Part B costs most people $170.10 per month in 2022 and $164.90 per month in 2023. Part D, which can be added to Part B, was projected to cost an average of $32.08 per month in 2022. This is expected to drop just a bit to about $31.50 in 2023. Here’s what you need to know about Part D, and how much it will cost you.
Sign Up As Soon As Possible
You can add Part D coverage to Medicare Parts A and/or B. Like Parts A and B (and most other insurance plans), plans generally come with a deductible. This is the amount you’ll pay before the insurance begins paying a portion of costs. Just like Part B, you’ll probably pay a late enrollment penalty if you don’t sign up for prescription drug coverage when you’re first eligible unless one of two conditions applies:
Paths to Medicare Drug Coverage
Medicare Part D coverage is available through two different paths. You can add Part D coverage to Medicare Parts A and/or B. Medicare has a plan finder to help you pick the coverage that fits your goals and budget. You can search by zip code, input the prescription drugs you take, and provide your local pharmacy, along with some other information. The plan finder will give you Part D coverage options, including cost. Part C coverage costs vary, but they average about $19.52 a month in 2022 and are expected to drop to about $18 a month in 2023. Plan C offers a better value than Parts A and B alone if you’re willing to go to in-network providers. Medicare leaves a lot of coverage gaps that may leave you with medical bills that you’re unable to pay. Most people enroll in Part C coverage to protect against these costly expenses.
Medicare Part D Cost
You’ll pay the monthly premium if you receive Part D coverage as part of Medicare. The cost varies depending on your income and the plan you choose, but the nationwide average basic premium is about $31.50 per month in 2023. Like Part B and most other insurance plans, these plans generally come with a deductible. This is the amount you’ll pay before the insurance begins paying a portion of costs. The highest annual deductible allowed by Medicare in 2022 for Part D is $480, increasing to $505 in 2023. Many plans come with a much smaller deductible, and some don’t have a deductible at all. Each plan will also have a copayment and coinsurance amount. A copayment is a fixed amount that you pay for your prescriptions. The copayment on generic drugs might be $5, while brand name drugs on certain tiers might require a $25 copayment. Higher tiers might require a larger copayment. You might pay a coinsurance amount for drugs in the highest tiers of 25%, making your portion of the bill $100 if the prescription costs $400. Some drugs could require copayment and coinsurance.
The Coverage Gap
Once you and your plan have spent $4,430 on covered prescription drugs in 2022, you enter the coverage gap, or the “donut hole” as it’s sometimes called. This is expected to increase to $4,660 in 2023. The coverage gap is a temporary limit on what the plan will cover for drugs. You won’t enter a coverage gap if you receive Extra Help from Medicare, but most insurance plans don’t cover the gap. While you’re in the coverage gap, 75% of the price of both branded and generic drugs is covered. Your out-of-pocket expenses are what will eventually move you out of the coverage gap, and most of what you pay while in the gap will count. Some drug companies have signed an agreement with Medicare to offer discounts on brand name drugs to people in the coverage gap.
How To Shop for Coverage
Sometimes cheaper is better, but that’s typically not the case with Medicare Part D. Look at the benefits and compare them to what you would pay out of pocket. Also look at the costs before, during, and after the donut hole. Look at the premium once you calculate how much you would pay compared to what the plan would pay. Sometimes a higher premium will cost you less because your out-of-pocket expenses are lower.
