Medicare Part D is an option that covers prescription medications through private insurance companies, helping reduce drug costs for plan participants. The plan can also be referred to as a Medicare Prescription Drug Plan (PDP).

What Variables Will Affect Medicare Part D Costs?

What you will pay as a participant can vary depending on the following:

  • Your level of plan coverage
  • Your income level
  • The state you live in
  • Your budget as it relates to how much you are willing to pay for premiums, deductibles, copayments, and coinsurance.

Part D premiums, deductibles, and coinsurances/copayments can change every year. Participants will get an Annual Notice of Change (ANOC) every fall notifying them of any changes.

What are the Premium Costs for Medicare Part D?

The amount you pay can change annually. If you don’t sign up for Medicare Part D when you are first eligible you may incur a Part D late enrollment penalty. The average 2022 basic Part D premium cost is forecasted to come in at $33 per month.

The insurance companies set their own premium costs and some high-income beneficiaries (roughly 8% of people on Part D) may have to pay more through what is called a “income-related monthly adjustment amount” (Part D IRMAA).  This amount isn’t part of the plan premium, and most people have the amount taken out of their Social Security check.  You will get a notification from Social Security if you are required to pay IRMAA. The ranges listed below are the IRMAA costs you will have to pay in addition to your monthly Part D premium.

2022 IRMAA related premium costs for Part D high-income beneficiaries:

Monthly Cost Range for an individual tax filer:
starts at $12.40 earning more than $91,000
up to $77.90 for someone earning more than $500,000.

Monthly Cost Range for joint tax filers:
starts at $12.40 earning more than $182,000
up to $77.90 for joint tax filers earning more than $750,000.

Monthly Cost Range for Married Couples but filing taxes separately:
starts at $71.30 earning more than $91,000
up to $77.90 for tax filers earning more than $409,000

IRMAAs do not effect your deductible costs and do not apply to Part A premiums or Medicare Advantage plans that do not have prescription drug coverage. For more information visit What is IRMAA and Which Medicare Costs are Based on Income?

What are the Deductible Costs for Medicare Part D?

The annual deductible you pay before Medicare starts covering or sharing the cost varies by plan where some participates may pay no deductible. The maximum deductible amount participants pay cannot be more than $480 per year.

What is the Copayment or Coinsurance Costs for Medicare Part D?

Once the participant has paid the annual deductible amount Medicare’s Part D cost sharing program will kick-in. This is where the participant will pay a percentage of the prescription cost and Medicare will cover the rest. This percentage will vary by plan. Your plan D copayment or coinsurance cost may go higher if a particular drug’s price is increased by the manufacturer or if it offers a generic drug, but you opt to continue with the brand name prescription.

The following participant costs below illustrate what would occur if you were not part of the federal Extra Help program which helps pay for out-of-pocket costs for low-income individuals:

  • The participant will enter into what is termed as a coverage-gap if the shared combined total Plan D costs reach $4,430 total (including deductible in 2022).
  • During the coverage gap the participant will pay 25% for the cost of drugs up to a $7,050 out-of-pocket threshold.
  • Any amount after that threshold the participant will now enter into what is termed as catastrophic coverage where you will pay 5% of the cost for drugs or $3.95 for generics and $9.85 for brand name drugs (whichever is greater).


  1. 2022 Part D Income-Related Monthly Adjustment Amounts, CMS.
  2. Projected Medicare Part D Average Premium, CMS.