Your prescription drug costs can vary wildly depending on your plan, your pharmacy, and your specific medications. The difference between a cheap plan and an expensive plan can amount to thousands of dollars a year. Here’s how to take control of them.
The Short Version
Choose a Medicare Part D plan that covers the drugs you actually take — not the one with the lowest premium. Look for plans where your specific medications are on the formulary (the plan’s list of covered drugs) at a tier you can afford. Once you enroll, ask your pharmacy if switching to a generic medication can lower your costs. Also ask if you can get a 90-day supply instead of a 30-day supply; it often costs less per dose.
How Part D Cost-Sharing Works
Part D plans divide your drug costs into up to four phases each year:
Deductible — You pay the full cost of covered drugs until you hit your plan’s annual deductible. Many plans set this at $0 to $590 (the 2025 maximum). Generic-only plans often have a $0 deductible.
Initial Coverage — After your deductible, you pay a copay or coinsurance (your share of each drug’s cost) while the plan covers the rest. Tier-1 generics are often as low as $0–$10. Brand-name drugs at higher tiers cost more — sometimes 25% or more of the drug’s full price.
Coverage Gap — In 2025, once your total out-of-pocket drug costs reach $2,000, you automatically move into catastrophic coverage for the rest of the year. This is a significant change from prior years — there is now effectively no “donut hole” in the traditional sense starting in 2025.
Catastrophic Coverage — After the $2,000 out-of-pocket cap, Medicare and your plan cover virtually all costs for covered drugs for the rest of the year. You pay nothing or a very small amount.
The key number to track is your annual out-of-pocket spending on covered drugs. Once it hits $2,000, your cost share drops to near zero for the remainder of the calendar year.
Three Smart Cost-Saving Moves
Ask about generics. Most brand-name drugs have FDA-approved generic versions that are chemically identical and dramatically cheaper. If your doctor prescribes a brand-name drug, ask whether a generic is available and clinically appropriate for you.
Shop by your actual medications, not by premium. A plan with a $12/month premium can be far more expensive overall if your drugs are on an unfavorable tier. Use Medicare’s Plan Finder at Medicare.gov and enter your exact medications — it will show your estimated total annual costs across all plans in your area, not just the premium.
Ask about 90-day supplies. Many pharmacies and mail-order programs offer lower per-dose pricing when you fill a 90-day supply instead of 30 days. If you’re on a long-term medication, this alone can cut your annual cost noticeably.
When to Reassess
Your medications, their coverage tier, and the available plans all change every year. Review your Part D plan every fall during the Annual Enrollment Period (October 15 – December 7). If your prescriptions have changed, or if a generic version of a brand-name drug you take became available, switching plans may save you hundreds of dollars.
Also check whether you qualify for Extra Help (also called the Low Income Subsidy). This federal program can significantly reduce premiums, deductibles, and copays for people with limited income and resources. Apply through Social Security at ssa.gov.
These are general guidelines. Specific costs depend on your plan, pharmacy, and medications. For accurate cost information, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). This site is affiliate-supported and free to use.