Understanding Medicare Part D Costs

Medicare Part D prescription drug coverage is sold by Medicare-approved private companies. Each company sets the pricing for the plans it offers. 

There are multiple components that contribute to the cost of your prescription drug coverage.

How Much Does Medicare Part D Cost?

Medicare Part D costs include:

• Medicare Part A and Part B Premiums
  You must have Medicare Part A and Part B to enroll in Medicare Part D. 

You will not have to pay a premium for Medicare Part A if you or your spouse have worked and had payroll taxes deducted for ten years (40 quarters) or more. That is called premium-free Part A.

You will pay a monthly premium for Medicare Part B. The amount varies depending on your income. 

• Medicare Part D Monthly Premium
  Medicare Part D plans charge a monthly premium. 

• Medicare Part D Income-Related Monthly Adjustment Amount (IRMAA)
  You might have to pay more for Medicare Part D if your income is above a certain dollar amount. The additional amount can change from year to year. 

This is not part of your plan’s premium. The payment will go directly to Medicare. The amount will be deducted from your Social Security benefits or you will receive a bill. To keep your prescription drug coverage, you will need to pay the extra amount. 

The Social Security Administration will contact you if you have to pay Part D-IRMAA.

• Medicare Part D Yearly Deductible
  A deductible is the amount you pay out of pocket before your insurance begins to pay its share of the costs. Each plan can set its own deductible amount, and some plans have a $0 deductible.

• Medicare Part D Copayments
  Copayment means that you pay a fixed amount each time you fill a prescription. This amount is set by each plan. 

• Medicare Part D Coinsurance
  Coinsurance means that you pay a percentage of the total cost of a drug each time you fill a prescription. The amount you pay will change if the price of your medication changes. 

• Medicare Part D Coverage Gap 
  The coverage gap, sometimes called the donut hole, refers to a change in your prescription drug coverage when the amount you have spent on prescription drugs reaches a high-dollar range set by Medicare. 

You will probably never reach the coverage gap if you do not have a lot of prescriptions or expensive prescriptions.

Your Part D plan’s Summary of Benefits includes information on the specific spending range for the coverage gap and your benefits while you are in the coverage gap. 

If you spend above the upper limit of the coverage gap, you qualify for catastrophic coverage. If you have catastrophic coverage, almost all of your drug costs will be covered.

• Medicare Part D Drug Costs
  Medicare Part D plans publish a list of all of the drugs they cover called a formulary. This list is updated every year to make sure it includes the most effective drugs available. Your medications need to be on the formulary to be covered by your insurance. 

If your medication is not on the formulary, your provider may be able to help you find a similar drug that will work just as well. Your provider can also apply for an exception if he or she believes a specific drug is important to your health.  

Every drug on the formulary is in a tier that reflects the price range for the prescription. In general, the higher the tier number, the higher your cost for the drug. 

Medicare Part D plans provide information about the costs of drugs in each tier in their Summary of Benefits available online. 

• Medicare Part D Pharmacy Options
  Medicare Advantage plans and Medicare Part D plans will have a list of pharmacies that are in their network. Be sure to fill your prescriptions at an in-network pharmacy (including mail-order pharmacies) so your drugs are covered.

Medicare Part D Late Enrollment Penalty

You may have to pay a late enrollment penalty if you don’t sign up for Part D when you are first eligible, or if you have a gap in creditable drug coverage through another health insurance plan. The penalty will be added to your monthly premiums and you will have to pay it for as long as you have Part D. The longer you go without enrolling, the more the penalty will be.

How do I Make Payments for Medicare Part D?

If you are notified that you have a Part D-IRMAA, you are required to make payments directly to Medicare, not your Medicare Part D plan. You will get a bill each month from Medicare. To keep your prescription drug coverage, you will need to pay the extra amount.

There are several ways you can pay Part D-IRMAA

• Pay online through your Medicare account
• Sign up for Medicare Easy Pay to have payments automatically deducted from your bank account
• Process a payment from your bank’s online bill payment system
• Mail a payment to Medicare

You can elect to have your Part D premium deducted from your retirement benefits each month. Or, you can get billed directly by your plan.

There are several ways you can pay your Medicare Part D premium:

• Elect to have your Part D premium deducted from your retirement benefits each month
• Pay online through your plan’s online payment portal
• Have your payments automatically deducted from your checking or savings account
• Process a payment from your bank’s online bill payment system
• Mail a payment
• Pay with your Health Savings Account funds

How Can I Get Help Paying for My Prescriptions?

Prescription Savings Programs and other assistance programs can help you pay for prescription costs if you have limited income and resources.

Have Questions? Learn More from Banner Health.

Learn about Banner Health’s Medicare Part D plan.

Contact Banner Medicare so we can answer any questions you may have and even help you enroll.

Call (888) 788-1931 (TTY 711) to speak with a licensed sales agent.

• October 1, 2022 – March 31, 2023: 8 a.m. to 8 p.m., 7 days a week
• April 1, 2023 – September 30, 2023: 8 a.m. to 8 p.m., Monday – Friday

Use our online form to have a licensed sales agent contact you.