What Medicare Part D actually costs.
Part D costs come from four places: monthly premium, annual deductible, copays during initial coverage, and (formerly) the coverage gap. The Inflation Reduction Act has reshaped some of these.
Monthly premium
Set by the carrier, varies by plan and service area. Higher-income beneficiaries pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of the standard premium.
Annual deductible
Set per plan, capped by CMS at an annual maximum. Some plans have $0 deductible; others use the maximum.
Copays / coinsurance
After the deductible, you pay a tier-based amount per prescription. Tier 1 (preferred generics) is typically lowest; specialty tiers are coinsurance-based (a percentage of the drug cost).
Out-of-pocket cap
Beginning in plan year 2025, Part D includes an annual out-of-pocket cap under the Inflation Reduction Act. Once your out-of-pocket reaches the cap (set by CMS each year), you pay $0 for covered prescriptions for the rest of the calendar year.
Medicare Prescription Payment Plan
Also new for plan year 2025: beneficiaries can opt to spread out-of-pocket costs across the calendar year in monthly payments instead of paying large copays upfront. This doesn’t lower total cost, but smooths cash flow.
Late enrollment penalty
A permanent addition to your premium if you went 63+ days without creditable drug coverage after becoming Part D-eligible.
How a licensed agent helps
A licensed El-Mag agent calculates total annual cost (premium + deductible + copays) across the plans available in your zip code, based on your actual prescription list — not just the headline premium.
Compare Part D plans.