Your Drug Coverage Costs will Vary Depending on:
- Your prescriptions and whether they’re on your plan’s list of covered drugs (formulary).
- What “tier” the drug is in.
- Which drug benefit phase you’re in (like whether you’ve met your deductible, or if you’re in the catastrophic coverage phase).
- Which pharmacy you use (whether it offers preferred or standard cost sharing, is out of network, or is mail order). Your out-of-pocket drug costs may be less at a preferred pharmacy because it has agreed with your plan to charge less.
- Whether you get Extra Help paying your Medicare drug coverage costs.
How much is Medicare Part D?
Most Part D drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you’re in a Medicare Advantage Plan (Part C) or Medicare Cost Plan with drug coverage, the monthly premium may include an amount for drug coverage.
In 2022, there are many Medicare Part D plans to choose from in each state – sometimes 20 or more. Plans range from as low as $7 in some states to over $200+. Every insurance company sets its own formulary (list) of medications that are covered by the plan. Therefore, they can determine what monthly premium they will charge for the plan each year.
Most people only pay their Part D premium. If you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty.
If you have a higher income, you might pay more for your Medicare drug coverage. If your income is above a certain limit, you’ll pay an extra amount in addition to your plan premium (sometimes called “Part D-IRMAA”). You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage. This doesn’t affect everyone, so most people won’t have to pay an extra amount.
Yearly deductible for drug plans
This is the amount you must pay each year for your prescriptions before your Medicare drug plan pays its share.
Deductibles vary between Medicare drug plans. No Medicare drug plan may have a deductible more than $480 in 2022. Some Medicare drug plans don’t have a deductible.
In general, the drug plans that charge the deductible up front will have lower monthly premiums and lower drug copays. Some companies waive the deductible, but then you will see that the premiums and copays are usually higher than plans that charge the deductible.
Copayment/coinsurance in drug plans
These are the amounts you pay for your covered drugs after the deductible (if the plan has one). You pay your share and your plan pays its share for covered drugs. If you pay coinsurance, these amounts may vary throughout the year due to changes in the drug’s total cost. The amount you pay will also depend on the tiers level assigned to your drug.
Your plan may raise the copayment or coinsurance you pay for a particular drug when the manufacturer raises their price, or when a plan starts to offer a generic form of a drug, but you keep taking the brand name drug.
Watch below for how drug costs can differ by pharmacy.
A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles, and coinsurance.
Our federal government offers help with paying for your Part D drug plan expenses if you qualify. This is called the Low-Income Subsidy. Anyone can apply for this at Social Security, but help is awarded based on proving low-income and limited resources. You must have an annual income that falls below 150% of the Federal Poverty Level based on your household size.
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