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How much will my drug coverage cost?

Your costs for Medicare prescription drug coverage will vary depending on which drugs you use, which Medicare drug plan you join, and whether you get extra help paying for your drug costs. Medicare drug plans may design their plans with different coverage and costs, as long as what their plan offers is at least as good as the standard coverage described on the next page.

Contact the plan(s) you are interested in to get specific cost information.

Medicare prescription drug coverage is insurance.

Payments you may make in a Medicare drug plan include the following:
  • 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 belong to a Medicare Advantage Plan or Medicare Cost Plan that includes Medicare drug coverage, the monthly premium you pay includes an amount for prescription drug coverage. Some drug plans charge no premium.

  • Yearly deductible —This is the amount you pay for your prescriptions before your plan begins to pay. Some plans charge no deductible.

  • Copayments or coinsurance —You pay these amounts for your prescriptions after the deductible. You pay your share and your plan pays its share for covered drugs.

  • Coverage gap—Most Medicare drug plans have a coverage gap (Donut Hole). Even if your plan does not offer supplemental gap coverage, you receive the Donut Hole discount You must also continue to pay your plan’s monthly premium while you are in the coverage gap. However, it’s important to note the following:
    • Plans with gap coverage may charge a higher monthly premium.
    • Some plans may offer only generic drug coverage during the gap.
    • Even if a plan offers gap coverage, check with the plan first to see if your drugs would be covered in the gap.

    Also see: Will my drug cost increase when I enter the Donut Hole?

  • Catastrophic coverage If you have extremely high drug costs, Medicare drug plans provide coverage called "catastrophic coverage." This means that once you have paid up to a certain limit for covered drugs in 2008, you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.25 or $5.60 for each prescription) for the rest of the calendar year.

    Keep in mind that 2023 was the last year that Medicare Part D beneficiaries paid cost-sharing in the Catastrophic Coverage phase.  For plan year 2024 and beyond, the Inflation Reduction Act (IRA) of 2022 eliminates beneficiary cost-sharing in the Catastrophic Coverage phase, so plan members will not have any out-of-pocket costs for formulary drug purchases after reaching the plan's 2024 $8,000 total out-of-pocket threshold (TrOOP); therefore, TrOOP becomes the RxMOOP in 2024.

    See the Catastrophic Coverage FAQs for current plan year information.
Note: If you get extra help paying your drug costs, some or all of your monthly premium may be covered, and you won’t have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount for each prescription.

The example below shows calendar year costs for covered drugs in a plan that meets Medicare’s standards in 2008: Mr. Jones joins the ABC Prescription Drug Plan. His coverage begins on January 1, 2008. He pays the plan a monthly premium throughout the year, even during his coverage gap. He doesn’t get extra help and uses his Medicare drug plan membership card.

1. Yearly deductible
----->		 2. Copayment / Coinsurance
----->		 3. Coverage Gap

----->		 4. Catastrophic Coverage
Mr. Jones pays the first $275 of his drug costs. Mr. Jones pays a copayment or coinsurance amount for each prescription, and his plan pays its share for each drug until his total drug costs (including his deductible) reach $2,510. Mr. Jones pays everything until he has spent $4,050 out-of-pocket. This amount includes his yearly deductible, his coinsurance or copays, and what he pays while in the coverage gap. This doesn’t include the drug plan’s premium. Once Mr. Jones has spent $4,050 out-of-pocket for the year, his coverage gap ends. Now he only pays a small coinsurance (like 5%) or a small copayment (like $2.25 or $5.60) for each prescription until the end of the year.




(Primary Source: Centers for Medicare and Medicaid Services - Your Guide to Medicare Prescription Drug Coverage 2008. This content may have been enhanced by Q1Group LLC to include further examples, explanations, and links.)


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Tips & Disclaimers
  • Q1Medicare®, Q1Rx®, and Q1Group® are registered Service Marks of Q1Group LLC and may not be used in any advertising, publicity, or for commercial purposes without the express authorization of Q1Group.
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDPCompare.com and MACompare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
    Statement required by Medicare:
    "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options."
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.
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