4 Medicare Part D costs you may not know about

Published by Medicare Made Clear®


Many people take at least one prescription drug every day. That makes drug costs a top concern when choosing a Medicare Part D plan.

Medicare Part D costs usually include premiums, deductibles, and co-pays. The specific amounts paid vary depending on the plan you have, the drugs you take, where you get your drugs, how often you need them and if you have any financial help (such as from the Extra Help program).

Here are four Part D costs that you may want to know more about as you review your Medicare drug coverage and costs.

1. Split-tier deductibles

Most plans have a tiered formulary (drug list). Tiered formularies organize drugs into tier levels, and typically the higher the tier number, the more expensive the drug. Generally, tier 1 drugs are generic drugs.

Part D plans may have no deductible, a split-tier deductible, or one deductible that applies to all drug tiers. It’s important to review plan materials and understand the costs when selecting a plan. Part D plans in your area may vary quite a bit. You want to make sure to choose a plan that covers the drugs you take at a cost you’re comfortable with.

2. Medicare Part D coverage gap (“donut hole”) costs

You may know about the Part D coverage gap (or the “donut hole”), but if you don’t, it’s important to understand that when you are in it, you may pay more for your medications.

Most people don’t enter the coverage gap because their drug costs aren’t high enough, but it’s still a good idea to understand how it works and what you could be financially responsible for.

3. Extra Part D premium

Most Medicare Part D plans charge a monthly premium. Premiums vary from plan to plan.

People with incomes over a limit set by Medicare must pay an extra amount in addition to their Part D plan premium. This is called a Part D income-related monthly adjustment. The extra amount paid varies depending on the tax-reported income, and are paid to the federal government.

See the table below for how much extra you could pay each month in 2022.1

Income levels for extra Part D premium
File individual tax return File joint tax return Married & separate tax return Your Part D monthly premium (2022)

$91,000
or less

$182,000
or less

$91,000
or less

Your plan’s premium

Over $91,000
& up to $114,000

Over $182,000 & up to $228,000

not applicable

$12.40 + your plan premium

Over $114,000 & up to $142,000

Over $228,000 & up to $284,000

not applicable

$32.10 + your plan premium

Over $142,000 & up to $170,000

Over $284,000 & up to $340,000

not applicable

$51.70 + your plan premium

Over $170,000 & less than $500,000

Over $340,000 & less than $750,000

Over $91,000
& less than $409,000

$71.30 + your plan premium

$500,000
and above

$750,000
and above

$409,000
and above

$77.90 + your plan premium

4. Part D late enrollment penalties

If you choose to work past 65, the Part D late enrollment penalty can sometimes catch you unawares if you’re not careful. Avoiding the penalty all comes down to one big thing –having creditable drug coverage.

Conclusion: Be aware of the costs you could pay

You may have many Medicare Part D plans to choose from. You may also choose a Medicare Advantage (Part C) plan that includes drug coverage. Part D costs is just one consideration when choosing a plan – but an important one. Look carefully at your options and costs.

About Medicare Made Clear

Medicare Made Clear brought to you by UnitedHealthcare provides Medicare education so you can make informed decisions about your health and Medicare coverage.

Get the latest

Boost your Medicare know-how with the reliable, up-to-date news and information delivered to your inbox every month.