how cost updates impact you as a beneficiary. If you are concerned about your Medicare Part D costs, our licensed agents are here to help you find the most affordable option that will give you the most benefits. They will review all your prescriptions to make sure they are not only covered but will be at the lowest cost to you.

Give us a call now at the number above or use our compare rates form to see Medicare Part D rates in your area now.


MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Monthly premium for drug plans, Medicare. Accessed July 2022.
  2. Medicare costs at a glance, Medicare. Accessed July 2022.
Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare educator serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

6 thoughts on "Medicare Part D Costs"

  1. Why is a prescription fee withheld from my SS monthly check when I pay for SilverScript through Aetna, my Medicare Supplement?

    1. Hi Judith! Medicare Supplement plans and Medicare Part D (Rx coverage) will show as two different charges even if they are through the same carrier (like Aetna and Silverscript). Unfortunitely, your Medicare Supplement premium does not include the prescription covered provided through your Part D plan which is why you see the deduction from your SS check each month.

    1. Jim, if you did not elect any changes during the Annual Enrollment Period, elections from 2021 will roll over to 2022. For Part D plans it is important to review your coverage annually as the plan formularies do change.


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