Key Takeaways

  • If you have a Medicare Part D plan you may pay premiums, deductibles, copayments, or coinsurance for your prescription coverage.

  • The average monthly premium for a Part D plan is projected to be $31.50 in 2023, though plans vary.

  • Learn more about what people with Medicare Part D will pay for their prescription drug plans in 2023.

Medicare Part D can help pay for the cost of prescription drugs. Medicare Part D covers outpatient prescription drugs through a stand-alone plan that works with Original Medicare or as part of the benefits provided by a Medicare Advantage Plan. 

However, there are some out-of-pocket expenses in Part D you may have to pay. Here, we review some of these costs.

Part D Cost Sharing

Most people enrolled in a Part D plan (and not eligible for LIS/Extra Help assistance) have out-of-pocket expenses. Expenses may include:

  • A monthly Part D plan premium (average projected premium in 2023 is $31.50)
  • An annual deductible (maximum $505 in 2023)
  • A cost-sharing portion of plan-covered drugs (either a copayment or coinsurance) during the Initial Coverage Period
  • A percent of the cost of drugs once you pass the Initial Coverage Period (and enter what used to be called the coverage gap/donut hole) and
  • If you reach the Catastrophic Benefit Period in the Part D drug benefit, minimal drug copayments or coinsurance costs.

To better understand how the Part D benefit works and how much you may have to spend, check out the 2023 Part D Standard Plan Cost-Sharing Chart.

Note: Some people with higher incomes will pay more for their Part D premiums. This is called IRMAA, or Income-Related Monthly Adjustment Amount. Learn more about IRMAA.

Former Coverage Gap ("Donut Hole") Payments 

If you exceed the spending threshold in the Initial Coverage Period, you will enter what used to be called the Part D coverage gap/"donut hole." While this gap officially “closed” in 2020, you are still responsible for paying 25% of the costs of your generic and brand name drugs in this phase.