Medicare Part D: Prescription Drug Coverage, Costs, and Avoiding Late Penalties

April 23rd, 2025
Overview of Medicare Part D and its significance in covering prescription medications.​

What Medicare Part D Covers

• Prescription drugs, including many generic and brand-name medications.
• Each plan has its own formulary (list of covered drugs).​
  

Costs Associated with Part D

• Monthly Premiums: Varies by plan.
• Annual Deductible: Varies by plan, but up to $590 in 2025.
• Copayments/Coinsurance: Varies depending on the drug tier.
• Out-of-Pocket Maximum: Starting in 2025, capped at $2,000 annually.

Importance of the Formulary

• Ensuring your medications are covered to avoid higher out-of-pocket costs.
• Understanding tiers and potential prior authorization requirements.​

Late Enrollment Penalties

• If you go 63 days or more without creditable prescription drug coverage, you may pay a penalty.
• The penalty is calculated by multiplying 1% of the national base beneficiary premium by the number of full, uncovered months you were eligible but didn't enroll in Part D, (Rounded to the nearest $0.10 and it's added to your monthly Part D premium. That penalty stays with you for the rest of your Medicare life.​

Conclusion

• Whether or not you take prescriptions, it's recommended to get Part D so you do not incur any late penalties in the future should you need prescriptions.

Kim & Co. Agency and their Medicare agents will provide a zero cost consultation to make sure your prescriptions are covered at the lowest possible cost to you.