How Much Does Medicare Part D Cost?
Key takeaways:
Medicare Part D costs begin with a monthly premium — unless coverage is included in your Medicare Advantage (MA) plan, which also may have an additional premium beyond what you pay for Part B coverage.
When you begin accessing your prescription medications in a plan year, you typically have to pay a deductible. If you meet your deductible, your plan begins cost-sharing and you are responsible for copays and coinsurance.
There is a $2,000 out-of-pocket cap in 2025, after which your plan pays 100% of the costs of your covered medications for the rest of the year.
If you are not covered by a prescription plan that meets Medicare’s standard when you become eligible for Medicare, you could face a late-enrollment penalty that increases your Part D premiums later in life.
Medicare Part D plans, which cover prescription medications, vaccines, and certain medical supplies, may require you to pay a variety of out-of-pocket costs.
There are several ways to get prescription medication coverage with Medicare:
Having original Medicare — Part A and/or Part B — and buying a stand-alone Part D plan
Having a Medicare Advantage (MA) plan that includes Part D
Having an MA plan that doesn’t include prescription coverage and buying a stand-alone Part D plan
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We’ll look at the costs associated with Medicare Part D below.
How much does Medicare Part D cost?
Part D costs in 2025 are as follows:
Premiums
What you pay monthly varies, but the average projected premium is $46.50 overall (which includes prescription coverage that’s rolled into Medicare Advantage plans) and $40 for stand-alone Part D plans, according to the Centers for Medicare & Medicaid Services (CMS). You also may have your premium increased by up to $85.80 if you have a high income; this is called the income-related monthly adjustment amount, or IRMAA. You can get assistance paying for your premium if you qualify for the Extra Help low-income subsidy. People who don’t have prescription medication coverage (or creditable coverage for prescriptions from another source) from the time they become eligible for Medicare may face a late-enrollment penalty that increases their premiums later in life. The late-enrollment penalty doesn’t apply to people who qualify for Extra Help.
Deductibles, copayments, and coinsurance
In addition to the monthly cost of coverage, you have out-of-pocket costs when filling your prescriptions. Copayments and coinsurance vary by plan and pharmacy, but your deductible can’t exceed $590 for the year. What you pay for a medication depends on where it appears on your plan’s formulary, or list of covered medications. Most formularies have several tiers. Medications in lower tiers have smaller copays, while those in the highest tier come with significantly more out-of-pocket costs. You may be able to save on these costs if you qualify for Extra Help or other programs.
Out-of-pocket limit
Beginning on January 1, 2025, you are responsible for no more than $2,000 of your prescription costs in a year. Your plan pays 100% of your costs for covered prescriptions after you reach that spending cap. The coverage gap known as the donut hole ends in 2024 and won’t exist in the 2025 coverage year.
Do I pay for Part D if I have a Medicare Advantage plan?
The majority of MA plans include prescription medication coverage, and your cost for Part D with those plans is included in your MA premium. But some MA plans don’t include prescription medication coverage. In those cases, you will pay a monthly premium to buy a stand-alone Part D plan, which will have its own deductible.
Change your prescription coverage during Medicare open enrollment. The annual Medicare open enrollment period lasts for 7 weeks, beginning October 15 and ending December 7.
The “donut hole” disappears. The new Medicare Part D $2,000 out-of-pocket limit starts in 2025, and the coverage gap known as the “donut hole” ends on December 31, 2024.
Medicare prescription payment plans are available in 2025. As of January 1, 2025, anyone with Medicare Part D will have the option to make monthly payments for prescription medication costs instead of paying in full at the pharmacy.
Medicare Part D changes in 2025
The Inflation Reduction Act of 2022 changed the plan design for Medicare Part D benefits by eliminating the donut hole, or coverage gap, at the end of 2024. In 2025, Part D plans will be responsible for a larger share of medication costs.
When the donut hole sunsets, the Medicare Part D plan design will have three phases:
Deductible phase: During this phase, enrollees pay all of their prescription medication costs until they meet the Part D standard deductible, which is $590 in 2025. (Some plans have a lower deductible or no deductible.)
