Not exactly.  You need to look beyond just the monthly premium cost - especially if you use more than just low-cost generics.  In most cases, the "best" Medicare Part D prescription drug or Medicare Advantage plan for you is the plan that provides the most affordable health and prescription drug coverage on an annual basis at a pharmacy near you - and includes your healthcare providers if you are choosing to join a Medicare Advantage plan.

This means that your medications are covered at affordable prices at your favorite network pharmacies - and if you choose a Medicare Advantage plan, your healthcare providers are also affordably included in the plan's healthcare network.

Question:  Should we consider monthly premiums when selecting a Medicare Part D?

In some situations (example #1 below), you may find that the lowest-premium Medicare Part D plan or Medicare Advantage plan also offers the lowest-costing annual coverage.  In other situations (example #2 below), you may find the cost of your monthly premiums is almost insignificant as compared to the cost of covering your more expensive drugs.

Example #1 - If you use no medications, the lowest-premium drug plan may be the most affordable.

Some Medicare beneficiaries are able to simply enroll in a Medicare Part D plan with the lowest monthly premium because their medication needs are low or non-existent – that is, some people simply do not need Part D coverage, but they wish to avoid the late-enrollment penalty by joining a Medicare drug plan just in case their prescription drug needs change.

Example #2 - If you have extremely high medication costs, you may find a Medicare drug plan with a more generous (large) formulary is more important than choosing a drug plan with the lowest monthly premiums.

If you are a Medicare beneficiary with very high medication costs, you may wish to consider the lowest-premium Medicare Part D plan that most affordably covers all your medication.  That is, some people go into and out of the coverage gap so quickly, that, by the end of the year, monthly premiums will be only a small portion of a person's total annual drug spending.

For example, if you have monthly retail drug costs of $2,000 or more - you will go into - and out of the Coverage Gap in the first half of the year - and will spend the rest of the year in the Catastrophic Coverage phase of your Medicare drug plan where your costs will be reduced to around 5% of your retail drug prices in 2023.

Keep in mind that 2023 is the last year that Medicare Part D beneficiaries will pay cost-sharing in the Catastrophic Coverage phase.  For plan year 2024, the Inflation Reduction Act (IRA) of 2022 eliminates beneficiary cost-sharing in the Catastrophic Coverage phase.

For more information, please see our FAQ:   Will my Catastrophic Coverage drug costs change over the years?

In this high-cost example, the most important point is to ensure that your medications are covered by your chosen Medicare Part D plan.  Again, in such a situation where you have high monthly drug spending, monthly plan premiums may amount to only a very small portion of the annual healthcare costs - especially if you are able to find a Medicare Advantage plan with a low or $0 premium that includes drug coverage.

You can use our Donut Hole Calculator (PDP-Planner.com) to more accurately estimate (or visualize) your annual drug spending through the various phases of your Part D drug coverage, see an example for a person with retail drug costs totaling $800 in 2024.

You can see in our example PDP-Planner link above, if your retail drug costs are $800 a month, you will enter the 2024 Coverage Gap (Donut Hole) in July and never exit the Donut Hole. Your total annual Out-of-Pocket Costs (without considering monthly premiums) are estimated to be about $2,809.

So in this example,
(1) if you purchase formulary drugs that have a monthly retail cost of around $800 ($9,600 per year) and
(2) your Medicare Part D plan premium is $20 per month (chosen based on the popularity of stand-alone drug plans),
(3) your spending prescription drugs covered by your Part D plan will be around $2,809 per year and
(4) your total plan premium will amount to $240 - again, the monthly premium is a small part of the total drug spending per year.

(This out-of-pocket spending estimate will change each year and depend on your mix of generic and brand drugs purchased while in the Donut Hole.)

For more information about the monthly premium costs of Medicare Part D plans in your state, please try our Medicare Part D plan search tools:  PDPFinder.com and MAFinder.com