Insurance Health Insurance How Much Does Medicare Part D Cost? You Will Pay a Monthly Premium for Coverage By Tim Parker Tim Parker Facebook Twitter Tim Parker specializes in investing topics and is the president of IT services company "The Web Group." He has degrees from Wright State University and the University of Cincinnati. learn about our editorial policies Updated on October 23, 2022 Reviewed by Eric Estevez Fact checked by David Rubin Sponsored by What's this? & In This Article View All In This Article Sign Up As Soon As Possible Paths to Medicare Drug Coverage Medicare Part D Cost The Coverage Gap How To Shop for Coverage Frequently Asked Questions (FAQs) Photo: DNY59 / Getty Images Medicare comes in three parts: Part A, Part B, and Part D. Part C is a private alternative to Parts A and B. Part A is free for most people on Medicare. It covers hospital and hospice care, as well as short-term nursing and home health care. Part B covers doctor visits and the types of medical services you would receive at those visits. Part D covers prescription drugs and can be added to Parts A and/or B. Part B costs most people $170.10 per month in 2022 and $164.90 per month in 2023. Part D, which can be added to Part B, was projected to cost an average of $32.08 per month in 2022. This is expected to drop just a bit to about $31.50 in 2023. Here's what you need to know about Part D, and how much it will cost you. Key Takeaways Medicare Part D covers prescription drugs. It can be added to Parts A and/or B, or you can receive prescription drug coverage through a Medicare Advantage Plan (Part C).You pay your portion of the monthly premium if you receive Part D coverage as part of Medicare. The cost varies, but the nationwide average basic premium is expected to be $31.50 per month in 2023.Each plan will also have a copayment and coinsurance amount. Sign Up As Soon As Possible You can add Part D coverage to Medicare Parts A and/or B. Like Parts A and B (and most other insurance plans), plans generally come with a deductible. This is the amount you'll pay before the insurance begins paying a portion of costs. Just like Part B, you’ll probably pay a late enrollment penalty if you don’t sign up for prescription drug coverage when you’re first eligible unless one of two conditions applies: You have qualifying prescription drug coverage from another source, such as an employer's health plan.You receive Extra Help from Medicare. Extra Help assists low-income recipients in paying the costs of their prescription drugs. Paths to Medicare Drug Coverage Medicare Part D coverage is available through two different paths. You can add Part D coverage to Medicare Parts A and/or B. Medicare has a plan finder to help you pick the coverage that fits your goals and budget. You can search by zip code, input the prescription drugs you take, and provide your local pharmacy, along with some other information. The plan finder will give you Part D coverage options, including cost. Note Your other choice is to receive prescription drug coverage through a Medicare Advantage (Part C) or another Medicare health plan that offers prescription drug coverage as part of the plan. Part C coverage costs vary, but they average about $19.52 a month in 2022 and are expected to drop to about $18 a month in 2023. Plan C offers a better value than Parts A and B alone if you're willing to go to in-network providers. Medicare leaves a lot of coverage gaps that may leave you with medical bills that you’re unable to pay. Most people enroll in Part C coverage to protect against these costly expenses. Medicare Part D Cost You'll pay the monthly premium if you receive Part D coverage as part of Medicare. The cost varies depending on your income and the plan you choose, but the nationwide average basic premium is about $31.50 per month in 2023. Like Part B and most other insurance plans, these plans generally come with a deductible. This is the amount you'll pay before the insurance begins paying a portion of costs. The highest annual deductible allowed by Medicare in 2022 for Part D is $480, increasing to $505 in 2023. Many plans come with a much smaller deductible, and some don’t have a deductible at all. Each plan will also have a copayment and coinsurance amount. A copayment is a fixed amount that you pay for your prescriptions. The copayment on generic drugs might be $5, while brand name drugs on certain tiers might require a $25 copayment. Higher tiers might require a larger copayment. You might pay a coinsurance amount for drugs in the highest tiers of 25%, making your portion of the bill $100 if the prescription costs $400. Some drugs could require copayment and coinsurance. Note Part D is administered through private insurance companies. Each may place certain drugs in different tiers. You might pay higher out-of-pocket expenses for the same drug in a different plan. The Coverage Gap Once you and your plan have spent $4,430 on covered prescription drugs in 2022, you enter the coverage gap, or the "donut hole" as it's sometimes called. This is expected to increase to $4,660 in 2023. The coverage gap is a temporary limit on what the plan will cover for drugs. You won’t enter a coverage gap if you receive Extra Help from Medicare, but most insurance plans don't cover the gap. While you're in the coverage gap, 75% of the price of both branded and generic drugs is covered. Your out-of-pocket expenses are what will eventually move you out of the coverage gap, and most of what you pay while in the gap will count. Some drug companies have signed an agreement with Medicare to offer discounts on brand name drugs to people in the coverage gap. How To Shop for Coverage Sometimes cheaper is better, but that's typically not the case with Medicare Part D. Look at the benefits and compare them to what you would pay out of pocket. Also look at the costs before, during, and after the donut hole. Look at the premium once you calculate how much you would pay compared to what the plan would pay. Sometimes a higher premium will cost you less because your out-of-pocket expenses are lower. Frequently Asked Questions (FAQs) What is "Extra Help" from Medicare and how do I find out if I qualify? Extra Help will pay Part D premiums, deductibles, and copays for those who meet certain income thresholds. This can amount to about $5,100 a year in assistance. The Social Security Administration provides a tool on its website to help you determine if you qualify. Is paying for Medicare Part D worth it? Check the plan’s coverage for the drugs you currently take. Your out-of-pocket expenses will more than negate the money you saved on the premiums if a low-cost plan doesn’t cover your drugs. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Centers for Medicare & Medicaid Services. "2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts." Centers for Medicare and Medicaid Services. "CMS Releases 2023 Projected Medicare Basic Part D Average Premium." Centers for Medicare & Medicaid Services. “How To Get Prescription Drug Coverage.” medicareresources.org. "How Are Medicare Benefits Changing for 2023?" Centers for Medicare & Medicaid Services. "CMS Releases 2023 Projected Medicare Basic Part D Average Premium." Centers for Medicare & Medicaid Services. “Yearly Deductible for Drug Plans.” Centers for Medicare & Medicaid Services. “Copayment/Coinsurance in Drug Plans.” Kurt Lavetti and Kosali Simon. "Strategic Formulary Design in Medicare Part D Plans." American Economic Journal: Economic Policy. Centers for Medicare & Medicaid Services. “Costs in the Coverage Gap.” Centers for Medicare and Medicaid Services. “Part D Information for Pharmaceutical Manufacturers.” Social Security Administration. "Extra Help With Medicare Prescription Drug Plan Costs."