If you have stopped working by age 65, or you are working for a firm that has fewer than 20 employees, you need to sign up for Medicare coverage right around your 65th birthday. There are two mandatory pieces you will sign up for. Part A covers hospitalization, and Part B covers just about everything else, with one big honking exception: prescription drugs.

Medicare Part D: prescription drugs

Medicare offers everyone the chance to have insurance to cover most (but not all) costs for many prescription drugs. But it’s not mandatory coverage, and you typically have to pay a monthly premium.

How Part D works:

If you have decided to enroll in Original Medicare for your Part A and Part B coverage, the premium cost to add a Part D prescription drug plan averages about $38 a month in 2021, according to the Kaiser Family Foundation.

If you didn’t go with Original Medicare and opted for Medicare Advantage (MA), you likely have a drug plan embedded in your MA plan. Many MA plans don’t charge any extra premium for the coverage, and for those that do, the cost averages around $12 a month. (A side note: That doesn’t necessarily make an MA plan a better deal for drug coverage. It depends on what your deductible, copays and coinsurance will be when you actually use the insurance.)

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