How do Medicare Part D plans work?

Most Part D plans are using preferred pharmacy networks and formulary cost-sharing tiers, where out of pocket expenses are lower as long as you use those preferred pharmacies, and higher, if you purchase your medication outside of the preferred network.

Premiums for Part D plans in 2023

All stand-alone Part D plans have a monthly premium, which varies by the plan, and is in addition to your Part B premium. If you enroll in a Medicare Advantage Plan that includes prescription drug coverage, your monthly premium for the plan typically already includes prescription drug coverage. Deductibles are also very common for Part D plans. estimates the average premium for a basic Medicare Part D prescription drug plan in 2023 as $33 per month.

Your actual drug plan costs will depend on:
– The plan you choose
– Your prescriptions
– Whether or not your prescription is included in your plan’s formulary (drug list)
– Whether or not you purchase your medication at a network pharmacy

How does the donut hole work in 2023?

Before we answer this question, let’s first explain: What exactly is the Medicare Part D donut hole?

The donut hole describes the situation where seniors, solely relying on a Medicare Part D drug prescription plan without additional private prescription drug insurance, have to spend an arm and a leg for their medication once they reach a threshold. They will have to pay out-of-pocket for their prescription drug costs, once the total cost of their annual prescription drugs reaches the annual initial coverage limit that is set by Medicare ($4,660 for 2023).

Here is how it works: Let’s assume you have a Medicare Part D prescription drug plan, but no other insurance that would cover costs for medication, and you need a lot of expensive prescription medication. Every month, you pay your premium. When you get prescription drugs that are covered by your plan, you have to pay your share. Which is the deductible of up to $505 (according to your plan it may be less), and after that, until the total of your prescription drugs reaches $4.660, you must pay co-payment/co-insurance.

From $4.660 to $7.400 of your prescribed medication costs, you are responsible for 25% of the amount, while your plan and the manufacturer cover the remainder of 75%. This gap in coverage is also known as the ‘donut hole’.

Once the total cost of your prescription drugs exceeds the annual threshold of $7,400 for 2023, you are ‘out of the donut hole’ again, because now the ‘Catastrophic Coverage’ applies to you. From this point on, you only pay co-insurance or co-payment again for the rest of the year.

Medicare Part D Plan Comparison

While choosing the right Medicare Part D plan can save you money, the process of comparing plans can be a bit confusing and time-consuming. That’s why we offer a FREE Medicare Part D plan comparison report.

Find the RIGHT plan for you.

The comprehensive Medicare Part D plan comparison tool provides the information you need to make an informed choice when it comes to prescription drug coverage. Our representatives simply input your particular prescriptions and generate a personalized plan comparison report which will show you:

  • The best Part D insurance carrier match for you specific medications
  • Your projected out-of-pocket expenses including premiums, deductibles and copays for the entire year.
  • When you can expect to enter the “donut hole”.
  • What plans will cover your medications, and which won’t.
  • What drugs require prior authorization from your physician or have other restrictions, such as quantity limits.

Ask your MWA representative for your FREE personalized report.

Not a MWA customer? No problem! Just email your medication list to, or enter your medication list below, and we will send you a no obligation Part D comparison report.