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How much does Medicare drug coverage cost?

Your total costs for Medicare drug coverage will depend on which plan you choose. Depending on the plan, you could pay:

  • Premium: A monthly amount you pay for coverage, whether you get covered drugs or not.
    • Your specific premium will depend on the plan you choose. You may have to pay more, depending on your income. Who pays a higher Part D premium because of income?
    • If you have to pay a Part D late enrollment penalty , it’ll be added to your monthly premium.

Tip: Even if you don’t take many drugs now, or your current out-of-pocket drug costs are low, consider getting a drug plan with a low monthly premium so you can avoid the late enrollment penalty. All plans must cover a wide range of drugs that people with Medicare take.

  • Deductible: An amount you pay for covered drugs and items each year, before your plan starts to pay. Your deductible will depend on which plan you choose. No Medicare drug plan may have a deductible more than $590 in 2025, and some plans have no deductible.
  • Copayment: A fixed amount you pay for a drug at the pharmacy.
  • Coinsurance: A percentage you pay for a drug at the pharmacy.

How are copayments and coinsurance handled if I get less than a one-month supply of a drug?

Learn why drug costs can change.

Medicare drug coverage stages

Generally,  Medicare drug plans and Medicare Advantage Plans with drug coverage have 3 stages:

  • Deductible stage: If your Medicare plan has a deductible, you pay all out-of-pocket costs until you reach the full deductible. No Medicare drug plan may have a deductible more than $590 in 2025. Some Medicare drug plans don’t have a deductible.
  • Initial coverage stage: After you reach your full deductible (if your plan has a deductible), you’ll pay 25% of the cost as coinsurance for your generic and brand-name drugs until your out-of-pocket spending on covered Part D drugs reaches $2,000 in 2025 (including certain payments made on your behalf, like through the Extra Help program). Then, you’ll automatically get “catastrophic coverage.”
  • Catastrophic coverage stage: You won’t have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.

When you have Medicare drug coverage, you’ll get an Explanation of Benefits (EOB) the month after the pharmacy bills your plan. Your EOB shows the prescriptions you filled, what your plan paid, what you and others have paid, your coverage stage, and what counts toward your out-of-pocket costs and your total drug costs. 

How do I pay my plan’s premium? 

You can choose to pay your premium by:

  • Having your plan deduct it from your checking or savings account.
  • Charging it to a credit or debit card (fees may apply).
  • Having your plan send you a bill each month. Some plans bill in advance for next month’s coverage. Send your payment to the plan—not to Medicare. Contact your plan for their payment address.
  • Having your premium withheld from your Social Security payment. Contact your plan—not Social Security—to ask for this payment option. It may take up to 3 months to start. In cases where premiums weren’t withheld from your Social Security payment until 1 or 2 months after you joined a Medicare drug plan, you’ll get a bill for the months your drug plan’s premiums weren’t withheld. You’ll need to pay your drug plan’s monthly premium directly to your plan for those months. Your plan will tell you when your premium withholding from your Social Security payment is set up. 

What else do I need to know if I have premiums withheld from my Social Security payment?

How can I lower my drug costs?

If you qualify, there are programs that can lower your drug costs:

  • Medicaid: A joint federal and state program that helps cover medical costs for some people with limited income and resources. Each state has different income and resource requirements that determine who’s eligible. Contact your state to find out if you’re eligible.
  • Extra Help: A Medicare program that helps pay your drug costs. You automatically qualify for Extra Help if you qualify for Medicaid, one of the Medicare Savings Programs , or Supplemental Security Income (SSI) benefits from Social Security. If you don’t automatically qualify for Extra Help, you can apply.
    • Medicare’s Limited Income Newly Eligible Transition (LI NET): A Medicare program that provides temporary, immediate prescription drug coverage at the pharmacy counter to people with Medicare. It’s available to people who qualify for Extra Help but aren’t enrolled in a Medicare drug plan yet. LI NET covers all Part D covered drugs.
  • State Pharmaceutical Assistance Programs (SPAP): These programs provide coverage from your state (or the U.S. Virgin Islands) to help pay your drug plan premiums and/or cost sharing. SPAP contributions may count toward your Medicare drug coverage out-of-pocket limit. Eligibility depends on each program’s specific rules. 
  • Pharmaceutical Assistance Programs (sometimes called Patient Assistance Programs (PAPs)): Some pharmaceutical companies offer programs to help pay for medications for people enrolled in Medicare drug coverage (Part D). Find out if there’s a Pharmaceutical Assistance Program (PAP) that can lower prescription costs for the drugs you take. Each company has different eligibility requirements to participate in their program. Contact the company to find out if you’re eligible and start getting help.

The Medicare Prescription Payment Plan is a new payment option that works with your current Medicare drug coverage to help you manage your out-of-pocket costs for drugs covered by your plan by spreading them across the calendar year (January–December). This payment option might help you manage your monthly expenses, but it doesn’t save you money or lower your drug costs. 

What’s the Part D late enrollment penalty?

The Part D late enrollment penalty is an amount that’s permanently added to your Medicare drug coverage (Part D) premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage . After you join a Medicare drug plan, the plan will tell you if you have to pay a penalty and what your premium will be. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage. 

How much is the Part D late enrollment penalty?

The Part D late enrollment penalty is calculated by multiplying 1% times the “national base beneficiary premium” ($36.78 in 2025) times the number of full, uncovered months you were eligible to join Medicare drug coverage but didn’t (and didn’t have other creditable prescription drug coverage).

That amount is rounded to the nearest $.10 and added to your monthly premium. The “national base beneficiary premium” may go up each year, so your penalty amount may also go up each year.

Example: If you waited 14 months after you were eligible for Medicare to join a Medicare drug plan, and you didn’t have creditable drug coverage, you’ll have to pay a 14% late enrollment penalty in addition to your monthly plan premium. Here’s the math for the monthly Part D enrollment penalty.

The Part D late enrollment penalty is added to your premium for as long as you have Medicare drug coverage, even if you switch plans. However, if you get Extra Help , you don’t pay a late enrollment penalty.

What if I don’t agree with the Part D late enrollment penalty?

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