Medicare Part D Monthly Premium: What You Really Pay for Prescription Coverage

When you sign up for Medicare Part D, a federal program that helps cover the cost of prescription drugs for people on Medicare. Also known as Medicare prescription drug coverage, it’s not free—and the monthly premium can vary wildly depending on your income, plan choice, and where you live. Many assume Part D is a flat fee, but that’s not true. Some people pay as little as $0, while others pay over $100 a month. It all depends on whether you qualify for extra help, which plan you pick, and if you’re subject to the income-related monthly adjustment amount (IRMAA).

The Medicare Part D monthly premium, the amount you pay each month to your private insurance company for drug coverage under Medicare. Also known as drug plan premium, it’s separate from your Part B premium. And here’s the catch: even if your plan says it’s $0, you might still owe money if your income is above a certain level. The Social Security Administration checks your tax returns from two years back to decide if you pay more. For example, if you file as an individual and earn more than $106,000, or as a couple earning more than $212,000, your premium goes up—sometimes by hundreds of dollars a month. Then there’s the deductible. Some plans have one, some don’t. And once you hit the deductible, you pay a percentage of each drug’s cost until you hit the coverage gap—also called the donut hole. In 2025, you’ll pay 25% of the cost for brand-name drugs in the gap, but you still get manufacturer discounts. That’s not something most people realize until they’re already in it.

Not all plans are created equal. A plan with a low monthly premium might have high out-of-pocket costs for your specific meds. If you take a specialty drug like insulin or a biologic for rheumatoid arthritis, you could end up paying way more than expected. That’s why checking your plan’s formulary matters more than the headline price. You need to see if your drugs are covered, at what tier, and what the copay is. And if you’re on Medicaid or get Extra Help from Social Security, you might not pay anything at all—but you still have to enroll to avoid penalties later.

Missing the initial enrollment period can cost you. If you don’t sign up when you’re first eligible and you don’t have other creditable drug coverage, you’ll pay a late enrollment penalty forever. It’s 1% of the national base premium for every month you delay. That adds up. And if you switch plans mid-year without a qualifying event, you could lose coverage or get stuck with a plan that doesn’t cover your meds.

What you’ll find below are real, practical breakdowns of how Medicare Part D works—what the premiums really look like, how income affects your bill, which plans save you money on specific drugs, and how to avoid costly mistakes. No fluff. No sales pitches. Just what you need to know before you pick a plan—or if you’re already enrolled, what to check before next year’s open enrollment.