How much do I pay for Medicare Part D?

Monthly Premium

Most 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 or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium may include an amount for prescription drug coverage.

Contact your drug plan if you want your premium deducted from your monthly Social Security or RRB payment. If you want to stop premium deductions and get billed directly, contact your drug plan.

IMPORTANT!

If you have a higher income, you might pay more for your Part D coverage.

If your income is above a certain limit, you'll pay an extra amount in addition to your plan premium which is 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. 

Usually, the extra amount will be deducted from your Social Security check. If you get benefits from the Railroad Retirement Board (RRB), the extra amount will be deducted from your RRB check. If you're billed the amount by Medicare or the RRB, you must pay the extra amount to Medicare or RRB and not your plan. If you don't pay the extra amount, you could lose your Part D coverage. You may not be able to enroll in another plan right away and you may have to pay a late enrollment penalty for as long as you have Part D. 

Visit socialsecurity.gov or call Social Security at 1-800-772-1213, 

TTY users can call 1-800-325-0778. 

Yearly deductible

This is the amount you must pay before your drug plan begins to pay its share of your covered drugs. Some drug plans don't have a deductible.

Copayments or Coinsurance

These are the amounts you pay for your covered prescriptions after the deductible. You pay your share and your drug 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. 

Catastrophic coverage

Once you've met your plan's out-of-pocket cost requirements for the year, you automatically get catastrophic coverage. With catastrophic coverage, you only pay a reduced coinsurance amount or copayment for covered drugs for the rest of the year.

Note: If you get Extra Help, you won't have some of these costs.

Visit Medicare.gov/plan-compare to get specific Medicare drug plan costs and call the plans you're interested in to get more details.

Part  D Late enrollment penalty

The late enrollment penalty is an amount that's permanently added to your Part D premium. You may owe a late enrollment penalty if, at any time after your Initial Enrollment Period is over, there's a period of 63 or more days in a row when you don't have Part D or other creditable prescription drug coverage. 

3 Ways to avoid paying a penalty:

1. Join a Medicare drug plan when you're first eligible. Even if you don't take prescriptions now, you should consider joining a Medicare Prescription drug plan or a Medicare Advantage Plan that offers drug coverage to avoid a penalty. You may be able to find a plan that meets your needs with little to no monthly premiums.
2. Enroll in a Medicare drug plan if you lose other creditable coverage. Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or individual health insurance coverage. Your plan must tell you each year if your drug coverage is creditable. If you go 63 days or more in a row without a Medicare drug plan or other creditable prescription drug coverage, you may have to pay a penalty if you join later.
3. Keep records showing when you had creditable drug coverage, and tell your plan if they ask about it. You don't tell the plan about your creditable prescription drug coverage, you may have to pay a penalty for as long as you have Part D coverage.

How much more will I pay?

The cost of the late enrollment penalty depends on how long you didn't have creditable drug coverage. 

Currently, the late enrollment penalty is calculated by multiplying 1% of the national base beneficiary premium by the number of full, uncovered months that you were eligible but didn't join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the national base beneficiary premium may increase each year, the penalty amount may also increase each year. After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. 

Example: 

Mrs. Martin didn't join a drug plan when she was first eligible- by June 2017. She doesn't have prescription drug coverage from any other source. She joined the Medicare drug plan during November 2019, and her coverage began on January 1, 2020.

Since Mrs. Martin was without creditable prescription drug coverage from July 2017- December 2019, her penalty in 2020 is 30% of $32.74 ( the national base beneficiary premium for  2020), which is $9.82. The final amount is rounded to the nearest $.10, so she'll be charged $9.80 each month in addition to her plan's monthly premium in 2020. She'll continue to pay a penalty for as long as she has Part D coverage, and the amount may go up each year.

Calculation:

.30 (30% penalty) x $32.74 (2020 base beneficiary premium) = $9.82

$9.80 = Mrs. Martin's monthly late enrollment penalty for 2020

What if I don't agree with the penalty?

If you disagree with your penalty, you can ask for a review or reconsideration. Generally, you must request this review within 60 days from the date on the first letter you get stating you have to pay a late enrollment penalty. You'll need to fill out a reconsideration request form by the date listed in the letter. You can provide proof that supports your case, like information about previous creditable prescription drug coverage. If you need help, call your plan provider.