What is the Medicare Part D deductible for 2024?

A deductible is an amount of money you have to pay before your health insurance starts to pay for services. Once you have met your deductible, you only pay coinsurance and/or copays out of pocket.

Does Medicare Part D have a deductible?

Some Medicare Part D prescription drug plans come with an annual deductible. However, there are some plans that have a $0 deductible. 

 Part D plans vary by zip code. Normally, most zip codes have a plan option with a $0 deductible. Most well-known insurance companies will offer a few. However, plans with lower deductibles often have higher monthly premiums. 

Do Medicare Advantage plans with prescription coverage have a deductible?

Yes, Medicare Advantage plans (Part C) do have annual deductibles for prescription coverage. However, the deductible is not the same as for standalone Part D plans.

What is the Medicare Part D deductible for 2024?

Every year, the Centers for Medicare and Medicaid Services (CMS) announces the standard Medicare Part D deductible for the following year. This standard is the maximum deductible a Part D plan can have. For 2024, the maximum deductible for Medicare Part D is $545. 

How do I know what my Part D deductible is?

When you enroll in a Part D plan, you’ll receive a summary of benefits. This is where you can find your deductible amount. You’ll also receive a monthly explanation of benefits (EOB) when you file a claim or pick up a prescription. Your EOB will include how much of your annual deductible has been met thus far.

How does a deductible work with Medicare Part D?

There are four different Medicare Part D coverage phases. Reaching the plan’s deductible is the first phase.

1. Deductible phase

In this phase, you’ll pay cost-sharing based on the retail price for your prescriptions until your annual deductible for the calendar year has been met. The calendar year resets on Jan. 1.

2. Initial coverage phase

During the initial coverage phase, your plan will help pay for the costs of your covered prescription drugs, and you will pay a copay or coinsurance. These amounts will vary by plan and drug.

3. Coverage gap (or donut hole)

This phase has also been referred to as the donut hole. Once the total drug costs you and your plan have paid for your prescription drugs reach the initial coverage limit of $5,030, you will be responsible for 25% of the retail cost of your prescriptions.

4. Catastrophic coverage

Once you have paid $8,000 out of pocket, you’ll move out of the coverage gap and into the catastrophic coverage phase. This amount, which is called the TrOOP, changes annually. At this point, you will no longer be responsible for any cost-sharing for covered drugs. 

When will I meet my Part D deductible?

It depends on your prescription drug costs, how often you are filling them, and your specific plan’s deductible amount. Some people reach their annual deductible in a couple of months or sooner, while others might not meet their deductible by the end of the year. Here are a couple of examples of how you can predict when you’ll meet your Part D deductible.

 If your Part D deductible is $545:

Prescription drug #1 costs $100 per month

+ Prescription drug #2 costs $9 per month

= A total of $109 spent on drugs per month

$545 deductible / $109 monthly drug spending = 5 months, which means you’d meet your deductible in May.

  If your Part D deductible is $300:

Prescription drug #1 costs $35 per month

+ Prescription drug #2 costs $15 per month

= A total of $50 spent on drugs per month

$300 deductible / $50 monthly drug spending = 6 months, which means you’d meet your deductible in June

Note: These examples reflect the scenario of taking two prescription drugs regularly. If you do not take prescription drugs every month, it could take you longer to reach your deductible.

How to save during the deductible phase

There are many ways that you can cut costs while you get through the deductible phase. Here are some financial tips on how to save money on prescriptions from Ramzi Yacoub, Pharm.D., SingleCare’s Chief Pharmacy Officer.

1. Switch drug tiers

All Medicare Part D plans come with a formulary. This formulary is a list of your covered drugs. It does not impact your plan’s deductible. All Medicare plans separate the prescriptions into tiers. It’s possible to switch to another tier to get better savings. Tier 1 is typically the least expensive, and Tier 5 is the most expensive. Tier 6 does not apply to most Part D plans and is only applicable to maintenance medications for chronic health conditions.

 The six Medicare Part D drug tiers:

• Tier 1: Preferred generics—Common generic drugs and usually the lowest cost.
• Tier 2: Non-preferred generics—Less common generic drugs that are relatively inexpensive.
• Tier 3: Preferred brands—Commonly used brands that work for most people.
• Tier 4: Non-preferred brands—Less common brand drugs. 
• Tier 5: Specialty tier—These are the most uncommon and expensive, typically, you will pay the most for these prescriptions.
• Tier 6: Select care drugs—Only on about 5% of plans. Select care drugs are medications prescribed for long-term health conditions such as diabetes, high cholesterol, and high blood pressure.

If your healthcare provider has prescribed a high-tier drug, ask about the possibility of switching to a low-tier alternative to save money.

2. Ask the pharmacy about pricing

Sometimes, the out-of-pocket price for uninsured patients is lower than your Medicare copay or coinsurance. The pharmacist doesn’t always volunteer this information, so it’s important to ask. 

3. Extra Help program for Medicare prescription drugs

This is a program administered by the federal government that helps people who have low incomes and resources to pay for prescription drugs. You may be eligible for the Extra Help program if you have limited income. If you are dually eligible for both Medicare and Medicaid, you are eligible for the Extra Help program and automatically enrolled. Extra Help reduces or eliminates many Medicare Part D costs, including premiums, deductibles, copays, and coinsurance. It also eliminates the Part D late enrollment penalty and provides other benefits.

Note: If you have a Medigap policy (Medicare supplement insurance), it will not help reduce Part D prescription drug coverage costs. Medigap policies only help pay for some Original Medicare costs for Medicare Part A and Medicare Part B.

4. SingleCare coupons

A SingleCare discount card can help you save up to 80% on prescriptions. However, you cannot use both Medicare Part D and SingleCare at the same time for a double discount. You must choose one or the other. Note: If you use SingleCare, your out-of-pocket cost for your prescription will not count toward your Medicare deductible. SingleCare may be most advantageous for Medicare beneficiaries on prescription drugs not covered by Medicare or when your Medicare copay is significantly more expensive than your out-of-pocket cost with a SingleCare coupon.

RELATED: Does SingleCare work with Medicare?

5. Go generic

When possible, work with your doctor to identify generic drug options. They are just as good as brand medications and at a fraction of the cost. You can also compare prices of generic vs. brand-name drugs by searching for your prescription on singlecare.com.

6. Get an assist from your pharmacist

Swing by the pharmacy and ask your friendly pharmacist to look over your medication list. He or she will often be able to point out a few money-saving tips that you can then discuss with your doctor. 

7. Switch to 90-day refills

Fill prescriptions for 90 days whenever possible. Not only can it cost less than filling 30 days at a time, but studies also show that filling three months at a time increases adherence to medications, which can decrease hospital admissions. 

8. Stay true to your plan’s formulary

Bring your formulary (look on your insurer’s website or app) to doctor’s appointments. You can often save a significant amount of money when your doctor chooses a medication on your plan’s formulary that has a lower copay.