Initial coverage phase: Enrollees pay copays and coinsurance for all covered prescription medication costs until reaching the out-of-pocket maximum, which is $2,000 in 2025 and will be adjusted annually in the future based on inflation. Payments that you make throughout the year for your covered medications are the only ones that count toward your out-of-pocket limit. Manufacturer discounts on covered medications will no longer be calculated into your out-of-pocket spending.
Catastrophic coverage phase: Your plan pays 100% of the cost for covered medications for the rest of the year.
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When the coverage year resets on January 1, 2026, you return to the deductible phase.
Medicare Prescription Payment Plan
For the first time, Part D plans — whether stand-alone or rolled into an MA plan — must offer prescription payment plans for out-of-pocket costs. Instead of paying your entire share up front at the pharmacy when getting a prescription, you can now spread your costs out in monthly payments throughout the plan year. The payment plan won’t save you money, but it can help you manage your costs.
What does Medicare Part D cover?
Medicare Part D covers prescription medications, both brand-name and generic. These plans also cover certain medical supplies and vaccines that aren’t covered by Part B.
Vaccines covered by Medicare Part D include:
DTaP-IPV-Hib-HepB, a combination of diphtheria, tetanus, pertussis (whooping cough), inactivated polio virus, Haemophilus influenzae, and hepatitis B
DTaP/Tdap/Td, a combination of diphtheria, tetanus, and pertussis
Frequently asked questions
Medicare Part D can be beneficial if you need coverage for your prescription medications. Your investment of a monthly premium may be well worth it to enjoy lower out-of-pocket costs for your medications — instead of paying higher prices at the pharmacy. Starting in 2025, Medicare Part D enrollees can join a prescription payment plan. This option helps you access your prescriptions when they need to be filled, avoid paying in full at the pharmacy when you pick up your medications, and spread your out-of-pocket costs out over the year. Also in 2025, there is a $2,000 out-of-pocket cap, which is expected to be highly beneficial for enrollees who need costly medications.
Medicare Advantage meets or exceeds the benefits of original Medicare. But MA plans can have drawbacks that make them a less-than-ideal fit for some people. When compared with original Medicare, these potential disadvantages can include:
Limited provider networks
Annual benefit changes, especially for additional perks
Inability to join a Medigap supplement plan
Wider use of prior authorization
Higher end-of-life costs
Yes. If you have a high income, you could have an income-related monthly adjustment amount, known as an IRMAA, added to your premium. In 2025, this means your premium could increase by up to $85.80 per month. The IRMAA in 2025 is based on your filing status and income in 2023. The monthly adjustments start at $13.70 for individual tax return filers with incomes of more than $106,000 to $133,000 and joint filers with incomes above $212,000 to $266,000. An individual with income at or above $500,000 and a joint filer with income at or above $750,000 pay the highest IRMAA upcharges in 2025 — an additional $85.80 a month. There are monthly IRMAA amounts above $13.70 and below $85.80 for those with incomes between the highest and lowest tiers.
The bottom line
Medicare Part D covers prescription medications for people enrolled in original Medicare and Medicare Advantage (MA) plans. Most MA plans include Part D coverage. You will need to buy a stand-alone Part D plan if you have original Medicare or if your prescriptions are not covered by your MA plan.
Besides a premium, your Part D costs may include a deductible, copays, and coinsurance when you need to fill prescriptions. Once you’ve spent $2,000 out of pocket, you enter the Part D catastrophic coverage phase and your plan pays 100% for covered medications for the rest of the year.
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References
Assistant Secretary for Planning and Evaluation: Office of Health Policy. (2023). —Inflation Reduction Act Research Series— Medicare Part D enrollee out-of-pocket spending: Recent trends and projected impacts of the Inflation Reduction Act. U.S. Department of Health & Human Services.
Centers for Medicare & Medicaid Services. (2024). Inflation Reduction Act and Medicare.
Centers for Medicare & Medicaid Services. (2024). Medicare Advantage and Medicare Prescription Drug Programs to remain stable as CMS implements improvements to the programs in 2025.
Centers for Medicare & Medicaid Service. (2024). Final CY 2025 part D redesign program instructions fact sheet.
Cubanski, J., et al. (2023). Changes to Medicare Part D in 2024 and 2025 under the Inflation Reduction Act and how enrollees will benefit. Kaiser Family Foundation.
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