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What Does Medicare Part D Really Cost?

Look beyond premium to learn your real Medicare Part D costShopping Cart With Part D Medicines

It’s relatively easy to learn what the premiums are for available Part D plans but learning the real Medicare Part D cost involves understanding a lot of moving parts.

Each year many Medicare beneficiaries make the mistake of choosing a Medicare drug plan based on premium alone.

This is often due to several misconceptions about the Medicare Part D program.

The biggest misconceptions are that there is a universal Medicare formulary and that individual drugs are placed in the same tier by all plan providers.

These two misconceptions often lead people to choose a plan that does not cover all their medications and many times pay more than they need to.

The moving parts of Medicare Part D costs

The Part D premium is certainly a major determinant of annual cost but not the only factor that can contribute to overall costs. The average monthly premium for Part D is approximately $34.00 per month.

The lowest premium nationwide for 2017 is the Humana Walmart RX plan at $17.00 per month. Some Part D plans have monthly premiums well over $100.

Here are some factors to consider when calculating Part D costs:

  • Does the plan include an annual deductible? Not all plans do and the 2017 Part D deductible can be as high as $400.
  • Does the plan require cost sharing with a copay or coinsurance? Costs for coinsurance can be difficult to calculate.
  • What tier are individual drugs listed in? Some plans may list a drug in a higher tier which will generally cost you more money.
  • How much are the copays for each drug? A couple dollars difference between plans times many drugs and 12 months can really add up.
  • Will you receive a substantial benefit by using the mail order option? Some plans include a $0 copay for tier one drugs.

The above factors are the variables between Part D plans and in addition to the premium will greatly influence the overall cost.

Features common to all Part D plans

Some feature of Medicare drug plans are the same. Part D is regulated by CMS. The following aspects of the Part D program are the same for all plans:

  • The initial Part D deductible
  • Initial coverage limit
  • Out-of-pocket threshold amount
  • Donut hole or coverage gap
  • When you reach the catastrophic coverage portion

Part D Changes For 2013


When comparing Part D plans be sure to have a list of your medications available so you can compare it against a plan’s formulary to first determine if all your drugs are covered. This is also the time to note which tier your individual drugs are listed in.

Many plan websites allow you to enter your drugs so your annual costs can be calculated. If you use this type of feature be sure to look at more than one company.

If you have chronic health condition or require newer or some of the less prescribed medications you will likely need to look at a plan with an expanded formulary.

As you look at all factors involved you should have no problem learning what costs you will have and be able to find the best part D plan for your situation. .


  1. I am looking for the 2012 “complete” formulary. Currently enrolled in AARP’s Medicare Rx PDP. Where do I find it?

  2. Sue, The centers for Medicare and Medicaid do not allow Part D plan information to be made public until October 1st. Any public information is viewed as marketing by the plan, which is prohibited prior to October 1st. After October 1st you can visit the plan website – http://www.aarpmedicareplans.com to access the complete AARP formulary for your plan.

    It’s not easy to find as the company would rather you use their Look Up Tool. You can scroll to the bottom of the page to Site Map to locate it that way within a couple of clicks.

  3. I am presently enrolled in a Medicare d plan but the cost of my drugs are making it impossible to afford the drugs I need…when can I opt out of my plan to look at other options?

  4. Garry, You can submit an application for a new plan during the Annual Election period – Oct 15th through December 7th. Your new plan will not become effective until January 1st. If you are entitled to a Special Enrollment Period, you may be able to switch sooner. Speak with an agent to learn more.

  5. Why is it so difficult just to find out which plan is the cheapest? I rarely use prescriptions of any kind and I hate even going through the process of getting one when I do need one, considering all the man hours at the doctors office, the drug store and the insurance company while arguing about them. this past year I had one prescription and was charged $47.95 for something that should have cost $14.73. I’ve had it before through another ins. co. Actually, I’ve had the prescription filled 2 times under that co. and paid the same for both the original prescription and the placebo. This past year, because I knew the difference between “cream” and “ointment” and chose the one that works, I was charged the higher price as though I was a novice and didn’t know the difference. If you have a legitimate condition for which you need the product, YOU KNOW when it doesn’t work.

    Obviously there are issues besides the “formularies” which really don’t apply to people who manage most of the time without the fraudulent manipulation.

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