Medicare Part D offers prescription drug coverage. In 2025, the highest deductible that a stand-alone prescription drug plan can charge is $590.

The deductible is the amount you pay each year before your Medicare begins to pay.

Some drug plans charge a $0 yearly deductible, but this amount can vary depending on the insurer, your location, and more.

Your deductible usually isn’t your only out-of-pocket cost. When you enroll in a Part D plan, you’re responsible for paying premiums, copayments, and coinsurance amounts.

Premiums

The premium is the monthly amount you pay to enroll in your prescription drug plan. Some drug plans charge a $0 monthly premium.

The monthly premium for any plan can vary depending on several factors, including your income.

If your income exceeds a certain threshold, you may have to pay an income-related monthly adjustment amount (IRMAA). The adjusted amount for 2025 is based on your 2023 tax return.

If you file an individual tax return and make:

  • above $106,000 up to $133,000, you’ll pay an additional $13.70 on top of the plan premium
  • above $133,000 up to $167,000, you’ll pay an additional $35.30 on top of the plan premium
  • above $167,000 up to $200,000, you’ll pay an additional $57 on top of the plan premium
  • above $200,000 up to $500,000, you’ll pay an additional $78.60 on top of the plan premium
  • $500,000 or more, you’ll pay an additional $85.80 on top of the plan premium

If you file a joint tax return and make:

  • above $212,000 up to $266,000, you’ll pay an additional $13.70 on top of the plan premium
  • above $266,000 up to $334,000, you’ll pay an additional $35.30 on top of the plan premium
  • above $334,000 up to $400,000, you’ll pay an additional $57 on top of the plan premium
  • above $400,000 up to $750,000, you’ll pay an additional $78.60 on top of the plan premium
  • $750,000 or more, you’ll pay an additional $81 on top of the plan premium

If you file a married and separate tax return and make:

  • above $106,000 up to $394,000, you’ll pay an additional $78.60 on top of the plan premium
  • $394,000 or more, you’ll pay an additional $85.80 on top of the plan premium

Copays and coinsurance

The copayment and coinsurance amounts are the costs you pay after your deductible has been met. Depending on the plan you choose, you will either owe copayments or coinsurance fees.

A copayment is a set amount that you pay for each drug. Coinsurance is the percentage of the drug cost that you are responsible for paying.

Copayment and coinsurance amounts vary depending on the drug’s tier within a formulary, or drug list. The tier a drug appears under depends on its cost. Higher cost drugs are typically in higher tiers.

For example, your prescription drug plan may have the following tier system:

  • Tier 1 ($): generics
  • Tier 2 ($$): preferred brand names
  • Tier 3 ($$$): nonpreferred brand names
  • Tier 4 ($$$$): specialty

Part D plans used to have a coverage gap, which people called a “donut hole.” This was a temporary limit on how much your prescription drug plan would pay for your medications.

However, new prescription drug laws mean that, in 2025, the maximum out-of-pocket drug costs will be $2,000.

The $2,000 in out-of-pocket costs can include:

  • your Part D deductible
  • your drug copayments
  • any applicable coinsurance

Once you’ve paid this out-of-pocket amount, your catastrophic coverage kicks in. You won’t have to pay anything for your covered prescriptions for the rest of the calendar year.

Medicare beneficiaries who have trouble meeting prescription drug costs may benefit from the Extra Help program.

Extra Help is a Part D program that assists in paying premiums, deductibles, copayments, and coinsurance costs associated with your prescription drug plan.

To qualify for Extra Help, your resources must not exceed a set total amount. Your resources include cash on hand or in the bank, savings, and investments. If you qualify for Extra Help, you can apply through your prescription drug plan with supporting documents, such as an official Medicare notice.

Even if you don’t qualify for Extra Help, you may still qualify for Medicaid. Medicaid provides healthcare coverage for people with limited income who are under 65 years old.

However, depending on income level, some Medicare beneficiaries are also eligible for Medicaid coverage. To determine eligibility for Medicaid, visit your local Social Security office.

Other cost-saving tips

  • Shop at different pharmacies: Pharmacies may sell drugs for different amounts. Call around to ask how much a specific drug might cost.
  • Use manufacturer coupons: Manufacturer websites, drug savings websites, and pharmacies may offer coupons to help lower your out-of-pocket drug cost.
  • Ask your prescribing physician about generic versions: Generic medications often cost less than the name-brand versions, even if the formula is almost identical.

Part D helps pay for prescription drugs. It’s optional and offered to everyone with Medicare.

When shopping around for prescription drug coverage, consider which of your medications are covered and how much they will cost.

To compare Part D or Medicare Advantage with prescription drug plans near you, visit Medicare’s Find a Plan tool.