Medicare Part D helps pay the costs of prescription drugs. However, there are some out-of-pocket expenses in Part D that you may have to pay. Here we review some of these costs.

Part D Cost Sharing

Most people enrolled in a Part D plan (and not eligible for LIS/Extra Help assistance) have out-of-pocket expenses. Expenses may include:

• A monthly Part D plan premium (average premium in 2021 is $30.50)
• An annual deductible (maximum $445 in 2021)
• A cost-sharing portion of plan-covered drugs (either a copayment or coinsurance) during the Initial Coverage Period
• A percent of the cost of drugs once you pass the Initial Coverage Period (and enter what used to be called the coverage gap/donut hole) and
• If you reach the Catastrophic Benefit Period in the Part D drug benefit, minimal drug copayments or coinsurance costs.

To better understand how the Part D benefit works and how much you may have to spend, check out the 2021 Part D Standard Plan Cost-Sharing Chart.

Note: Some people with higher incomes will pay more for their Part D premiums. This is called IRMAA, or Income-Related Monthly Adjustment Amount. Learn more about IRMAA.

Former Coverage Gap ("Donut Hole") Payments 

If you exceed the spending threshold in the Initial Coverage Period, you will enter what used to be called the Part D coverage gap/"donut hole." While this gap officially “closed” in 2020, you are still responsible for paying 25% of the costs of your generic and brand name drugs in this phase.